This video explores using metrics to discover, develop, learn, motivate...and even fail.
- I was once helping a purchasing group in a company, and they had a problem where the people in the company really disliked them. They did everything they could to avoid using the purchasing department for making purchases. For example, the marketing group might need new computers. The marketing group would call the suppliers, choose the products they wanted, and then, negotiate the deal. Only then would the marketing department call up purchasing and say, "Draw up the contract and get me my computers." Why was this happening? Well, one of my first questions to the leader of purchasing was, "Tell me the primary metrics "they use to evaluate your department." They said, "Safety, compliance, and cost." Safety, well, why safety? They were a company that dealt with a dangerous product.
So safety was a metric for everyone in every department in the organization, but how much safety is involved in buying office computers? How about compliance? They needed to get good payment terms in the contract. That's reasonable. And finally, we had cost. That, too, made sense, but what's missing? Well, purchasing is buying things for the company. In this case, computers for the employees, computers that will help people accomplish their work, but nowhere in the metrics is purchasing moved to consider what the stakeholders really value.
Safety is sort of a non-issue here. Compliance may help the company's cash position, but that doesn't help the workers on a day-to-day basis. And then, we have cost. The company demands lower cost. Effectively, purchasing is always looking for the cheapest solution. No wonder marketing is trying to avoid purchasing. They're going to buy them cheap stuff, and here's what's worse. When marketing calls a supplier and sets up the deal, purchasing will almost surely call the supplier back and try to change the terms of the deal.
The supplier sees this as a backhanded renegotiation after an agreement. No wonder everyone hates purchasing. Did you see what just happened? We found a problem between two or more parties. We asked about the metrics that motivated each party, and in a rather quick and logical fashion, we were able to discover where the real problem rested. Every time I see a big corporate scandal on TV, every time I hear about employees trying to cheat the system, and even when I'm at work and I hear about a really new but odd initiative, my first move is to ask, "Who are the stakeholders? "How are they measured? "What are the incentives used to motivate people?" In most cases, you'll be led right to the real problem.
Most people are good. Most people want to be successful. They want to make others happy, but people are also addicted to numbers. So when I see lots of people doing bad things, when I see dumb mistakes being made over and over again, my first reaction is to look at the metrics. Next time you come across a problem, next time you see people behaving oddly, list out the stakeholders.
Create a list of each of the parties' desires, and then, look at the metrics that define success for each group. Odds are you'll discover a problem others weren't finding. Observations may help you see the symptoms, but metrics, they can guide you to the root cause.
- Metrics and human behavior
- Common corporate errors in measuring
- Developing a good metric
- Using the performance measurement tune-up
- Avoiding redundancy
- Using dashboards, infographics, and other data visualization tools