Business consultants usually emphasize measurement. If we want organizational improvement, we have to know where we started. But often, the yardstick creates more problems than it solves.
A classic quote on this topic comes from H. James Harrington, author and professor specializing in business process improvement. He wrote:
Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.
This seems like sound advice. But there’s a key problem with tracking progress in any organization: when people know they are being measured, they sometimes work to influence the results.
Sometimes, this is what you want. If you keep tabs on company sales and reward people for performance, you might get more sales. On the other hand, your employees might stretch the truth in order to close deals.
Furthermore, we may be measuring the wrong thing. The Hollywood talent whose films have made more than anyone else is someone you’ve never heard of. Likewise, a business can easily measure prospects reached instead of sales made, or total capacity instead of actual production.
Of course, we’ve covered some of the dangers of business process measurement before. So how do you avoid measuring something that doesn’t matter, or inadvertently encouraging people to game the system?
Start by sharing your goals. Are you trying to increase revenue? Reduce turnover? Have happier employees? Whatever you want to accomplish, include other stakeholders as you come to a decision. That way, they will see the “why” behind your objectives.
Measure what matters, not what’s easily measured. It’s easy to look at the total number of emails you send per day, or the total sales volume. What’s harder to measure is customer satisfaction or brand awareness. But these may be more important, and if so, you need to find a way to measure them.
Decouple measurement from individual rewards. It can be helpful for everyone in the organization to know they benefit when goals are met. However, many business consultants know that direct incentives can often backfire. Let people know that measurement is about insight, not about trying to get people to do more with less.