Measuring Organizational Change

As I manage various organizational change projects, I never cease to be amazed by one fundamental truth that – while unspoken – is the single greatest burden that every successful change project must overcome: management acceptance. No more is this true than in projects implementing performance measurement programs.

The reason that this truth often goes unstated is worthy of special recognition. In many – if not most – cases, the management team that ultimately has the greatest difficulty in coming to terms with the nature of the change is frequently the same management team sponsoring the effort in the first place. Paradoxical? Perhaps, but there are some clear drivers of why this is so.

Let's start with the nature of performance measurement implementations. The underlying rationale is to clearly understand, manage and improve the fundamental performance of the organization. The driver of performance measurement is to quantifiably make visible the key performance drivers of the organization, and create a clear sense of manageability. Candidate measures include productivity, quality, cycle time – the list is as long and as varied as there are candidate organizations.

As I have pointed out in other columns, measurement is personal. One of the key benefits – and one of the fundamental drivers that should in all instances be present – is a clear identification of individual contribution. What impact have I had on the organization? How much revenue have I generated? How many defects have I eliminated? How much has my productivity improved?

Let's deal with the first one: How much money did I make for the company today? Imagine, for example, that you are a service technician, and that for each call you make the company receives $100 in revenue. Make ten calls in a day, and you have contributed $1,000 to the bottom line of your organization. A department of 10 technicians, each performing at the same level, contributes $10,000 to the bottom line each and every day. An easy measure to determine.

So how about the manager of that department? How much revenue did they generate for the company that day? You can't keep claiming the same contribution to the bottom line at each progressive stage up the org chart. The benefits occur once, and once only. This begins to illustrate some of the problems managers have in accepting performance measurement as a concept; those that sponsor it fear that the measures will reflect poorly on them, even if they themselves perceive that they provide a valuable – or essential – function. As such, resistance at a fundamental, personal level is virtually guaranteed.

Part of the problem we are encountering is one of a clear understanding of role. Managers, by their nature, rarely produce direct revenue for the organization. The further you travel up the organizational hierarchy, the more abstract this problem becomes. The logic is simple: the front line is where the rubber meets the road, and where true revenue is generated; the further you are from the front line, the more removed your direct impact on revenue generation.

The key word here is direct. What is being missed in the discussion is that the manager's role is most often an indirect one. The role should be one of leadership: managing costs, improving performance and minimizing defects; all of which are impacts that are felt over the long term. Given these aspects of the role, however, there is a clearly defined opportunity to make a significant impact to the organization, and a measurable one at that. Unfortunately, many managers choose to ignore the value of indirect benefits, or believe that the organization does not perceive them to be sufficiently tangible.

In many cases, managers also find themselves in positions where they are constantly supervising, managing expectations, fighting fires, and dealing with issues and problems. Those who see this as their role are the ones that display the greatest resistance to the concept of introducing performance measures, and with obvious reasons. There is no direct value being created – the process is barely being managed, let alone improved. A focus on improving the process and driving accountability to those directly responsible for execution would eliminate a great deal of churn. The challenge comes when a manager enjoys the fire fighter mentality, and has no desire to improve the process as it diminishes their personal sense of value and worth.

At the end of the day, the argument answers itself. For organizations that seek to improve, performance measurement provides the framework to put the levers of control in the hands of those that truly need them, and of necessity highlights and encourages the elimination of waste, inefficiency and ineffectiveness. At all levels of the organization.
You just have to want it badly enough.