Keeping the organization focused on the right targets and moving in the right direction is no easy job. Over the years, many organizations have invested heavily in Business Intelligence, Analytic, CRM and ERP technological systems to drive performance improvements.
Although there is no harm in investing in these techinical components, no scorecard or dashboard is going to overcome the performance measurement challenge without looking at the social and organizational side of the equation.
Organizations that want to transform their performance measurement must establish a strong social component or context that is capable of fully supporting the technical measurement system components. Establishing a positive context for measurement is crucial for encouraging or discouraging interactivity around measurement.
Transformational measurement requires individuals within the organization to view measurement differently. Lagging organizations still view measurement as a routine numbers game whereas high-performing organizations clearly understand the social parts of performance measurement which are the social interactions.
Performance measurement will never be transformational unless there is clear communication across people and functions in the organization. Through communication, individuals and functions are best positioned to gain informed enterprise performance insights which eventually result in them learning throughout the measurement process.
One way of making performance measurement socially interactive is creating a culture that promotes and supports highly interactive and ongoing discussions or dialogues about performance measurement and improvement. For these discussions to achieve the hoped-for results, a positive foundation for measurement; focus and integration must be present. These elements are key to breaking down any silos that might be stopping the organization from experiencing performance measurement’s positive transformational power.
Where there is no integration and individuals are allowed to operate in silos, the challenge becomes one of dealing with “blinkered perception”. This is mainly so because the individuals bring only their own functional perspective on an issue. It is therefore imperative that interaction, both within functions and across functions is enhanced.
This integrated approach will allow people with different perspectives to come on board and present their multiple views which will eventually lead to obtaining a bigger picture of any subject. As a result, decision-making is greatly improved. It is therefore important to note that the way people talk to each other absolutely determines how well the organization will function.
Leaders need to understand the transformational potential of creating synergy within the organization. Without a systematic, integrated approach, great advantages for synergy are missed. Interaction across the organization between functions and people is crucial for turning operational and strategic plans into a changed reality and dialogue thrives on openness, candour and inviting multiple viewpoints.
When measurement is not dealt with interactively, it becomes difficult to efficiently and effectively convert data into useful information which needs to be transformed into knowledge which ultimately is the basis for real wisdom. Furthermore, when there is rarely any meaningful discussion or education on performance measures, very few employees will understand the meaning of most performance measures being used by the organization. The key to interactivity around measurement is performance conversations that start with an invitation to dialogue. For example, the dialogue could be somewhere along these lines:
• “Let’s look at our measures and evaluate how we are performing?”
• What insights are we getting from our data collection about customer needs and wants, customer satisfaction, profitability, quality etc?”
• Let’s discuss why we are starting to experience some improvements in this area, but not there.”
Creating social interactions through dialogues like the ones above is crucial for identifying and selecting the right measures, for making the right cross-functional decisions on an ongoing basis, and most importantly, for the alignment of strategy, operations, performance, leaders and functions across the organization.
Closing Thoughts: Real solutions to organizational problems are predominantly social, not technical. The technical aspects of measurement will only take performance measurement to a minimal level of effectiveness. True transformational performance measurement requires extensive social interactivity. Upgrading the technical performance measurement capabilities will also help, but don’t do it without upgrading the social capabilities.