Are you are making progress?

“I’m like a little boat adrift in the ocean - I don’t know whether I’m 200 yards from land or 200 miles.”

When we are working under difficult conditions, it’s easy to lose sight of the basics.   The old saying “when you are up to your neck in alligators, don’t forget you came to drain the swap” is never more true when something is hard going.  We set out bright eyed and bushy tailed only to find everything a lot more difficult than we realised.  As time marches on our enthusiasm dwindles, and we start to wonder whether we will ever be successful.

I was talking to someone a few weeks ago about his business and he said he felt like a little boat adrift in the ocean.  He had no idea whether he was 200 yards from land, or 200 miles.  It’s not a nice feeling, and it’s all too easy to give up when you feel like that.  He was taking a step back to figure out what to do with this feeling.

What’s needed is to work out what’s important in your business, and to measure it.  In his business it was getting face to face meetings with people who have a need for his service.  As it turns out meetings with prospects is a lag indicator, rather than a lead indicator.  That is to say that the number of meetings with prospects is a result of work already done.  That work might be meeting new people at networking events, or having people request a white paper from your web site, or making a certain number of cold calls each week.  You know what the activities are that you need to do to create the circumstances where meetings with prospects start to get into your diary.  So the lead indicators are number of new people in your contacts database, the number of marketing communications sent out, etc.  The lag indicator is the number of meetings with prospects.  To say it another way, you reap what you sow. 

Coming back to this feeling of being a boat adrift in the ocean, it’s important to measure this activity.  Unless you know on average how many people you need to contact to generate a meeting you will never know where you are in the ocean.  If you don’t know where you are, your motivation takes a hit.  Without motivation you don’t do those upfront activities that are actually the life blood of your business.  So measurement isn’t a nice to have, it’s actually the map that guides our little boats through calm or chopping waters. 

I wrote about lead and lag indicators a while ago, if you want to have another look.

What Gets Measured Gets Done

There’s nothing like a blog post on measurement to get comments flying.  It is as though in business “To Measure” or “Not To Measure” is an either/or.  Of course it isn’t!  Both qualitative and quantitative aspects of management and leadership can and must live happily side by side. 

It was Tom Peters, the indefatigable business guru who inspired this blog, who reminded me of the importance of measuring the important stuff in business.  I recently came across one of his essays from 1986 entitled “What Gets Measured Gets Done”.  In his tireless campaign to improve customer service, improve efficiency and generally shake up business people everywhere he advocates measuring our promises to improve.  Then holding ourselves accountable – weekly – with our peers. 

He suggests starting out by quantifying 10 areas that are fundamental to success: sound advice which just happens to work.

As regular readers will know I have been moaning about my weight for far too long.  I keep meaning to do something about it, and then nothing happens.  Well measurement turns out to be the answer.  By rigorously measuring my calorie intake on a daily basis at last I’m beginning to see results, even though my running has taken a bit of a back seat recently.  And I’m still eating everything I enjoy, admittedly in smaller quantities.

This isn't rocket science, but neither is it the Atkins diet, the cabbage soup diet or even the Dukan diet.  It's the measurement diet.  And it works astonishingly well, without buying a single book, DVD or branded kitchen scales.

Peters recommends regularly celebrating small successes, a Danish pastry for meeting a project milestone or whatever.  It’s nothing more complex than carrot and stick, or positive reinforcement, but it has a dramatic and hugely beneficial effect.  I'm looking forward to my slap up meal for losing a stone!

Thank you, Mr Peters.  Still inspiring excellence after all these years ...

And just in case you can’t find the article when you type “What Gets Measured Gets Done” into Google, here’s a link to the essay:  http://www.tompeters.com/col_entries.php?note=005143&year=1986. 

Marketing results matter

Marketing results matter - good results and bad results - and are well worth studying. And here's why.

If you don’t pay attention to the results of your marketing, you are not listening to your prospective customers. They tell you, through their responses (positive, negative or indifferent), what is relevant to them and what is not. They tell you what is addressing their problems, and what is not. They tell you what they need, and what they don’t need. Powerful stuff.

History shows that companies who don’t listen to their market get results that match their attentiveness.

So pay attention to your marketing results – good, bad and indifferent.

Sports psychology

As the London Olympics and my own ambitious half marathon edge closer, I’m struck by how useful sports psychology is in business. Of course, this is hardly a new thought. Many sports people have made the transition into business life and have carved out successful careers using their planning and visualisation skills. Sebastian Coe’s book “The Winning Mind” talks of the importance of having a shared vision that everyone understands and believes in, and his success on and off the track make whatever he has to say noteworthy.

I’m struck by how setting a goal like a half marathon, and believing that somehow I can do it, starts a chain of activities that little by little bring me closer to my goal (as well as sore legs). Business is no different. Setting a goal that everyone believes is stretching, but possible, also starts tasks and activities that bring the team closer to achieving their objective. In both disciplines there are ups and downs, delight and despair, but there is no doubt about the magnetism of a crystal clear goal.

The difference, of course, between business and sports is that business goals are often more complex. The chances of success are less clearly defined, and often they rely on many people working together. All of this makes business objectives a great deal less straight forward than running a half marathon. I think, though, that there is enough overlap for the analogy to be useful.

The lesson is clear – the more clarity and visibility you can bring to your goals, the more likely they are to be achieved. And they have the added advantage of not hurting your feet.

SharePoint 2010 - here at last!

Microsoft’s SharePoint 2010 was released yesterday. For me it has been a very long wait. SharePoint 2010 includes a new feature called Performance Point Services, which enable users to create dashboards and track KPIs. It is exciting stuff. We’ve been running the beta for some time, so it will be great to cut across to the full version.

I celebrated by attending a BI seminar at Microsoft yesterday. Well, I didn’t quite celebrate as my running schedule didn’t allow me to have a glass of celebratory champagne, but the quality of the presentations more than made up for it. Rafal Lukawiecki presented a day packed with demos and explanation of what Microsoft’s Business Intelligence suite was capable of. It was really inspiring.

Business intelligence is a discipline that is still very much in the hands of the IT department and far too few business users. Yet if Microsoft’s vision is realised, it will be as prevalent as spreadsheets are today. Better and faster information for all. I’ll drink to that. At least I would, if I was allowed to …

We are all connected

Performance measurement can seem threatening. If you measure something I’m doing, you might figure out that I’m not doing it very well. I’m not going to like that, so I’ll probably put every obstacle in your way to make sure any performance measurement initiative is killed off quietly and quickly.

Of course what I’m missing is that improving something isn’t about me, me, me (although I like to think everything is about me, me, me). When we improve something at work it’s pretty much always by a number of people working together so that many more people (customers, shareholders, other employees) can benefit. Because we are all connected; no woman is an island. And no performance improvement initiative is about any one person. Or group of people for that matter. It’s about How We Do Things Around Here, and How To Make What We Do More Efficient.

Which kinda of leaves the whole me, me, me thing looking a bit daft....

An example of a powerful metric in use

Mortality ratios

Yesterday’s posting about performance metrics in the UK’s NHS system provoked much comment and discussion. The BBC’s Panorama investigated the discrepancies between certain hospitals’ own assessment of their performance, and independent assessments of their performance. In rather too many cases the discrepancies were significant.

One metric that caught my attention was discussed by Professor Brian Jarman of Imperial College, London. The hospital standardized mortality ratio compares the number of deaths expected and the number of in-patients at a hospital who actually die. Professor Jarman’s response to the interviewer’s questions was particularly instructive. When asked about the relevance of the metric he replied that it could indicate:

1. Data had been incorrectly entered
2. Something was wrong with the calculation
3. There is a problem with patient care

And he listed these possibilities in that order. In other words, the metric was an indicator that highlighted the need for further investigation. It was not an indicator that provided cut and dried proof of a problem. He went on to say that in one instance the ratio had highlighted a problem for ten years.

This is how performance metrics are designed to be used:

• An alert to a potential problem
• A need to investigate further
• Trends (upwards, downwards, consistently bad, consistently good) tell you more than any one single metric.

From my own experience I know that the NHS is not the only example of this mis-match between reported performance and actual performance. If there is any justice for tax payers this will run and run.

Learning organisation or measuring organisation?

The Sunday Times’ article yesterday about the failings of the NHS performance management system was disturbing: Labour hid ugly truth about National Health Service.

Any organisation that gives higher priority to performance measures, rather than to its core business, needs to ask some harsh questions. In this instance it will be the country asking the questions – not only of the NHS but also of the government.

Since the days of Florence Nightingale we have understood the need for basic hygiene in order to prevent infection. It seems that performance measures were able to wipe away 250 years of performance improvement by not following the most basic of health procedures.

So when results like this are achieved from a performance measurement system that we can only presume was meant well, where does the blame lie?

It would be both true and too easy to say the blame lies with the leadership. Fish rot from the head down, and those in positions of leadership must shoulder the greatest share of the responsibility. But when a trained nurse does not pay attention to basics such as washing hands, or disinfecting areas where patients are cared for, there is either a massive culture problem, or a problem with basic training. My money would be on the issues of culture, many of which have been well documented.

However, those who devised and rolled out the targets must be feeling uncomfortable now the results of their performance management exercise have been revelealed:

“Most targets and standards appear to be defined in professional, organisational and political terms, not in patients’ experience of care.”

Maybe that’s easy to say with hindsight, but for the rest of us it is a chilling reminder that performance measures must be appropriate, tested, and constantly reviewed to ensure the organisation is achieving the results it needs. And not dysfunctional results it doesn’t want.

Performance measures are a way to understand and learn what works and what doesn’t. We all make mistakes, and performance measures are not easy to get right. But what is unforgiveable is to let such a bad situation go on so long. Performance measures should be a tool for the learning organisation, not a control mechanism for the measuring organisation.

Nurturing innovation and the measures that drive it

Cocreative founder Jacqui Hogan specialises in helping businesses be more creative and innovative. She is passionate about innovation and doesn’t pull her punches. With her trademark sunny smile she will tell you that:

“If you always do what you always did, you will always get what you always got.”

So I asked Jacqui why innovation is so important in business.

“The business world is constantly changing, so if you are not innovating you are losing out to competitors who are. It’s as simple as that. Unless innovation is part of your business you will still be going to meetings on horses while your competitors are polishing their fleet of fuel efficient hybrid cars.”

Jacqui works with small and medium sized businesses on the full cycle of innovation – from idea generation to implementation and risk analysis. But innovation is by definition a creative process. I asked Jacqui whether it can, or should, be measured.

“Measuring innovation poses some challenges, as it is a highly uncertain process. Businesses define innovation differently; it can be anything from incremental improvements to big step change developments.

But unless you measure it in some way, you have no feedback on what is happening. Innovation is important to all businesses, so there needs to be some sort of framework that includes targets, so you can make sure there is always something coming through the innovation pipeline.

There are three basic ways to measure innovation:

1. Input – the time and resources that go into the process. KPIs might include % of time or % of turnover spent on innovation.
2. Output – what you get from what you spend. KPIs include number of patents or ideas generated.
3. Effectiveness – this is how successful you have been. Performance indicators might be number of new products brought to market, or % revenue from new products.

Not all new ideas are successful, but that doesn’t mean you should stop innovating. Also, there can sometimes be a significant time lag between having the idea and implementing something. And even then, it might have changed considerably from the original idea. So measuring effectiveness can be difficult.

As with all performance measurements, you need to use measures as just one tool, not the whole toolkit. Measuring the number of ideas generated might make you feel you are being innovative, but unless ideas are progressed they are worthless. So you need measures at each stage.

I also think you need to be very clear about what you want to achieve through innovation, and measure your performance accordingly. Different businesses, and different executives, can have very different ideas.”

Given the challenges with measuring innovation I asked Jacqui what her advice would be to businesses who want to be more innovative.

“Don’t expect people to do it in their spare time. That just sends the message that it’s not important. Build some sort of innovation measure into the appraisal process; that helps everyone focus. You can’t expect everyone to be creative and innovative, and in fact that’s not necessary. Many different talents are needed to turn ideas into something that can be marketed.

But most of all I would advise companies to make sure innovation is included in their performance measurements because otherwise it won’t happen consistently. And that’s important if you want to stay competitive.”

Jacqui Hogan is the innovative energy behind cocreative, a consultancy that helps businesses be more successful with innovation and creativity.