A great deal has been written about the concept of measuring the various components of an organization’s operations. Many industries have created what is known by two general names- either Benchmarks or Key Performance Indicators (KPI) to be able to measure and compare the performance of individual companies against industry-wide standards. The general idea is that any organization can measure the same things that are considered universal within a given industry, get the results and see where they stack up in the continuum.
There is an inherent danger to “competitive” measuring, especially when it is undertaken under the wrong intentions. Under the right conditions, measuring is part of an organized approach to gain a detailed understanding of all of the costs associated with the operation of the enterprise. The more detailed and accurate knowledge any organization can acquire and measure, the more likely it will be able to pinpoint areas where changes can be implemented and improvements made.
The danger of competitive measuring lies both in the initial comparison to industry “standards” and the drive to meet or exceed them. My experience in healthcare goes something like this: The CEO attends a national conference with his/her peers. At that conference is a keynote speaker who represents “the next best thing”. The speaker usually has a book to hawk- a book chronicling the turnaround and gigantic success of the organization that implemented the principles detailed in the book. Giddy with the message, the CEO buys fifty copies of the book, takes them home, calls a special meeting of the management staff in which the condensed details of the stirring keynote address are glowingly recounted, ending with a “We can do this, too” and an exhortation something like, “You will all read this book and in six months we will turn the company around and have the sane success as ——- did.”
Two chapters into the book, the management staff begins to see a problem. The organization run by the “overnight sensation” keynote speaker actually took fifteen years to achieve the successes as reported in the book. It started out by measuring key components of its operation. Assiduously, it measured those same components week by week, month by month and year by year. Across that span of time, those measurements produced noticeable trends, identified targets for action and did things.
After fifteen years, the things they did produced measurable results and the CEO became a momentary celebrity- a celebrity who made the national speaking circuit, put some extra bucks in the bank and, in some cases, even carved out a personal opportunity to found a company to sell and teach and exploit the golden principles he/she discovered.
Great for that CEO.
But not necessarily so great for the organization whose fifty leading managers were given six months to transform the business. Here is what usually happens: For the first month, fifteen or twenty of the managers go gangbusters trying to implement the practices and impress the CEO. After that, enthusiasm fades, day to day priorities take over.
And the fire in the belly of the CEO begins to cool as well.
By the seventh month, the targets are missed. Little or nothing is even mentioned at the monthly leadership meeting. Things return to the way they were before the meeting six months ago, and they will remain that way.
Until the next big meeting the CEO attends.
So what is the major difference between the big time CEO’s company and the one off company?
Despite the national hoopla and recognition achieved fifteen years after the beginning, the big time CEO’s company started out (and for fifteen years continued) doing the right things for the right reasons. They measured their company’s performance in the areas they deemed important month after month. They worked hard because they wanted to improve, and after 180 months of relentless effort, their work bore fruit. They got better. They celebrated their successes, learned from their failures and moved on to the next step.
Their goal was not to achieve national prominence and fame. Their goal was to make things better.
And because of their intent, focus, relentless effort and absence of any motive beyond a genuine desire to become the absolute best company they could become, they succeeded.
And so, the answer to the question, “Why measure” is simple: To get better, and better, and better until you become the best you can be.
And when you have gotten as good as you can be in one category, you start on another- for the same reasons as you started on the first.
Measurement is a homegrown inside out thing. Reading someone’s book and trying to implement the principles mentioned from the outside in simply will not work.
The difference is Authenticity and a locally-generated commitment to gathering and measuring facts in order to make things better. The danger of measuring blindly against national standards or trying to reach goals you read about in best-selling business books is context.
Context is what separates every situation from every other no matter how similar. Context is why men can’t understand the pain associated with giving birth or why people who have been in combat can’t share their stories with people who have never been there. Context brings with it a link to a second factor- milieu, or the social structure in which things take place. Context and milieu create a shared experience- one which can change and grow over time and create a situation in which, with fifteen years of concerted effort, real measurable change can be attained.
Without context, you are simply measuring numbers against numbers. It’s like blindly looking at baseball statistics and saying that Ty Cobb (.367) was a better hitter than Ted Williams (.344). When Cobb played, the league was all-white. Baseballs turned to mush after five innings and gloves had little webbing and no strings to secure the fingers together. There was no night baseball, less media pressure and pitchers usually pitched the full nine innings no matter how badly they were getting beaten. Williams, whose statistics were extremely impressive by any measure, lost nearly five prime years of his career to military service. Had he not served in two wars, he would have doubtless garnered 3,000 hits and probably hit over 700 home runs- a feat that at that time had only been accomplished by Babe Ruth. Williams did all this during a time when (1) blacks had entered the league, (2) night games comprised more than 50% of the contests, (3) specialists called “relief pitchers” added two to three innings of new problems for hitters to solve to every ball game and infield shifts set up to specifically deal with one Theodore Samuel Williams, lowered batting averages by scores of points.
The difference between the two left-handed hitters? Context and milieu. When asked about Ty Cobb versus himself, Pete Rose remarked, “When Ty Cobb played, there were no Black players to turn triples into fly outs.”
Context and Milieu.
So, Why Measure?
To harvest the data to be able to make a difference.
If you find yourself interested in finding hidden savings, please contact St. Onge. Our experts stand ready to take a look at your operation and find the opportunities you may have overlooked. You can reach me at fcrans@stonge.com or call me at 563-503-1847.
