To many leaders in business it might seem that 'What is Success?' is an obvious question to ask, everyone should know if they work in the same company; this is not always the case. Often what is measured is a definition of success and as a business grows multiple priorities can appear, sometimes working against one another. Bernard Clarke has written this short paper on reviewing and refining what a business measures, to show a practical template leaders can use to align their workforce to common goals.
A key question we ask leaders of a business when assessing their company is ‘How do you know you are successful?’ A private company might declare their cash in the bank as a marker of success. A publicly listed company could show its dividends. A public agency could show its quality of service. A charity might share case stories of those it is helping. These can all be helpful measures but we like to delve a little deeper to test the substance behind the statements.
Last year, we asked one particular senior management team how they measure success. They gladly shared with us several reports, documents and spreadsheets, all of which were detailed and carefully put together. Taken as a whole though we were confused; there was so much information that it was hard to identify the key measures and spot risks or opportunities. Their meetings were long, communication with the Board was complex, and frequently they found themselves chasing data for yet another report rather than planning strategy. They had fallen into a trap; their operational needs had over-taken theirmanagement requirements. Though they led a business with several departments and multiple services, their management data was far too complex. As a result, success was an elusive subject. To highjack the late, great Eric Morecambe’s riposte to world-famous conductor André Previn, “They were looking at all the right information, just not necessarily in the right order!
There is a well-known phrase in management, “what gets measured, gets done”, and it is true that just because something is measured it does not mean the information provided is useful, the best available nor will it be acted upon. Those that remember the New Labour years of UK Government also know that measurement was a mantra of this administration. National indicators, frameworks, KPIs, progress measures, outcomes, etc. abounded. Anecdotal experience showed that many departments, organisations and teams got very good at measuring data to provide the ‘right’ evidence not necessarily the best evidence. So, choosing the right measures is crucial.
For companies and organisations prioritising what is measured is a way of ensuring effective and efficient processes. Going back to our recent client’s needs, we adopted a clear approach to every manager and director we spoke to, asking them this question: What are the three ways you would measure the success of this business? This provoked a heated debate at times but in a few short meetings we forced the client to clarify what knowledge the senior team needed to act in a sufficient operational and strategic capacity. From that decision one document was devised to measure progress, prioritise resources and define success; this improved communication between the managers and directors, it also clarified performance management which aided in the motivation of all staff.
If your senior team is over-whelmed by a mountain of data and reports, you need to ask how effective the leadership of the business can be in such a scenario. Is time being wasted clarifying data or dealing with confusion? A way of responding in this situation is to ask three core questions of your business:
Everything a company does can be allocated to one of these three questions. For instance:
For every business the must, should or could questions will provoke different answers. The service, product, industry, sector, location, structure, culture and values of a business determine the factors at play. If these questions are asked within a company, they provide a key insight into the perspective and priorities of all those involved.
For one small business we assisted a few years ago the staff team placed everything in the MUST box – everything they did was vital. Yet when pushed the management team could begin to divide the business priorities. This showed the gulf in expectation and communication within the business; it highlighted how they needed to work smarter and together to turn the business around.
Another way of looking at the three questions is to slightly alter the language and ask: What would we be fired for if we did not do it? The answer to this question becomes the “MUST DO’s” for a company and those employed by it. This allows an assessment of priorities on different levels:
Great leaders help focus a business on core aims. By doing so they develop a small set (or sometimes lone description) that shows the MUST be done priorities for a business. The managers, teams and workforce can then be aligned to the over-arching need. For example:
These examples show how an over-arching framework helps prioritise actions and improves measurement in business. The key metrics chosen must help demonstrate and advance the core principles of the businesses. It is easy to look back at data and information to group it into reports that provide knowledge about what has been done. Leaders of businesses that know their own must do’s will be able to use the knowledge gathered to plan for the future, i.e. to create wisdom.
So, for your organisation, what are the must, should or could do’s? What is measured in your business and is it effective? Can you understand the priorities of the company and how it is progressing?
If you use this template with your team fantastic, you can refine your reporting and advance the business. If not, then it’s fantastic as well, you now have a starting point to re-align your efforts and a tool to improve what you measure and where success will come from!
Know+Do publish regular Think Papers on a variety management related topics. To help managers, we offer in-house training on a range of business success and management issues. We also have expert performance coaches available to encourage organisational and leadership growth.