It is a truism that "you manage what you measure."
The reasons why are simple:
The reasons why are simple:
- The measures are deemed important enough to warrant the effort to manage directly - which means that the right information at the right time is required.
- What is being managed is deemed to be tied directly to the success - or failure - of the department/division/enterprise to warrant the effort.
- Someone's - or more than one person's - compensation and/or future existence within the enterprise are dependent upon how that particular area is performing - based on the measures.
In those cases, not only are those measures managed, but they are known by enough people to be usable for everything from strategic and operational decision making to succession planning or terminations.
There is, however, an obverse to this as well. Sometimes, you measure and you manage - but you don't tell. At least not many.
Sometimes, that's necessary. I'm a great believer in information management. In fact, I think that not enough thought - and forethought - is put into either measurement decisions or the ways that the information from those measures are being disseminated (or not) in the enterprise.
Information just moves...as if it has a life of its own.
(Just so you know, it doesn't. Whenever and wherever information moves - or doesn't - there is a purpose on the part of the person making the distribution decision. And that purpose is not always in line with what you want or are working to achieve.)
But when information - particularly measures - are seen as being purposefully withheld, more and worse questions arise. In those cases, you're asking for trouble. You may well deserve it.
You've entered into the world of "transparency" - and a murky, distrusted world it is.
We're watching this happen now - and you've got your choices of which organizations deserve to join the "Corporate Perp Walk Hall of Fame." (This is the next iteration of the "Executive Perp Walks" so popular a few years ago.)
Right now, we have two major corporations tied for first place.
To start, there's Goldman Sachs not quite being upfront with their customers about what they know and when they know it - not least whether the firm is betting against what they're selling with as good as insider information.
That decision has led them to being sued by the Securities and Exchange Commission for fraud - which has led to a 26% drop in their share value (to be fair, that includes a lot of other variables causing a market correction) and the possibility - if they can pull it off - of getting away with only a $1billion settlement. (That's Goldman chump change. In fact, they'd undoubtedly see it as a good investment.)
(On a side note, Warren Buffett has it completely wrong when he defends Goldman. That's self-serving - he has a really big investment making lots of money from Goldman - and disingenuous. This is an ethical issue and he well knows it.)
And, in a tie position, you've got BP - who are making a worse mess of their mess than they already created in the Gulf.
Because BP's executives are so concerned - now - with what will happen later when the litigation really hits, that their unaccepted, disingenuous replies range from:
- "It's their fault" (not a good strategy in a Congressional hearing with the counterparts sitting next to you doing the same thing) to
- "It's only a moderate spill" (which is patently untrue - and sounds even worse to an angry American audience when it is said by the British accented CEO to a British television network) to
- "It's impossible to measure the amount of oil being spilled" (which has now been completely debunked by a quartet of scientists who figured out a way all on their own).
It doesn't matter what industry you're in - or, for that matter, what country or sector. The problem that comes from all of this activity is that there is less and less trust extended to you by your customers. In their eyes, they have no reason to trust you. You're probably just like all the rest.
So, before you make your next set of decisions or as you start reviewing the most recent data being handed to you, stop and think for a moment. Then ask yourself:
- What are we measuring?
- Are those measurements giving us the best, most useful information?
- How do we know? How are those data tied to strategic and operational goals?
- How are these data being disseminated - and to whom?
- Who else should get them?
And the seminal question: What are we hiding?
Because you can count on it. If you're hiding anything - then something is being hidden from you.
And you really don't want that keeping you up at night.