Transforming Performance Measurement: Rethinking the Way We Measure and Drive Organizational

305 Pages·2007·1.52 MB·English

by  Dean R. Spitzer

TRANSFORMING
Performance
Measurement
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TRANSFORMING
Performance
Measurement
Rethinking the Way We
Measure and Drive
Organizational Success
DEAN R. SPITZER
American Management Association
New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco
Shanghai • Tokyo • Toronto • Washington, D.C.
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Special discounts on bulk quantities of AMACOM books are
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AMACOM, a division of American Management Association,
1601 Broadway, New York, NY 10019.
Tel: [phone]. Fax: [phone].
E-mail:
To Cynthia, my wonderful wife
To David, my wonderful son
To Marjory Goldman, my wonderful mother
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Contents
Acknowledgments xiii
Introduction 1
The Elusive Search for the Secret of Success 1
Changing the Paradigm 2
A Surprising Truth About Performance Measurement 3
The Purpose of This Book 4
The Transformational Measurement Questionnaire 5
Chapter 1: Why Measurement Is So Powerful 9
The Pervasiveness of Measurement 10
The Challenge of Organizational Measurement 11
The Power of Measurement 12
Performance Measurement Promotes Effective Management 13
The Functions of Performance Measurement 15
Chapter 2: When Measurement Goes Bad 21
The Problem of Measurement Dysfunction 22
A Major Cause of Measurement Dysfunction 23
How Rewards Increase the Potential for Measurement Dysfunction 23
Fear Also Induces Measurement Dysfunction 26
Measuring the Wrong Things 29
Measuring ‘‘Looking Good’’ Rather Than ‘‘Being Good’’ 30
Suboptimization 31
Cheating 33
Measuring Too Much 34
Dysfunctional Measurement and Employees 35
Chapter 3: Why Measurement Goes Bad 36
Motive and Opportunity 36
How People Experience Measurement 38
Employees’ Attitudes Toward Measurement at Work 39
The Context of Measurement 40
Confusing Measurement and Evaluation 41
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viii CONTENTS
Purpose 42
Disempowerment 43
The ‘‘Motivational’’ Use of Measurement 44
Distrust 45
Negative Accountability 45
Resistance to Measurement 46
Opportunity and Motive Revisited 46
The Challenge Ahead 47
Chapter 4: Beginning the Transformation 48
The Transformational Vision 48
How to Realize the Vision: The Four Keys 51
A Roadmap to Success 55
Chapter 5: Creating A Positive Context of Measurement 56
The Context of Measurement 56
The Formal Aspects of the Performance Measurement System 59
The Human Factor 60
The Context of Measurement Continuum 61
A Sure-Fire Indicator of Positive Context of Measurement Change 62
Snapshots from the New Performance Measurement Paradigm 63
The Ongoing Transforming Power of Context 67
Chapter 6: The Focus of Measurement 68
The Importance of Focus 68
Selecting the Right Measures 69
Effectiveness First 71
How Value Is Created and Destroyed 72
Business Models and Strategy 74
Measuring What Matters Most 76
Measuring Intangible Assets 78
High-Leverage Measuring 79
Emergent Measures 81
New Customer Measures 82
Don’t Expect Perfection 84
The Next Step 85
Chapter 7: The Integration of Measurement 86
The Importance of Measurement Integration 86
The Dis-Integrated Organization 87
Dis-Integrated Measurement 89
Dis-Integrated Data 90
Strategic Measurement 90
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CONTENTS ix
The Balanced Scorecard 91
The Value of Measurement Frameworks 93
Measurement Frameworks and Trade-Offs 96
Developing Measurement Frameworks 97
The Need for a CMO 102
The Next Step 102
Chapter 8: The Interactivity of Measurement 103
The Importance of Interactivity 104
Data, Information, Knowledge, and Wisdom 105
The Data-to-Wisdom Conversion Process 108
Examples of Interactivity to Generate Wisdom 109
The Performance Measurement Cycle 110
Dialogue: The Key to Measurement Interactivity 115
Assessing an Organization’s Measurement Capabilities 116
The Challenge of Interactivity Today 118
The Tendency to View Technology as the Panacea 119
Making Progress 120
Chapter 9: Measurement Leadership 121
The Importance of Measurement Leadership 121
Why Measurement Leadership Doesn’t Happen 122
The Tension Between Intuition and Measurement 122
What Happens in the Absence of Measurement Leadership? 123
Routine vs. Transformational Measurement 126
The Challenges of Changing Measurement 127
Leading Transformational Performance Measurement 128
Establishing an Environment Conducive to Change 128
Making the Transformation Happen 132
Measurement Leaders 134
Needed: The Role of Chief Measurement Officer (CMO) 139
Chapter 10: Learning About and from Measurement 140
Transformational Learning 140
The Process of Learning 140
The Learning Loop 142
Transformational Measurement and Double-Loop Learning 144
Organizational Learning 145
Why Smart People Do Dumb Things 147
How Performance Measurement Can Help 148
Learning New Ways of Thinking About Performance Measurement 149
The Keys to Transformational Learning 150
How Well Does Your Organization Learn About and from
Measurement? 159
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