Want to be a good organisation? Then you should be reviewing everything you do and using it inform future strategies. Tom Cheesewright asks how modern managers measure up
"If a tree falls in a forest and no one is around to hear it, does it make a sound?" This isn’t a philosophical question, it’s a management issue. It’s about measurement.
When I start to work with organisations as an applied futurist, numbers are the first thing I ask for. I want to know the state of play today. Everyone has a feel for how things are going. But many times, if not most, I find that there is very little data to back up this instinct. Vital components of an organisation’s core business are not measured.
This is anathema to me coming from start-up land where the importance of measurement is probably the single biggest lesson I learned. If a tree falls in the forest I want to know which direction it fell in, what caused it to fall and whether it bought anything on the way down.
In a software-driven organisation - and most are – there is very little excuse for not measuring the things that matter.
Cut and waste
Measurement used to be painful. In my first job we had to measure press coverage for a large computer maker. This meant cutting each article out of the newspaper of magazine, measuring it with a ruler, and then multiplying its area by a positivity factor to give it a score. This consumed an obscene proportion of the account team’s time. But at the end of each month we could go back to our client with a number that gave them some idea of their performance in the media and by association, ours.
This was a terrible form of measurement. It was enormously inefficient, diverting people away from delivering results. It was hugely inaccurate, with the score depending in part on the scorer’s mood. But most importantly the number we generated bore little relation to the real numbers the business cared about: costs, revenue, and profit.
What we were measuring was so abstracted from financial value to the business that it was always hard to justify the value that we as a business had added. The best measurements are almost always made in terms of pounds and pence, or they can be directly connected to something that is. And they are made automatically, not manually.
Sensing the smart city
The city of Santander in Cantabria is probably one of the most measured places in the world. Here the local university and Telefonica have installed more than 12,000 sensors measuring everything from air quality to parking space occupation.
All of this data is automatically collected, processed and presented back to the council and the citizens in a variety of formats: no manual intervention required. Signs point drivers to clear parking spaces. An interactive map shows detailed traffic information from sensors on taxis and buses. Planners can see clear information about noise pollution and air quality when making decisions. Operations teams can ensure the minimum energy is used to heat buildings based on the prevailing environmental conditions.
There are no numbers yet from Santander on the returns in this investment in measurement – it’s an EU-funded experimental project that is still being rolled out and refined. But I met the mayor on a visit a couple of weeks ago and he’s bullish about the results.
Collect, process, present, action
What the mayor of Santander can do on a macro scale, every manager can do on a micro scale. Software captures most business processes today, be it a proper workflow system, email, social media or the web. That means there is data to work with. The challenge is extracting, processing and presenting this data in a meaningful fashion.
Today that doesn’t mean a weekly investment of time with scissors and a ruler. You can extract data from most software in an automated fashion. This is your equivalent of Santander’s 12,000 sensors.
You could process the data in a spreadsheet, if that’s your thing. There are loads of tools and templates out there to get you started. But there are also free or low-cost cloud-based tools like Geckoboard that can collect and process the data, and present it clearly with minimal effort. A small capital investment of your time will build you a dashboard that will update itself with the stats that matter to you from around your business.
Because it is so easy to collect and process data these days, it’s easy to measure too much. Remember: everything you measure should tell you something about the performance of your piece of the organisation, whether it’s an urgent issue that you need to take action to resolve today, or a long term trend that you need to plan for tomorrow.