Identifying the right benchmarks and making them work isn't merely a journey into numbers and technical data. A company's culture plays a major role in framing any strategy regarding metrics.
One of the biggest problems, says Harvard Business School Professor Robert S. Kaplan, is that CIOs tend to look for external solutions and apply general performance templates, rather than engaging in the self-examination needed to achieve success. "There is far too much emphasis on the most-admired and best-performing organizations," he says.
It's essential to steer clear of the metric du jour. The starting point for any initiative is to understand the organization's identity and what exactly it needs to measure. Is your culture technologically savvy? Does the company take risks, or is the focus on merely keeping things running? Are innovation and continuous improvement pieces of the puzzle, or does the organization operate in a controlled or regulated environment?
Equally important, Kaplan says, is to understand what type of culture an organization strives to be. Not surprisingly, different cultures thrive under entirely different metrics. Ultimately, an enterprise must discern whether it is supporting the metrics it has selected. Are we hiring people appropriate for the culture? Are we putting the technology and work processes in place to support the culture? Are we living the values of the culture?
Unfortunately, many organizations lack the outside-in view that's necessary to build a sound foundation for metrics. They have a skewed view of the business and the culture, and, worse, IT is so busy running the hamster wheel that it can't see that it isn't making any strategic progress. This may necessitate the use of outside consultants or, at the very least, employee surveys and customer surveys that differentiate reality from perception.
The end goal, of course, is to create transparency and accountability across IT and the business. An atmosphere of cooperation and coordination is essential for ensuring that metrics cascade through the organization and create valid connection points. "It's important to be able to understand how and why an organization is falling short and take actions to remedy the situation, rather than looking for who screwed up and where the blame can be assigned," Kaplan says.
The best metrics emphasize outcomes and provide guidance about organizational goals, rather than telling people what to do. When metrics are designed correctly--and clear markers exist along the way--workers understand what they need to accomplish, and the organization is on its way to developing a system that fits the culture like a hand in a glove.
This article was originally published on 04-13-2009
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