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Staying Relevant

By Samuel Greengard  |  Posted 04-13-2009 Print

If all of this seems like a three-dimensional game of chess, welcome to the real world of metrics. Benchmarking pioneer Howard Rubin, president of consulting firm Rubin Worldwide, stresses the importance of creating a "parallax view" in order to gain a good perspective: "An organization must look at things from different angles--and use different metrics--in order to understand if it is getting consistent readings." He describes metrics and benchmarking as a largely forensic process that allows a CIO and other executives to view patterns, form hypotheses and then optimize systems. "No single strategic metric is valuable by itself," Rubin explains.

When used effectively, a suite of high-level strategic metrics--experts say anywhere from eight to 12 is ideal--provides multiple dimensions in which to view overall performance on at least a quarterly basis, if not in real time. Underneath this layer, an organization may rely on dozens or hundreds of more tactical benchmarks to measure a variety of things. Some of these may be tied directly to IT--others indirectly or not at all.

Moreover, since metrics ultimately hinge on strategic objectives, they should remain relevant for three to five years ... or longer. Every few years, Kaplan says, it's good to go back to a blank slate and engage in a complete refresh of metrics. It's particularly important when a disruptive technology, such as the Internet or mobile communications, comes along and fundamentally changes the nature of business interaction.

Rubin also emphasizes that results aren't binary. Just because an organization deviates from a benchmark doesn't mean it has failed and that heads should roll. At the end of the day, it's essential to rely on human interpretation and analysis to combine hard data with expertise and experience. "People have to read the metrics and the indicators and make good decisions," he says. "A benchmark is best viewed as a continuous calibration tool [that can be used] to identify opportunities and form hypotheses."

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