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Performance Measurement is Everywhere
One of the many benefits of performance measurement is its ability to help us understand and provide context to the past. Most modern organizations, which find themselves drowning in a sea of raw data while yearning for real insights, would undoubtedly agree this attribute of measurement provides a vital service. However, the very best performance measures also allow us to extend our gaze into, and therefore plan for, the future.
Of course this necessity of peering into the future in order to craft a proactive response applies to virtually any organization, in any discipline. One unique application of this facet of measurement is the prevention of gang violence in Los Angeles. With gang-related homicides numbering in the hundreds, it’s vital that police officers be equipped with the very best information in order to prevent future attacks on a population that is almost exclusively young and extremely vulnerable.
An anthropologist at the University of California Los Angeles (UCLA) is using a novel measurement approach to combat the problem. His name is P. Jeffrey Brantingham and his method is something called the Lotka-Volterra equations. Back in the 1920s Lotka, an American statistician, and Volterra, an Italian mathematician discovered that similar-sized rival groups of a species will claim territories whose boundaries form a perpendicular line halfway between each group’s home base. Brantingham and his team at UCLA took the equations and, using police data on the location of thirteen approximately equal sized gangs in East Los Angeles, mapped their ‘anchor points’ or home base. With the anchor established, they were able to draw corresponding boundaries for each gang’s territory and predict where violent clashes were most likely to take place. According to their model 58.8% of violence would occur less than a fifth of a mile from the border, 87.5% within two-fifths of a mile, and 99.8% within a full mile. Their predictions turned out to be remarkably accurate. Of the actual 563 gang-related incidents over a three-year period, 58.2% were within a fifth of a mile, 83.1% within two-fifths, and 97.7% within a mile.
The breakthrough in this approach is the accuracy with which the researchers can determine a gang border. Police have sketched gang maps for years, but are bound by the conventions of a standard map. That is, they typically draw borders along streets, rivers, etc. The UCLA team’s measurements allow police to pinpoint specific hotspots, and therefore allocate resources with far greater efficiency and effectiveness.
This story should serve as a reminder to us that no problem is immune to the powerful impact of performance measurement and management. Right now there are undoubtedly perplexing issues facing you that may seem to defy measurement, but if you scratch below the surface, look to history as a guide, and apply some creativity to the situation you will find a measurement that yields astounding insights.
Sources:
Joseph Stromberg, “Mapping Turf Wars,” Smithsonian, April 2013, page 24.
What a difference words can do!
In my young days I worked for a big fortune 250 company. As the financial controller working in the shared services department, I had an experience which, I will never forget. All the managers (40 in total) were gathered for an extended management meeting and as a young controller I watched the Vice President speak to the managers.
He started his speech with good words. As we were in the corporate shared service center of a company of 20000 employees we were often regarded as “cost center” and “overhead”. We were not a part of the core business. But that day the Vice President “raised us up” and gave us value and new energy.
He started by saying “you are the oil in the machinery” and “without your services our company could never operate”. “You are valuable and the work you do is very valuable for the company”.
Then he started telling some challenging things to us like the overall cost in the company was too high, and that this was discussed in the last management meeting with the CEO and all the VP’s. The Group had to cut cost of about USD 100 million… and he continued with his magical words that transformed all of us:
“I am so proud of representing the shared services division, and I know what capacity is there in you. And I believe so much in you. So in the top management meeting I “jumped up” and said “I believe so much in my shared services division – we will take half of the cost cut”.
Normally this would have made people angry. I have never met people that are comfortable with cutting costs. But the VP’s speech changed it all. He gave us value and he believed in us. The result was outstanding. In less than one week we had a plan for the cost cut and we managed to keep our new budgets.
May be business schools should have more psychology in the subjects they teach. It is all about humans – Winning the hearts and minds of the people.
The unique formula
Title: The unique formula
Most of you may have heard about the formula E=mc2. It is a foundational formula for the world we live in.
Similarly,the foundational formula for business is Strategy * Execution = Results.
A small repetition of the basic mathematic knowledge:
No strategy ⇒ 0 strategy * Execution = 0 results.
No execution ⇒ Strategy * 0 Execution = 0 results
Most companies have a strategy, but fail to execute it. In order to maximize the output of business, exercise on Execution. If your company does not have the skill of execution, go and get the competence. There are many good training courses in Strategy execution available.
Navigation by stars
There is an old quote that goes like this: “The old sailors steered by the stars, not to get there, but to keep a steady course”. This wisdom can also be applied by businesses. Our vision, mission and long term goals function as the stars. Even if you don’t get there they help to keep a steady course for your company and to make sure you move in the right direction.
Nowadays companies are taken aback by the short term winds and streams in the “business oceans” – and start to diverge from their original course and purpose. New seamen are set as captains, and new routes are planned. But probably we should lift our heads and navigate by the more long term vision, mission and goals of your company and “trust” the stars.
Three Resolutions for Every Leader
2013 is here, and many of us will be thinking about how we can change our lives for the better this year. Accordingly we will make a number of resolutions. For all of you leaders out there (and really, we’re all leaders in one capacity or another), here are three resolutions I suggest you consider, to improve your organizational performance.
1) Listen more: I’ve written previously about our tendency to be poor listeners (see “Are You Listening” at Senalosa.com), citing the sorry statistic that we listen at about a 25 percent comprehension rate. Two recent events brought this home to me on a very personal level. The first was a thirty minute so-called “exchange of ideas” meeting with the CEO of a company with whom I was considering a partnership. He spoke for at least twenty-seven of those thirty minutes, with no regard whatsoever for my input. Some exchange! More like a verbal tsunami. Not long afterward I was on the phone with someone who also graduated from the machine gun school of conversation. At one point, when I was able to squeeze a word into this ‘conversation,’ I mentioned the importance of listening in successful consulting engagements. He immediately broke in saying, “You’re right; I used to talk a lot, but now I mostly listen.” It was everything I could do to withhold my laughter. Not only is this behavior impolite, it’s counter-productive. We spend seven out of every ten minutes communicating with someone, and fully 45 percent of our time at the office is spent listening. If just a quarter of that information is getting through, think of the knowledge and productivity we’re squandering.
2) Connect the dots: The CEO of a utility company asked his workers why they get up at 2:00 a.m., go out in the snow and risk their lives climbing a pole to get the electricity back up and running. Not a single one said it was because of the extra overtime money he’d receive. Instead, they replied that they did it because of the feeling they get upon seeing that cascade of lights come back on across the community. They know there are a lot of happy people there, and that provides them with a feeling of deep satisfaction. That’s connecting the dots between a job and the outcome it produces for a customer, and it doesn’t take a power outage to produce it. What can you do to make that connection for your employees?
3) Question “expert” advice: I recently had the chance to hear a well-known business guru address an audience on a number of topics, including talent management and how to successfully negotiate change. His advice for talent? Hire all the 23 year olds you can because they’ll ask questions ‘older’ workers are too hardened to ask. Huh? This flies in the face of most thinking about maximizing human capital and harnessing employee knowledge. And it’s ridiculous to suggest that ‘older’ people don’t want to learn. Later, on the subject of change, he suggested that when people criticize the case for change ask them why five times and you’ll eventually get to something that’s embarrassing to them. I question this as well. Why would you try to humiliate someone to get them to support your change agenda? Surely there are better, more humane and dignified ways. There is so much advice out there these days, and in order to stay relevant and create attention for themselves in an increasingly crowded market, it seems some so-called experts feel they have to constantly push the envelope of accepted practice. However, in doing so their advice sometimes roars past the respectable label of iconoclastic and simply doesn’t fit with the reality on the ground. So listen to the experts (couldn’t resist another listening plug), but be sure to bring in your own unique blend of knowledge and experience when assessing their guidance and its relevance for your organization.