How Do You Measure Success?
September 4, 2013
By Laurie Clarke, COO, The Tatham Group
Can there be negative consequences when a process measure migrates into being an output measure?
A Tatham trainee asked this question recently, and we thought it was a good one.
When we get excited about the usefulness of a measure, do we have a tendency to overuse it? Or, do we attempt to use it in more situations than it was designed for?
Two examples that were given to illustrate the danger of this migration were:
- Some hotels have the output measure of ‘the guest feels at home’. A process measure may be if the employees greet the guest. If employees start to be measured and rewarded on greetings (shift to output measure) then it can have an adverse effect on the overall output of the guest feeling welcome. Greetings for the sake of greeting can feel insincere leaving the guest annoyed and feeling unwelcome.
- The number of battles won as a process measure for winning the war (the desired output). If winning battles becomes the desired outcome then you may in fact lose the war. Some battles must be lost in order to win. But will you lose a battle to win the war if you are measured on battles won?
An increase in situations where process measures have been shifted speaks to a much greater strategy flaw: the focus on short-term objectives with little or no view of the long-term effects.
Can you give an example of a measure that lost its usefulness when it was made into an output measure?