Blog

The Real Reason for Measurement in Business

Do you measure things in your organization? What exactly do you measure and why do you measure it? What is your rationale for measuring the things you measure in your business?

 

Is it because measuring is just the right thing to do? Or is it because “what gets measured gets done”? Maybe it’s to manage, control, and improve your business processes. Is it to give you results data on which you can base the variable compensation scheme for your company’s employees? Maybe you measure business performance so that you can put numbers in your annual report or show the street that your business is growing. What does your list of the reasons why your company measures what it does look like?

 

Quickly make your list now. 

 

I suspect that when you do this exercise your list will include many of the reasons listed above. In fact, I hope that it includes more.

 

However, one reason that you might have missed on your list is: to learn.

 

If “to learn” is not at the top of your list of reasons for measuring, you should add it right now and underline it.

TO LEARN 

Bottom line? Learning is the REAL reason why you should measure things in your business.

 

Here are 10 business critical things you should be learning about your organization through measurement:

 

1. Whether your business strategy is moving forward,

2. Whether your strategic objectives are “healthy”,

3. Whether you have strategic and/or operational issues in your company,

4. What the root cause problems are in your business,

5. What solutions have successfully eliminated root cause problems in other parts of your organization (and how they can be applied to similar problems in other parts of your business),

6. How existing and new solutions are doing at eliminating new root cause problems,

7. How one part of your business has achieved success and how that can be applied in other parts of your organization,

8. Whether your theory of how your business works is right,

9. How the elements of your organization really work together to achieve success, and

10. What needs to change about your business strategy if your company is going to be/remain successful. 

 

If creating and reviewing monthly business results reports has become a routine, superficial exercise for you and your team then you are, sadly, missing an opportunity to get the most out of your measurement efforts.

 

Why not try this instead? At your next opportunity, pull out this month’s business results report and ask the people on your team these questions:

 

1. What are these measures/results telling us about our business/strategy/ operations?

2. What can we learn?

3. What actions could/should we take based on what we have learned?

 

Changing your approach and exploring these questions with your employees will yield exciting results for your organization: Giving a more meaningful purpose to measurement and business performance results will increase their value in the eyes of your team. By focusing on the real purpose of measurement – learning – you will engage and energize your organization in a new, exciting way.

 

By shifting your organizational culture to include a focus on learning, you and your team will be more successful in achieving better business results on a consistent, sustainable basis.

 

Put learning on the top of your list today!

5 Comments

  1. Pamela Johnston
    Sep 3, 2010

    Great piece – thanks for sharing it!

  2. Consultski
    Sep 3, 2010

    Sandy, this is a great post full of valid insight. My concern however, as I read it, was that too many of my clients are always in “learning mode” and too few take action on what they already know. Measurements should and do help leaders learn, but without action, nothing happens. I always suggest “make something happen, then seek balance.”
    Maybe you could end on a more aggressive note, like, “Learning sets the stage for your next call to action. Put the lessons learned into practice as soon as possible.”

  3. Sandy Richardson
    Sep 3, 2010

    Tricia:Thanks for the feedback – glad you found the post helpful! Sandy

  4. Sandy Richardson
    Sep 3, 2010

    Tricia: Thanks for the feedback – I’m glad you found the post helpful! Sandy

  5. Sandy Richardson
    Sep 3, 2010

    Thanks for your great comment! I totally agree that learning must result in action (and improvement)- analysis paralysis and navel gazing will get organizations nowhere fast! Taking action is a critical part of the formula for business success (see my post just before this one) Sandy