What's Best Next

How Do You Assess Performance that Defies Measurement?

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Yesterday we saw that a great organization is one that delivers superior performance and makes a distinctive impact over a long period of time.

But how do you measure “superior performance” and “impact”? — especially in the social sectors, where they are hard to quantify and thus largely defy measurement?

Jim Collins answers in Good to Great and the Social Sectors:

For a business, financial returns are a perfectly legitimate measure of performance. For a social sector organization, however, performance must be assessed relative to mission, not financial returns. In the social sectors, the critical question is not “How much money do we make per dollar of invested capital?” but “How effectively do we deliver on our mission and make a distinctive impact, relative to our resources?”

Now, you may be thinking, “OK, but collegiate sports programs and police departments have one giant advantage: you can measure win records and crime rates. What if your outputs are inherently not measurable?

The basic idea is still the same: separate inputs from outputs, and hold yourself accountable for progress in outputs, even if those outputs defy measurement.

Here’s the key point:

It doesn’t really matter whether you can quantify your results. What matters is that you rigorously assemble evidence — quantitative or qualitative — to track your progress.

If the evidence is primarily qualitative, think like a trial lawyer assembling the combined body of evidence. If the evidence is primarily quantitative, then think of yourself as a laboratory scientist assembling and assessing the data.

To throw our hands up and say, “But we cannot measure performance in the social sectors the way you can in a business” is simply lack of discipline.

All indicators are flawed, whether qualitative or quantitative. Test scores are flawed, mammograms are flawed, crime data are flawed, customer service data are flawed, patient-outcome data are flawed.

What matters is not finding the perfect indicator, but settling upon a consistent and intelligent method of assessing your output results, and then tracking your trajectory with rigor.

So when there are aspects of your performance that seem to defy measurement, you aren’t stuck. You just need to think in terms of assembling evidence.

Much of that evidence may be qualitative. But that’s fine — in that case you are just thinking like a trial lawyer rather than a laboratory scientist. Therefore, lack of easily quantifiable performance outputs does not need to preclude your ability to give intelligent thought to identifying a consistent method for assessing results, and tracking them with rigor.

Intel's Multitasking Concept Brings You Three More Screens

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From Fast Company:

Sitting in the coffee shop with forty Firefox tabs open on your laptop, wishing you had one more monitor? Or three? Today at IDF, Intel introduced a multi-tasking concept PC that allows users to work on their main screen while providing three small auxiliary screens above the keyboard for organizing and accessing smaller, snackable chunks of info from their PCs.

The concept PC was developed with an eye toward future-gen laptops–on which you can organize more information while still reducing the size of your notebook. Without affecting the information or activity on the main screen, you can access information–say, a phone number in your address book or a reminder you’ve placed in your sticky notes–while keeping the desktop as clutter-free as possible.

I’d like to see this — or something like it — catch on. It is very needed, and a solution like “Spaces” for Mac doesn’t do the trick for me because you still have to switch screens.

Avoid the Gray Twilight

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From Theodore Roosevelt (quoted in Built to Last):

Far better to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory, not defeat.

What is a Great Organization?

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Jim Collins gives a very helpful, succinct, and profound definition of a great organization in Good to Great and the Social Sectors:

A great organization is one that delivers superior performance and makes a distinctive impact over a long period of time.

So there are three characteristics of a great organization. They are:

  1. Superior performance
  2. Distinctive impact
  3. Lasting endurance

I think we ought to aim to build great organizations, and so it is helpful to have a good outline of what that means. It’s not enough to just say “we should seek to make our organizations great.” We need to know what that means. This is a good start.

Having this before us, though, also leads to more questions — such as “Why should you try to build something great?” and “How do you assess how your organization is doing on these qualities, especially when they are hard to measure?” I’ll address these questions in upcoming posts.

More Than Profit

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In Built to Last: Successful Habits of Visionary Companies, Jim Collins points out that the most successful companies do not exist first and foremost to maximize profits. He writes:

Contrary to business school doctrine, “maximizing shareholder wealth” or “profit maximization” has not been the dominant driving force or primary objective through the history of the visionary companies.

Visionary companies pursue a cluster of objectives, of which making money is only one — and not necessarily the primary one.

Yes, they seek profits, but they’re equally guided by a core ideology — core values and sense of purpose beyond just making money.

Yet, paradoxically, the visionary companies make more money than the more purely profit-driven companies.

The Purpose of Budgeting

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From Good to Great on the purpose of budgeting in an organization — with implications for your personal budgeting as well:

What is the purpose of budgeting? Most answer that budgeting exists to decide how much to apportion to each activity, or to manage costs, or both. From a good-to-great perspective, both of these answers are wrong.

In a good-to-great transformation, budgeting is a discipline to decide which arenas should be fully funded and which should not be funded at all.

In other words, the budget process is not about figuring out how much each activity gets, but about determining which activities best support the Hedgehog Concept and should be fully strengthened and which should be eliminated entirely.

The point is: we shouldn’t have a mentality of doing “some of everything.” This will distract from doing what is most important. You need to do the right things, and the corollary of that is to stop doing the wrong things. Budgeting is a discipline for making those determinations.

Don’t skimp on what is most important because you need to make room for all sorts of other things, spreading yourself thin. Don’t think that there is virtue in only partially funding things, as though it makes you look more frugal. Instead, fully fund the right things, and in order to make room for that don’t fund at all the wrong things.

And this requires the disciplined thought to identify what the right things are, and what the wrong things are.

On Eliminating Artificial Motivation

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I’m jumping into the middle of a story here from Good to Great (p. 206), but I think you’ll get the point. This has far-reaching implications for many things (including — and perhaps especially — churches):

Of equal importance is what they don’t waste energy on. For example, when the head coach took over the [cross country] program, she found herself burdened with expectations to do “fun programs” and “rah-rah stuff” to motivate the kids and keep them interested — parties, and special trips, and shopping adventures to Nike outlets, and inspirational speeches.

She quickly put an end to nearly all that distracting (and time consuming) activity.

“Look,” she said,”this program will be built on the idea that running is fun, racing is fun, improving is fun, and winning is fun. If you’re not passionate about what we do here, then go find something else to do.”

The result: The number of kids in the program nearly tripled in five years, from thirty to eighty-two.

What's Not Best: Charging a Fee to Get a Discount

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AT&T has a plan where you can save something like $5 per month on your cell bill if enough people in your company have AT&T for their wireless and enroll in the savings program. Something like that.

So I went on to sign up for the savings the other day, and AT&T charged me $36. They charged me $36 to enroll in a program designed to save money. They charged me a fee in order to get the discount.

???

A discount program should, at the very least, produce good-will in the customer. This program does the opposite. Now, AT&T is very close to earning a place on my list of things that should not exist.