In my introductory post, 12 Vital signs of Organizational Health, I listed the 12 signs. Here is sign #10:
A healthy organization knows what to measure, and measures effectively.
I try to write about what I know about. I’m pretty much out of my league on this one.
I do know this. We are getting much better at measuring stuff. We are getting better at measuring the right stuff — knowing what to measure. And obviously, technology is what is making this more and more possible.
We have learned to keep better records. Of everything we can think to keep records of. In the “personal” realm, there are now apps for keeping track of the calories we eat, keeping track of the calories we burn in exercise, keeping track of our blood pressure readings, our blood sugar readings… apps for keeping track of everything we can think of to keep track of.
And, with all of this data (let’s call this “little big data”), we create our own personal checklists.
But the big phrase is “big data.” And I think it means this – seemingly everything is kept track of by the magic computers in the cloud, and pulling all of this data together means that we can better “predict” weather patterns, disease spread, and a whole lot more – including business trends. In other words, we are getting better and better at knowing with something close to precision what happened, what worked — so that we can move forward armed with this knowledge.
And because of this, we learn to create “checklists” of the most important items to get right. In his excellent (shall I say “must read”) book The Checklist Manifesto, Atul Gawande makes the case that in every arena, a checklist, followed meticulously, will create more effectiveness, and keep us from doing anything too stupid. Here are a couple of key quotes from his book:
Checklists remind us of the minimum necessary steps and make them explicit. Checklists help with memory recall and clearly set out the minimum necessary steps in a process.
Checklists can provide protection against elementary errors. You want people to get the stupid stuff right. Yet you also want to leave room for craft and judgment and the ability to respond to unexpected difficulties that arise along the way. The value of checklists for simple problems seems self-evident. But can they help avert failure when the problems combine everything from the simple to the complex? (He answers, in his book, “yes”).
So, lets’ say that you get good at measuring. You get good at keeping records of what you measure. Then you have the new problem. There is so.much.data to gather, to measure. And with modern technology, we can collect all of this data, so that we end up feeling like we are drowning in data.. So, how do we separate “the signal from the noise?” That is the question that Nate Silver addressed in his terrific book by that title, The Signal and the Noise. In his book, Mr. Silver warns:
The signal is the truth. The noise is what distracts us from the truth. This is a book about the signal and the noise.
The instinctual shortcut that we take when we have “too much information” is to engage with it selectively, picking out the parts we like and ignoring the remainder, making allies with those who have made the same choices and enemies of the rest.
Now, as I said, this one is out of my league. I am not a numbers guy. I do not much know what to do with data. But I have come to understand that healthy organizations do know how to measure, what to measure, and what to do with what they measure.
And, rather obviously, an organization decides on its own “numbers vital signs.” But whatever numbers an organization decides it must measure, somewhere in the mix will come good and current data on: profits, employee engagement figures, employee retention figures, customer service satisfaction numbers, new customer acquisition numbers…
In other words, healthy organizations know the numbers that indicate progress, the numbers that signal success — and they also know the numbers that indicate trouble spots, and outright we-may-need-to-panic dangers.
My suggestion: read The Signal and the Noise to understand the overall concept we’re talking about here. Then read The Checklist Manifesto, and get to work creating (or refining) good, useful, everyone-on-the-same-page checklists.
And then, don’t let a week slip by without measuring your progress. Measure, measure, measure…
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You can purchase my synopses of The Checklist Manifesto and The Signal and the Noise at our companion web site. Each synopsis comes with a multi-page comprehensive handout, and the audio of my presentation from the First Friday Book Synopsis. You can order the synopses from: 15minutebusinessbooks.com.
First Friday Book Synopsis 