by Jamie Flinchbaugh on July 30, 2010 · 0 comments
In my last post on the theme of looking at metrics as either valid or reliable and the balance between them, I wanted to examine the impact on decisions in the board room. So far we have covered the following:
In the board room, one of the consistently large problems is the balance between the breadth of content that must be understood, and the limited bandwidth in which to absorb and process it. Boards are not a full-time role, but in some ways they need to cover even greater breadth than the CEO. This means designing indicators and metrics for the board to monitor is a daunting task.
In order to maximize the utilization of board time, use of a suite of reliable metrics can provide a steady point of focus. Most of these will be quantitative such as financial, customer-focused, or employee-focused. The use of ratios, as discussed in trying to break the tradeoff, is most helpful. However, the key decision for the board is then how to get more valid insights into what is going on.
How do we know when to do this? Some indicators might be:
- The quantitative metrics change in unpredicted ways: this might indicate that the relationship between key variables have shifted, requiring deeper insight.
- When there is a new learning edge required, such as a new market or customer-base.
- When you need to assess the insights and knowledge of the management team to establish valid understanding of key issues.
A reliable metric is a benefit when bandwidth is a major constraint. But digging deeper into more valid means is necessary, but must be used selectively.
by Jamie Flinchbaugh on July 29, 2010 · 0 comments
This week I’ve been writing about the tradeoff between measuring things in a valid way or a reliable means. Two posts published so far are:
How does this impact culture?
Culture is one of the most vital yet most difficult to measure dimensions in our business. Culture is best defined as the shared set of beliefs or principles and their corresponding behaviors held within an organization.
You can’t measure thinking, or observe it. The best we can observe is behaviors. Here’s how some work on this.
One is the cultural survey. We ask people what they are thinking, and we ask them how people behave around them. Many organizations develop their own questions, or they leverage something like Gallup’s 12 questions for engagement. A survey fits the reliable dimension. However, the validity is very low. Some of the best data perhaps comes from those that don’t even participate. Also, there is often a gap between what people say they do, and what they actually do. When people take the time to respond to a survey, they are often in the best of minds, not in the middle of a firefight when the behaviors matter most. So, it works, but we must be careful as the validity is low.
Another means is to focus on observing behaviors. This is one I prefer. It is mostly valid, because it is based on actual behaviors, not imagined or espoused ones. It loses some validity however as observing a behavior today is no guarantee that it will be the same behavior tomorrow. Where this approach really suffers is it’s reliability. Who does the observing makes a big difference. The conditions and environment in which we’re observing aren’t always consistent. And without a large sample size, it is more difficult to tell if the observed behavior is based on compliance or based on true thinking.
The point is, there is no one best way to measure culture. The reliability and validity challenges are significant. We should be very aware of the shortcomings of any methods we choose. The best strategy is to use many methods in concert together, and not be too beholden to the outputs of any one of them.
by Jamie Flinchbaugh on July 28, 2010 · 2 comments
Yesterday I wrote about how measurements are often in conflict between being valid indicators and reliable indicators in Valid or reliable – take your pick. How can we possibly break this tension so there is no tradeoff?
One method, staying within the domain of measurement, is a stronger use of ratios. Many of the reliability failures of measures are because other factors affect the outcome of the metric. If I’m measuring costs for example, sales going up or down may impact what the costs have to be. If I measure defects, the volume of work can increase the number even if my process is improved.
It sounds simple, yet too uncommon, to measure our goals as ratios. Don’t measure costs in dollars; instead measure it as a ratio but whatever other factor most directly impacts the outcome. Overall costs should be measured as a ratio against sales.
Avoid absolute measures when setting metrics as goals and experiments. Ratios are much more reliable. It doesn’t mean that this will solve everything that’s wrong with the reliability of measures. Remember, as Einstein said, “not everything that can be measured matters, and not everything that matters can be measured.”
by Jamie Flinchbaugh on July 27, 2010 · 4 comments
Last week we had an interesting conversation. It started as a discussion about projects, particularly how you make sure you projects are going in the right direction. Ideally, you should choose how you’re going to be measuring yourself before, during, and after the project. If you wait to the end to say “how do we determine if we were successful?” we most certainly design the criteria in a way that helps us look successful. For this reason, and others, we should determine that success criteria in advance.
However, what makes for good criteria in messy problem statements? I’m talking about things such as a behavioral shift or knowledge and skill building. These are not easy things to measure and evaluate.
I am often critical of companies doing what is easy, instead of what is right. Let’s explore that further.
There is often a trade-off when determining metrics between designing something that is reliable as a measure versus something that is highly valid. As an example, if you are rolling out some new training for employees, you could test them at the end of the class to see if they absorbed the information. This is a highly reliable test. You can get 100 percent participation, the test is inexpensive and therefore never compromised or cut, the comparison from one class to the other is consistent. It is a very reliable way to accomplish the task.
However, it is not very valid. Who cares if they remember the information IN the class? What I care about is what happens after that, and I care about their ability to apply it. It is much more valid to observe the person in their environment, ideally over multiple time periods, to see how they have integrated not just the information but the skill into their work. That is the most valid way to test the outcome of the class.
But this is not perfect. This kind of test is not as comparable, because the observations are not consistent, might be done by different people, and is certainly done under different conditions. It is also very expensive to spend that time just observing people’s time, so it is subject to shortcuts and being cut from the process entirely.
This is the tradeoff. This is not easy. To find a measure that is highly reliable but also highly valid is a challenge. Don’t just do what’s easy. Think about what is important to you about your measurement and then design the appropriate solution.
by Jamie Flinchbaugh on July 22, 2010 · 1 comment
My latest article, Too Many Problems, articulates that I see problem solving in organizations as much more than problem solving skills. Many times people roll out new problem solving skills thinking that is enough. But beyond that, you also need systems and infrastructure to support those skills, and the right culture and behaviors to enable them. Let me know your thoughts.
I want to thank Manufacturing Engineering for publishing this article, as they have been long-time supports of my work.
by Jamie Flinchbaugh on July 19, 2010 · 3 comments
Photo credit: AP
George Steinbrenner passed away last week of a heart attack at the age of 80. I’m a die hard Red Sox fan, so it was always hard to watch a man of Steinbrenner’s caliber beat you. But George was a winner, and that should be celebrated. As I look at what I can learn from George, here are a couple of things I take away.
Excellence is excellence.
When someone is truly great at what they do, and produce results, it is hard to knock it. Actually it is pretty easy, because many people do, but that doesn’t mean they should. But George was an excellent owner – the Yankees were great before he took over, but he certainly took the team to another level.
There are many paths to excellence.
Do I want to be like George Steinbrenner? No, I don’t. But that just means I choose a different path to lead, to engage, to execute. My path is different. But that doesn’t make my path the right path. There are many paths to excellence. Some may suit you and some may not. If I played tennis, I would aspire more to a Pete Sampras path of quiet disciplined hard-work than a John McEnroe natural talent that’s a bit out of control – but both paths led to excellence. If I were in the news industry, I would prefer the studious and centered Tim Russert over the loud and opinionated Bill O’Reilly. The point – George may not have follow the path you aspire to, but it is a path that worked for him. Focus on your path.
Excellence is a relentless pursuit.
So many people wonder why people who have achieved a great deal keep going – why not just retire and play golf? Because excellence is a relentless pursuit. It’s who you are. You focus on the next challenge, the next goal, the next milestone. When the Yankees would win the World Series, most of the organization was busy planning the next parade. George Steinbrenner was working on plans for the next season, and the next championship. Excellence is a relentless pursuit.
by Jamie Flinchbaugh on July 14, 2010 · 3 comments
A lot is written and taught about developing SMART goals. I wrote about the topic earlier this year when everyone was developing their annual goals in the post Forget the New Year’s Resolutions.
There are mistakes in developing goals that I find far too common. Let’s call them DUMB goals. It’s not that the people are dumb, just the goal. Here’s what DUMB goals stands for.
D is for Distracting
There is only so much we should be focused on at one time. It is easy to write more and more goals on top of other goals; there are things that would be nice, there are things that would make life easier. But there are also things that absolutely must get done. Don’t write goals that help you lose focus and distract you from the truly important priorities.
U is for Underwhelming
Don’t write goals that don’t impress or challenge. If you know exactly how the goal will be a achieved without any additional effort or thought, then it’s not much of a challenge. It doesn’t require focus and effort if it’s that easy. If goals are underwhelming, they will fail to inspire you, even though it’s your goal. You will lose interest. And even if you achieve them, it is not because of some great effort. Goals should stretch, push, and focus you. Don’t write underwhelming goals.
M is for Mundane
If a goal is mundane, will you get up on Monday morning ready to tackle it? I doubt it. It will be very hard to get continuous progress on the goals if they are boring or fail to excite you. Much of the time this comes down to what we pick. But even if we pick inherently boring goals, we must turn them into something exciting and visionary. If your goal is “finally clean up my messy office” then imagine how many times you will procrastinate on that one. Turn that into “establish a world-class office designed for high productivity.” Same goal – much more exciting.
B is for Bureaucratic
Don’t write bureaucratic goals – those that look impressive but just generate work for people. “Build a multi-dimensional productivity standard and establish a review meeting.” You may have to do that same work, but that’s not the goal. That’s just building a bureaucracy to support the real goal, which is probably “improve productivity by 30 percent.”
It’s easy to write DUMB goals because it’s often easy to get buy-in for those goals. Goals should inspire. Goals should challenge. Goals should spur the imagination. Goals should create tension.
by Jamie Flinchbaugh on July 12, 2010 · 3 comments
Aesop’s Fables present timeless lessons. As my mind thinks, I related these back to organizational lessons and to lean transformation, as I wrote about The Mice in Council before. One of the most famous phrases, even if people don’t really know the story, is The Goose That Laid the Golden Eggs. Here’s the story:
A man and his wife had the good fortune to possess a Goose which laid a Golden Egg every day. Lucky though they were, they soon began to think they were not getting rich fast enough, and, imagining the bird must be made of gold inside, they decided to kill it in order to secure the whole store of precious metal at once. But when they cut it open they found it was just like any other goose. Thus, they neither got rich all at once, as they had hoped, nor enjoyed any longer the daily addition to their wife. Much wants more and loses all.
Of course, the primary lesson is one about greed. But I think there are a couple of other applications of this story.
Lesson 1: Just because something is working for you, doesn’t mean that more, more, more will work better. This is common when it comes to things such as kaizen events. “Hey, that was a great kaizen event that saved us $100,000. Let’s do 5 more but I want $150,000 for each of them next time.” That’s not always how it works. The opportunities themselves dictate the results. It’s not as simple as doing more. And if you over-rely on one method or tool, ultimately your lean journey will fail because you can’t support the events with the right genuine everyday behaviors.
Lesson 2: Understand why you are getting what you are getting. It is important to understand cause and effect. It is easy to just assume that the inside of the goose is golden. But if you don’t understand why you are getting golden eggs, you are more likely to make bad decisions than good ones. A lean organization is fundamentally a learning organization, but not learning information, learning cause and effect.
What is your favorite Aesop fable?
by Jamie Flinchbaugh on July 10, 2010 · 1 comment
by Jamie Flinchbaugh on July 8, 2010
Today I participated in Lehigh University’s Global Village program run by the Iacocca Institute. It brings together well over 100 students, many of whom are in their twenties, for a 6 week learning experience every summer from every corner of the globe – Russia, China, Israel, France, Brazil – pick a country and it is more likely to be represented than not.
I was met and interviewed by participants from Nigeria and Georgia, who then developed a thoughtful introduction for me. I spoke for just 10 minutes on the topic of building good partnerships, whether for a startup, a non-profit, or even an initiative within a company. I talked a bit about the why, what, and how. Then myself and 4 other executives each went to different rooms and the students were able to get two 90 minute sessions with each of us, with approximately 20 students in a session. We talked in greater depth about the topic but also anything else on their mind.
This was a fun day as they had thoughtful and engaging questions. I hope to return next year.
Jamie Flinchbaugh helps individuals and companies execute to their ideal state. 
