What You Measure Tells Everyone What You Think

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Flying blind doesn't take you far so every organization eventually devises a set of measurements whose aim is to check on health of the organization and serve as a basis for performance bonuses and corrective actions. Consequently the measurements you pick start to influence behaviour of employees and ultimately define the organization. At his talk at Agile Slovenia 2013, Stephen Parry observed that most of the organizations use functional measurements that don't really matter to end customers, while very few organizations prefer end-to-end measurements of company performance as experienced by its customers. There is a very human reason why companies end using functional measurements that don't really matter to end customers. First, influence of individual in any organization with more than a dozen people is limited, and, second, experience of customers is influenced by several factors beyond immediate control of the organization. It feels very frustrating to be evaluated on things beyond one's control and therefore organizations naturally drift towards measurements that are under it's immediate control. Namely, success of individuals and subgroups within an organization is mostly result of internal perception that is the more detached from outside world the bigger the organization. But success of an organization is entirely defined by capability of individuals and subgroups of the organization to cooperate and deliver value to the end customers. Striking the balance between the two is not an easy feat.