We have already reviewed five of the seven groups of causes listed in our initial publication. In this final publication we will analyze how the lack of measurement and indicators, along with the “non-pursuit” of quick wins, can influence the success of these processes.
Lack of Measurement and Indicators
“If we don’t know whether we are changing, then we are not doing it.”
A common mistake is to start a change or transformation process without clear indicators. With the intention of moving forward and doing so quickly, sometimes the expectation is that the change will be evident once we achieve it. But the lack of indicators can also reflect an absence of reflection about the need for change or the opportunity that transformation can bring—if we decided to change, what did we expect when we did it? What is the benefit? Likewise, the initial definition should include what the goal is, and what the indicators will be that will allow us to confirm that we are going in the right direction, or that will ultimately show us that we did not choose the right path.
In management, we identify two types of indicators: results indicators and performance indicators. The first serve to measure what we achieved (or not), there is no management over them since they are literally the result of our actions. They are associated with goals (financial, commercial, organizational climate, socioeconomic impact, etc.). Performance indicators allow us to measure the progress of actions that we believe will impact results or goals—these are the ones over which we control the progress of efforts.
The results indicators to be measured must be aligned with how the company generates value and how value has historically been measured; they must be simple and few—financial and commercial ones are typically expected for a transformation process.
Performance indicators should show adherence to the new practices required and the achievement of leading indicators of results—sometimes new indicators appear, but in general they are typical and expected. In each area, initiative, or team, there should be no more than three.
Leaders and those responsible must know, understand, request/measure, report, and analyze the progress of their indicators, and they must use them to make decisions and to give feedback to their teams in the process, in order to achieve the objectives. If they truly do this, teams move forward towards achieving them, and transformations improve their probability of success, as well as their speed in reaching it.
The “Non-Pursuit” of Quick Wins
In most modern organizations, the pressures for “fast” transformation processes are high. There is pressure to commit to short deadlines to achieve results, both from stock analysts if the companies are publicly traded, from financial institutions that lend the money and fear not recovering it, as well as from the owners themselves, because of the risk of not obtaining the expected returns. At the level of company employees, a transformation process also generates anxiety—they are the ones responsible for carrying it out, and failure can mean the loss of their jobs and income.
The transformation process begins with uncertainty and directs efforts towards the different/unknown. At first, a good diagnosis (accurate, simplified, clear, and credible) can smooth the start of the change process, but after a few weeks questions within the organizations about whether “we are achieving the objectives” will be inevitable.
A clear diagnosis generally facilitates the identification of what will change first—the elimination of inefficient areas or expenses, the change in ways of carrying out processes, the reduction or control of operational losses, among others, are objectives of “quick” achievements (“quick wins”) that must be explicit and monitored, to give credibility and oxygen to a process that leads to the achievement of transformation.
Without quick results, questioning about the “why” of the transformation persists, and efforts fail.