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NOTE:
On October 18, 2001, William A. Schiemann and William S. Cogdill were
speakers at an AMA Executive Member Breakfast Briefing held at the AMA
Chicago Center. This article is based on their presentation. Reports on
other Executive Breakfast Briefings will appear in future editions of
MWorld. Dates and subjects of the Spring Executive Member Breakfast Briefings
will be announced soon
Some organizations continue to drive up results in both good and bad times.
National studies by the Metrus Group, a consulting firm specializing in
strategic performance measurement, indicate that market leaders with a
disciplined approach to results measurement produce almost twice the ROI
as other organizations
How do these Measurement-Managed Organizations (MMO’s) continue to outdo
less-disciplined rivals?
There are five main pillars that distinguish MMO’s:
- Focus
- Alignment
- Accountability
- Learning
- Foresight
It all begins with strategic focus and agreement among an organization’s
top managers. When leaders clearly understand key product and market priorities
over the strategic timeframe, alignment down through the organization becomes
easier to achieve. Strategy can then move from the mountaintop to the marketplace
Here are how MMO’s operate:
- They are disciplined enterprises. They are outcome
focused and religious about establishing norms, standards, and related
measures to ensure that performance targets are clear and committed
to, and that systems' noise and task interference are minimized
- Accountability cannot be achieved by fiat, even when
performance standards are crystal clear. Employees must assume an ownership
stake in outcomes. Such "ownership thinking" goes beyond the usual empowerment
bromides to include education in the nuts and bolts of the organization’s
finances, along with the role each department, unit, and team plays
in the financial well being of the enterprise
- Learning is not a metaphysical concept. The focus
is on both embedding skills--especially those related to problem solving
and decision making--that help organizations become faster and more
agile, and on capturing the learning. This way, the decision-making
wheel is not reinvented every time a tough choice is confronted
In a world of discontinuity and change, looking out beyond the immediate
horizon to identify looming threats and opportunities becomes a big imperative.
Executives in MMO’s know that much of the future lies within the
playing field of their organizations. They have learned to establish links
between "upstream" and "downstream" indicators as a springboard to the future.
For example, there is a decisive relationship between employee satisfaction,
customer satisfaction and loyalty, and financial results. By carefully analyzing
the nexus among all three, MMO’s are positioned to anticipate bottom-line
results and take action long before the quarterly numbers are a fait
accompli
Here is the real secret behind MMO’s continuing ability to hit strategic
targets: By embedding a balanced set of strategic measures into how an organization
is run and operated, MMOs maintain a clear line of sight from top to bottom.
They have a collective awareness of strategic goals and responsibilities,
and they can navigate through boom and bust cycles by anticipating customer
needs and then nimbly adjusting their supply capabilities to meet them
Managing in today’s environment poses unprecedented challenges and risks.
There are also considerable rewards. Increasingly, the winners will be those
organizations that have become adept at using performance measurement to
ensure that they are both well-directed and well run
Cogdill can be reached at Wcodgill@metrus.com
Schiemann can be reached at Wschiemann@metrus.com
William S. Cogdill is vice president, new business development, and William
A. Schiemann is chairman and CEO of Metrus Group, a Somerville, NJ consulting
firm specializing in strategic performance measurement, customer and employee
assessment, and organization change. Visit www.metrus.com
for more information.
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