Collaboration

Why Most Organizational Metrics Don't Change Behavior

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In my last blog post, I shared insights from Brightline research on how agility and collaboration drive strategy execution, particularly breaking through organizational silos and decentralizing decision-making. But we mustn't forget that in order for this to happen, it is vital to main customer-focused. That's the glue that holds everything together.

Noted author and former CEO/Founder of the VISA credit card association, Dee Hock often wrote about how you want to operate on the edge of chaos but with a binding element to add just enough order. To this end, he coined the term, "chaordic."

In a true agile and chaordic environment, the tie that binds everyone together is the customer.

But how do we ensure the organization is working toward the good of the customer as opposed to the good of their political status in the organization or their department, or, just as bad, their department's isolated goals? a fundamental set of guiding principles can definitely help. But when it comes to assessing progress and alignment and driving behavior, most companies institute metrics.

Therein lies the problem in most organizations: the metrics are all wrong.

There's a great article in Forbes by Steve Denning, author of "The Age of Agile" titled "Why Agile Often Fails: Metrics." He notes an epiphany that happened during a meeting among leaders of major organizations on the topic of metrics: None of the organizations represented had ever changed their behavior significantly as a result of their metrics!

That is an astounding revelation, but not surprising, and is consistent with what I've seen as well. Indeed, most metrics are put in place to confirm existing beliefs or validate an internal process, not drive behavior. As Denning puts it, they're an elaborate form of numeric public relations.

He cites Amazon as an example of an organization that has overcome this disorder by instituting "real" metrics that are relentlessly and unapologetically customer-focused, and that cross-functional teams can get behind.

At Amazon, he says, "metrics are established in advance of every activity and specify what actions are expected to happen in ways that can be measured in real-time.... Every activity is in effect a genuine scientific experiment focused on whether it is delivering the value to customers. No activity begins until those metrics are in place."

According to Denning, metrics in organizations generally operate at mutiple levels. The strongest, and the ones Amazon uses, are "impact metrics" which assess changes in customer behavior that the product or service is intended to elicit. He cites several examples, such as:

  • Timely availability

  • Delivery speed

  • Percentage of delivery issues

  • Absence of returns/complaints

  • Re-purchases or related purchases

  • Survey responses

  • Recommendations

  • etc.

Note that these are specific, measurable, and directly relate to customer behavior. General "outcome" metrics such as customer satisfaction, or even Net Promoter Score, according to Denning, are "outcome metrics" that are a bit too fuzzy and hard to measure, though they do indicate a positive correlation with actual impact.

In the article, Denning also cites ten steps Amazon takes to measure impact. I've summarized and paraphrased:

  1. They focus on customer value, not shareholder value. Shareholder value is the result, not the goal.

  2. There is a shared responsibility for customer focus. Everyone is expected to be obsessed with knowing about and enhancing the impact of what they do for the customer.

  3. Metrics are customer-focused. Real-time customer metrics are built into every aspect of the work, as opposed to metrics in firms with a financially oriented mindset.

  4. All metrics are built on a written narrative laying out the benefits the customers are getting. This must be reviewed and approved before the activity can begin.

  5. Activities report to the organization, NOT the unit. Unlike most big organizations, executives at Amazon aren’t accorded prestige or salary according to the size of their staffs or their budget.

  6. The organization, not the business units, budgets activities. Cross-functional teams are instituted, with end-to-end responsibilities to deliver value to customers.

  7. Work is done in small, integrated, autonomous, multidisciplinary teams working in short cycles.

  8. Budgeting is a subset of planning, not vice versa. Every activity is reviewed in terms of its value to customers. At Amazon, the reviews revolve around real-time customer-related metrics of individual activities, not about which unit gets how much money.

  9. Controlling spending vs. managing impacts. Real-time, transparent customer-related metrics drive action, not solely metrics tied to the control of spending.

  10. Human Resources helps set the culture. At Amazon, the compensation structure is tied to long-term value creation through large and small achievements, not budgeted level of outputs for their unit.

I highly recommend reading the full article for even more details.

In any case, by now, the message should be clear: Customer-focused metrics assessing the ongoing progress of self-led cross-functional teams that are empowered to produce value, will always triumph over the internal-facing, silo-driven, budget and unit-focused folly that exists in most organizations today.


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Jerry Manas is the bestselling author of The Resource Management and Capacity Planning Handbook, Napoleon on Project Management, and more. At PDWare, Jerry helps clients improve strategy execution through tools and processes that align people and work with organizational priorities. Connect with Jerry on Twitter and LinkedIn.


PDWare is a pioneer in resource planning software, offering intuitive resource planning tools to drive your work portfolio based on your people's capacity. PDWare believes that good strategy execution, portfolio management, and project delivery begins with a solid foundation of resource planning. PDWare is a proud sponsor of the Resource Planning Summit, the premier resource planning conference.

Study Reveals Agility and Collaboration Drive Strategy Execution

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Ongoing planning, active engagement, empowered teams, and heavy collaboration are not only key components of an agile mindset; they're paramount to achieving good strategy execution.

This an indelible truth that I was glad to see validated in a recent global executive study conducted by Harvard Business Review Analytic Services in association with the Brightline Initiative, as detailed in the resulting report, "Testing Organizational Boundaries to Improve Strategy Execution."

According to the study, only one-fifth of the 1,636 organizations in the study were able to achieve 80% or more of their strategic targets, and they were able to do it by breaking through organizational silos and encouraging more agile ways of working. Moreover, they were better able to adapt to market changes and new demands.

According to Brightline, the common habits among the top performers were as follows:

  • Decision-making is decentralized and occurs via cross-functional teams

  • Collaboration is encouraged and rewarded, with teams empowered to put strategic initiatives into action.

  • Executives are engaged and act as coaches, not just leaders

  • Development and delivery of strategic initiatives is a dynamic and continuous process, not something just visited annually or less often

One thing I've noticed over the years, and it seems evident in these findings as well: The best organizations operationalize these traits. It's ingrained in their culture, their training, and in their reward systems.

You can read and download the full report in the article hyperlink above.


JB Manas - website photo.jpg

Jerry Manas is the bestselling author of The Resource Management and Capacity Planning Handbook, Napoleon on Project Management, and more. At PDWare, Jerry helps clients improve strategy execution through tools and processes that align people and work with organizational priorities. Connect with Jerry on Twitter and LinkedIn.


PDWare is a pioneer in resource planning software, offering intuitive resource planning tools to drive your work portfolio based on your people's capacity. PDWare believes that good strategy execution, portfolio management, and project delivery begins with a solid foundation of resource planning. PDWare is a proud sponsor of the Resource Planning Summit, the premier resource planning conference.

Project Communication and Management - What's in Your Toolbox?

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In his recent article for Forbes, titled "Interpersonal And Interdepartmental Communication: How to Effectively Manage Team Projects," internet marketing consultant Pawel Kijko stressed the importance of communication on project success, both at the individual and interdepartmental levels.

While communication itself isn't a new topic, Kijko delves into specific points that speak to today's complex, digital environments, including strengthening interpersonal communication and addressing the information flow across disparate departments with disparate working cultures. 

One key to this, says Kijko, is choosing the right tools for the right job.

I couldn't agree more.

Task-driven collaboration is a different animal than high level project, portfolio, and resource planning and management, and each have their own set of unique needs.

Departments may use collaboration tools like Slack, and maybe even specialized work tracking software. It's how people work.

From an overall planning and management standpoint (I'm talking about organizational resource planning, portfolio management, and even project management), that's where it's beneficial to have a single, consolidated tool that allows for aligning the organization's projects and people with its strategies, goals, and priorities. This includes rolling up data to the program and strategy levels for a bird's-eye view of financials, status, risk, and feasibility.

It's how organizations plan and manage and gain business agility.

The two (collaboration and planning/management) aren't mutually exclusive, and both can benefit from their own specialized toolsets.  Of course, many PPM and resource planning tools also have task level project scheduling and time-tracking, but even that's not at the granular collaboration level of everyday details.

Besides, I've advised clients for years not to make their project schedules overly granular, but rather have it deliverable-focused, including milestones and key inter and intra-project dependencies, letting people collaborate on the details of the "how" using the tools of their choice. 

Indeed, collaboration tools can be a huge asset when used in combination with a good portfolio and resource management system, which itself provides the communication needed to keep everyone aligned at a higher level. So, what's in your toolbox?


JB Manas - website photo.jpg

Jerry Manas is the bestselling author of The Resource Management and Capacity Planning Handbook, Napoleon on Project Management, and more. At PDWare, Jerry helps clients improve strategy execution through tools and processes that align people and work with organizational priorities. Connect with Jerry on Twitter and LinkedIn