My suggestions were, in fact, already soundly debunked by global health professor and data visionary Hans Rosling in his simply amazing 2006 and 2007 TED talks, which I have just gotten around to discovering for myself. Hans Rosling’s presentations prove a “Guitar Hero-style experience” with data is not only possible but also highly beneficial. Hans Rosling turned global health and poverty data into graphically engaging, focused, insightful, compelling, even exciting stories. I am certain you will be captivated by both presentations and be as convincingly informed by them as I was. Here they are…

Hans Rosling 2006 TED Talk:

Hans Rosling 2007 TED Talk:

Photo: mrwilleeumm (Flickr)

Recently I blogged on how organizations all too often “do the wrong things right” (see part 1) due to misguided, fundamentally flawed traditional management techniques of rule enforcement and incentives. I also noted that Business Intelligence/Business Performance Management (BI/BPM) software is often misused by supporting misguided rule enforcement and incentives. In other words, many companies are unwittingly “measuring the wrong things right” to help “do the wrong things right”!

I have repeatedly pointed to Barry Schwartz’ related TED talk in past postings (here and also here) for good reason: I think any successful deployment of BI/BPM solutions must begin with full awareness of Barry Schwartz’ warning that rule enforcement and incentives will often lead workers to “stop being wise” — that is, unwittingly discourage workers from independently “doing the right thing” in a given work situation. I also believe organizations can and do unwittingly misuse BI/BPM solutions to help “do the wrong things right” by “measuring the wrong things right.” 

I cited a worker behavior example in my above-linked posts. Consider a much bigger, all too real example: CEOs have been compensated quite handsomely — even grotesquely – only to see the companies in their care later implode. Why? Because those CEOs were often heavily comped on one key measure, most notably increasing stock price. Unfortunately, many a CEO “earned” treasure troves of incentives for hitting that higher stock price, only to be found out later the CEO failed to do so in a sustainable, ethical or even legal manner. It’s as if the CEO stuck his or her hand over a glass thermometer, made the measured temperature go “up” and then proclaimed, “See? The room is warmer now! Where’s my bonus?!”

OK, so how can organizations “measure the right things right” and “do the right things right”? It all starts with the company’s mission statement.

Yes, that paragraph that is supposed to powerfully define the reason for the company’s very existence, but is more often than not the Rodney Dangerfield of corporate messages. It sure ”don’t get no respect”: too often the mission statement is an incoherent, self-aggrandizing, meaningless, even irrlevant mashup of buzzphrases…a just plain bad mission statement.

I got some insight on the other end of the spectrum — the benefits of a great mission statement – unexpectedly with the help of my longtime work friend Dan McCarthy, Vice President of Operations for Laminated Plastics in Billerica, Mass. Dan recently invited me to meet up and tour the company’s facility.

As soon as I walked through the front door, I noticed the company’s mission statement right there on the wall. Having read scores of truly bad mission statements, I am very happy to share Laminated Plastics’ mission statement and hold it up as a very pretty darn good one:

Laminated Plastics Company is committed to be recognized as the leader in the fabrication and distribution of plastics in the Northeast region of the United States.

In order to achieve and maintain this recognition, our primary responsibility must be to our customers.  We will consistently provide the highest quality products, unsurpassed customer service, and competitive pricing to each customer that we have the privilege of serving.

Additionally, Laminated Plastics Company realizes its responsibilities to those most dependent upon its existence:

To our employees, we will provide a challenging and supportive work environment which rewards each employee in proportion to their contribution to the company’s success.

To our vendors, we will work in partnership for our mutual benefit.

To our stockholders, we will provide an attractive return on investment.

To all who come in contact with our company, we will conduct ourselves fairly, honestly, and as a responsible member of our community.

I suggest it is plain to see how a well-defined mission statement like this one helps set up Laminated Plastics’ success by very clearly defining what “doing the right thing” means across a wide variety of interactions the company will have with customers, employees, vendors, stockholders, and “all who come in contact with our company” (well done — the mission statement addresses basically “everyone”). For example, the company’s primary commitment to customers, typically a vague, throwaway line in poor mission statements, is addressed quite specifically in terms of quality, customer service, and competitive pricing. Even better, by including such statements as “we will conduct ourselves fairly” in the mission statement, there is a clear implication of a level of latitude allowed to “do the right thing” that will run rings around misguided rule enforcement or incentives.

I also credit Laminated Plastics for taking the extra step of each employee signing their name to the mission statement, thus committing to it. Some might say such an exercise is just a gimmick, pithy or merely symbolic. Don’t you believe that for a minute: As proof, I encourage you to watch the recent TED talk by Dan Ariely on “predictably irrational behavior.” Dan Ariely discussed an experiment in which people were subtly encouraged to cheat on a test for which participants were financially rewarded for correct answers. Contrary to traditional economic theory, most people cheated “a little bit,” but did not increase their cheating even when financial rewards went up and the risk of getting caught was virtually nil.

This suggests people might have a “personal fudge factor,” as Dan Ariely put it, but they also “want to look at themselves in the mirror and feel good about themselves.” With that in mind, Ariely then asked a new group of experiment participants to try to recall the Ten Commandments before taking the test. Regardless whether a participant was religious or not religious at all, that group did not cheat at all. By simply asking participants to recall one of the earliest recorded codes of morality, even that “personal fudge factor” of cheating was gone!

In other words, it is very wise to appeal to a person’s sense of integrity and altruism in a personal manner, such as signing a well-defined company mission statement. Doing so will motivate that person to “do the right thing” far more effectively than unwisely relying on rule enforcement or incentives (by the way, another Dan Ariely experiment proves financial incentives are not a strong motivator of behavior).

A ”good mission statement” also readily identifies a spectrum of solid, sensible measures a BI/BPM solution can readily monitor. The customer portion of Laminated Plastics’ mission statement defines the effective measuring of product quality (i.e., analyzing levels of quality assurance inspection tests, customer returns, etc. over time); customer service (perhaps analyzing results of customer surveys or rates of repeat orders); competitive pricing (proactive analysis of company pricing versus industry averages). For employees, analyzing employee turnover logically flows from the mission statement, and so on. 

Bottom line, a well-defined mission statement not only helps the company do the right things right, but also measure the right things right. Not a bad combination.

Do you know of a company that does — and measures — the wrong things right? What is their mission statement? Please share it. I will hazard a guess the company is struggling one way or another and its mission statement has a high gobbledygook level. And in keeping with the glass half full attitude I’m trying to stick with around here, please share any winning mission statements you know of!

Further reading on mission statements:

IT consultant Bart Perkins wrote a nice article for Computerworld on what makes a great mission statement. An excellent “start here” point for crafting an authentic and relevant mission statement.

Seth Godin found a bad mission statement but “not even close” to the worst (some great links from readers)

Final food for thought: the Preamble to the Constitution of the United States is in fact a very effectively written mission statement.

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The phrase “doing the wrong things right” came up in in my phone interview with best selling business author Jeffrey Fox for an article available on this blog.  And if I recall our conversation correctly, someone really did do the ‘annoy the CEO for five hours on a plane’ tactic, thinking it would help their career. It didn’t.

I Googled “doing the wrong things right” and found a very interesting blog, The Effective CIO by Chuck Musciano, and a very relevant article Right or Wrong? Well or Poorly? (One quibble: for Chuck’s chart (see left) accompanying his blog post, it is the “doing the wrong things right” quadrant that should be red; doing the wrong things with relentless speed and efficiency is the worst of all possible worlds!)

From Chuck Musciano’s post:

Doing the wrong things right is often known as “paving cowpaths.”  Some awful business processes are so entrenched that they cannot be rooted out.  Discretion being the better part of valor, we choose to automate bad processes, throwing good technology at a bad system.

Hear, hear!  But how do such awful business processes come into being in the first place?  I suggest those ‘cowpaths to hell’ were paved with good but badly misguided intentions, using misguided information. 

I think the key cause to “doing the wrong things right” from a BI perspective is clearly traceable back to “measuring the wrong things right.” 

While browsing the plentiful BI blogs on the BEyeNetwork, I came across a recent posting by business perfomance management expert Craig Schiff.  I have read many of Craig’s insightful articles, but a recent blog posting of his led me to concern over “measuring the wrong things right.”  Specifically, Craig wrote:

The holy grail of business performance management (BPM) is to compensate people based on their achievement of corporate, departmental, and individual goals and objectives. While BPM is good at measuring progress against objectives, it is of little value if it doesn’t change people’s behavior, which in turn should help improve the bottom line. Incentive compensation based on what is being measured by the BPM system is a way to do that.

It is true that setting incentives will change employee behavior, but unfortunately not as often for the better as one might imagine.  I have major concerns with the concept of widespread, heavily incentive-driven compensation, based on the certain data measures tracked by a BPM/BI solution…

First, who decides what the “right” measure(s) are?  I just read a noteworthy article by Amy Domini, founder and CEO of Domini Social Investments, a mutual fund company emphasizing ethical investing.  Amy Domini argues quite convincingly that “[only] what’s published gets measured, and [only] what’s measured gets evaluated and improved.”  When certain select measures – typically financial performance and worker efficiency – are utilized to evaluate business performance, a whole host of other very important measures will go unmeasured…with unforseen detrimental changes in human behavior in the offing; aka, “doing the wrong things right.”

Domini elaborates in her article Digging into the Data in Ode Magazine, May 2009 (p.40; article not online, but other related articles are) that some companies are already proactively reporting not just what their results are (i.e., profit and loss) but also how they are doing it, sustainably, safely and ethically (further reading: Global Reporting Initiative).  Most companies do not do this, of course.  Meanwhile, for example, Japanese companies must report greenhouse gas emissions, but usually report “per unit” emissions, not emissions in the aggregate.  Sony, however, is voluntarily reporting this much more relevant statistic, believing (correctly, I think) this transparency will strengthen its public image.  Another compelling example: Some detective work by Domini’s team disclosed a disturbing increase in worker fatalities for some European cement manufacturers, which had, not coincidently, withheld this data for certain years. 

Now I will draw on my first blog entry on the need to apply business wisdom when using the tool of business intelligence, referencing Barry Schwartz’ inspiring TED Conference talk. Schwartz had high praise for hospital janitors who made wise (also subjective) decisions in deferring or redoing work tasks, in the best interests of patients and their familes. But a misguided hospital facilities supervisor might use BI to “measure the wrong things right” (on-time performance of janitorial tasks in the name of worker efficiency), and in so doing encourage a wrong change in behavior; namely encourage janitors to absolutely, positively complete all tasks as planned as fast as possible (through rule enforcement or incentives), without considering the adverse effects on patient care and compassion.  The result: doing the wrong things right. 

Now consider how the altruistic janitors’ work decisions Schwartz described might have changed for the (much) worse, as a result of being measured - even rewarded! - by how “well” you do the wrong things right! (And those janitors – probably the hospital’s best workers – who are unwilling to, in effect, act against the best interest of patient care, would no doubt eventually quit).

So how can organizations measure and do “the right things right”?  I got an idea on this recently from a business friend of mine, who does not yet even know that he and his company gave me the idea!  I will blog about this in “part 2″ next week – the link is right here!

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The good news is you don’t have to be brilliant to be wise. The bad news is that without wisdom, brilliance isn’t enough. It’s as likely to get you and other people into trouble as anything else. — Barry Schwartz

You can view Schwartz’s talk now (Thanks, WordPress!):

I reflected on Barry Schwartz’s fine presentation from a business intelligence perspective. Consider Barry Schwartz’s compelling example of janitors who modify or skip their usual tasks for the benefit of patients and their families. Now imagine a supervisor, relying only on the numbers from time and attendance reports, who might reprimand these janitors for not completing their work tasks in a timely manner (rule enforcement)! Similarly, consider a supervisor, again relying on reports, has the epiphany to offer a wage incentive for janitors to complete their tasks ahead of schedule.

In both cases, supposedly justified by business intelligence, rules or incentives might be enforced that unwittingly discourage janitors from performing their tasks with empathy and in the long run will have a detrimental impact on patient care…

A recent CIO magazine blog entry, (as found via this BeyeNETWORK posting) lamented an Accenture survey that reported 40% of business decisions are based on “gut.” Of those surveyed, just over half explained that their gut decisions relied on qualitative and subjective factors.

While some BI pundits might lament the existence of “gut” decisions, in fact, the ability to recognize when quantitative data must be tempered with qualitative and subjective factors is the sign of a wise decision maker.

If BI is used as the sole tool for making business decisions, then such misuse of BI can unwittingly run the risk of contributing to an organization’s bureaucracy instead of freeing the organization from it.

The hallmark of business intelligence is to enable managers and executives to make “informed business decisions.” It is still up to the manager or executive to make that “informed decision;” informed not only by the quantitative information provided by BI, but also with his or her years of knowledge of customers, employees, products, market conditions, and intangibles that can and should be part of that “informed decision,” a point made overwhelmingly clear by Barry Schwartz.

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