Doing the Wrong Things Right (part 2), or: Doing and Measuring the RIGHT things Right!

Photo: mrwilleeumm (Flickr)

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.

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