Customer Reviews

Transforming Performance Measurement: Rethinking the Way We Measure and Drive Organizational Success

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DEAN SPITZER has produced a ground-breaking book that shatters long-held, deeply entrenched conceptualizations of measurement that have resulted in measurement dysfunction. Moving beyond classical measurement theory and the focus on technical measures, Dean challenges all who create, track, use and are affected by performance measures to move away from measurement dysfunction characterized by:
1. Excessive focus on rewards
2. Fear
3. Measuring the wrong things
4. Measuring `looking good,' rather than `being good'
5. Measuring too much
6. Sub-optimization (measuring in functional silos)
7. Cheating

His cogent, compelling, specific remedies for transforming traditional performance measurement are to focus instead on:
1. Context: Continuously improve how measurement is experienced. [We rarely think about the "measurement experience" in organizations!]
2. Focus: Focus on measuring the right things. Focus on the `critical few' transformational measures, rather than the `trivial many' routine ones.
3. Integration: Use measurement frameworks and cross-functional measures to break down barriers and align the organization.
4. Interactivity: Performance measurement is just a bunch of `metrics' if it isn't the basis for dialogue. Dialogue around measurement makes it come alive, makes it meaningful, and promotes organizational learning.

Dr. Spitzer's thoughtful book is destined to be a classic due to its focus on the human aspects of performance measurement. Kudos and my gratitude to him for producing this practical guide.

Malcolm J. Conway
IBM Global Business Services

Consider the following observations:

"Cherish those who seek the truth but beware of those who find it." - Voltaire

"Insanity: doing the same thing over and over again and expecting different results." - Albert Einstein

"There is surely nothing quite so useless as doing with great efficiency what should not be done at all." - Peter Drucker

In this remarkable volume, Dean Spitzer urges his reader to re-think how to measure and drive organizational success, whatever the size and nature of the give organization may be. He offers a number of performance measures and ways of measures that can have a "transformational impact" on the way people in organizations view the work, their products, their associates, and their customers. He asks his reader to begin to view measurement itself "through a new lens" when correlating the material in this book with her or his own organization. "Perhaps the most surprising truth covered in this book is that the `context of measurement' [i.e. `an optimal environment for its effective use'] will largely determine its effectiveness."

At this point, it should be noted that Spitzer offers two significant reassurances in the Introduction: transformational measurement doesn't require a major change in a business structure or systems, "but only in how you think about measuring your organization; moreover, "on those occasions when measurement is used for the purpose of improvement rather than to make judgments or place blame, and when it is focused on the right measures, its true power is revealed."

After an especially informative Introduction, Spitzer carefully organizes his material within and 13 chapters as he explains why transformational measurement is so powerful, what happens when measurement "goes bad, why it does so, the beginning of the transformation process, how to create a positive context of measurement, on what to focus when measuring, how to integrate measurement, the nature and extent of interactivity of measurement, the leadership required by effective measurement, what can be learned about and from measurement, what the uses and abuses of measurement technology are, how to achieve and then sustain "performance measurement maturity," and then in Chapter 13 for purposes of review, what transformational measures are and aren't as well as what they offer in terms of their capabilities and potential benefits.

Then in his final chapter, after having established a multi-dimensional frame-of-reference (i.e. a proper "context") for his own core concepts, Spitzer examines 34 different transformational measurement "action plans.
I strongly recommend that this material, in Chapter 14, be reviewed at least every 3-6 months because the needs and interests of a given organization, as well as the perils and opportunities within its competitive marketplace, are certain to change and thus modifications of its own "game plan" must be made in response to those changes.

I began this brief commentary with three quotations: Voltaire urges all of us to seek the truth but to be skeptical of absolutes, given the fact that in today's world, change continues to be the only constant; Einstein's insight supports Spitzer's assertion that each "context of measurement" be viewed through a "new lens"; and Drucker focuses our attention on determining - and then committing our resources - only to what is most important.

Spitzer would be among the first to insist that only a fool would attempt to apply all of the core concepts, basis principles, strategies, and tactics he discusses. It remains for each reader to absorb and digest this material first, then be informed and guided by it when formulating and then implementing a "game plan" for her or his own organization. Whatever the structure and details of that plan are, it must respond to four questions:

1. What is most important to our success?

2. What specifically must be done to achieve that success?

3. How can we accurately and consistently measure our performance - both as individuals and as an organization -when seeking that objective?

4. In process, how can we take full advantage of every learning opportunity and then apply what we have learned in a timely and effective manner?

Congratulations to Dean Spitzer on what I consider to be a brilliant achievement.

Dean Spitzer could have simply written a book to critically examine the traditional, ineffective use of measurement so pervasive today. Or, he could have laid out some of his thoughts on what perspectives and actions would constitute a truly transformational approach to performance measurement. Or, he might have regaled us with a proliferation of examples of both traditional and transformational measurement. However, he has skillfully woven together all of these elements into a compelling case that not only stands to transform performance measurement, but can stand as a valid, universal approach to management and leadership. And, not only that, but he has detailed at least 34 transitional measurement "maps" to help get a running start.

As directly as he suggests the reader examine their own measurement system, Dr. Spitzer "takes on" established measurement practices, and explains why - from sociological and psychological as well as procedural perspectives - they are not working. At the same time, he deftly paints a landscape of hope and encouragement, detailing the transformational performance measurement approach.

Dean's new book should be on your shelf beside those from which he significantly quotes: Senge, Deming, Argyris, Drucker, et al.

Three cheers for Dr. Dean Spitzer who unmasks the holy grail of measurements. You will truly have a unique book when you get your hands on Transforming Performance Measurement. The author does an exceptional job of root cause analysis to make the people side of business success work - and work well. In my mind, he clearly distinguishes between the "letter" and the "spirit" of performance measurement by driving the question of, "What results and behavior do you truly want?" He then leads the reader to understand that measurement is about perception, understanding and insight, not about numbers - in essence, creating an optimal environment for high performance. But understanding is not enough, which brings me to the real gold of this publication - Dr. Spitzer provides the guidance on how to make performance measurement 'come alive' within organizations, rather than just using it for monitoring, justifying, and reporting. Under the status quo, people will continue to be 'victims', rather than 'beneficiaries' unless businesses take informed action on new insights - driven by the transformation of their performance measurements. This book is THE foundation for your organization to make just such a radical change. (Jeff Mersereau, Enablement Leader for IBM Software Group)

Transforming Business Measurement provides a sound methodology and guide to measuring the most elusive (and thus valuable) of all strategic metrics: an organization's transformation.

Companies undergoing turnaround, M&A or radical reinvention processes will find a formidable tool in Spitzer's book.

The book also provides a step-by-step approach to establishing truly strategic, functional and effective measurement systems by measuring critical value creation factors and aligning business models, organization and structure.

Chapters 8 to 14 provide a step-by-step methodology and tools to set up (or straighten up) an organization's measurement system.

Dean Spitzer's book, "Transforming Performance Measurement" is one of the best books I have read on developing effective metrics. It is used at the Cardiff Business School's Lean Enterprise Research Center in their lean curriculum. Dean's points out that value creation is one of the most important things an organization can do, yet few organizations reliably measure it. He emphasizes that if you measure what everyone else is measuring you are well on the way to commoditization of your business.

Dean references four key pillars of measurement:
Context - they way measures get used influence behaviors. If an organization uses measures to inspect, control, report or manipulate it will produce a different set of behaviors than an organization that uses metrics to provide feedback, learn and improve. Both perspectives can drive improvement...but people will go about the business of improvement in very different ways. Dr. W. Edwards Deming emphasized the importance of eliminating fear from the workplace. The latter persepctive is more likely to move in this direction.

Focus - Since people will perform according to the measures it is important to measure the right thing, rather than the easy thing to measure. If the organization does not clearly understand its value engine, there is a tendency for the measurement system to be loose rather than crisp.

Integration - is the third pillar. Organizations try to do this using policy deployment and other tools. But the system breaks down when companies focus primarily on functional department performance rather than cross-functional. Departments inside an organization often drift toward an activity focus, because it is easier to count. While there is an appearance of integration in the end it looks more like a series of silo's each with their own spin on what is important.

Interactivity - is the fourth pillar. This view is missed in most measurement books. It emphasizes the `people' element. An open discussion of measurement and desire to learn captures very much the essence of `why we measure.' Organizations looking to transform will use their measurement system to actively foster shared learning and for people to gain meaningful insights.

This book is very comprehensive. It does a good job of covering the technical side of measurement. But most importantly it focuses on how we use the measures.

Everyone interested in practical measurement applications needs to read Dean R. Spitzer's 2007 book, Transforming performance measurement: Rethinking the way we measure and drive organizational success (New York, AMACOM). Spitzer describes how measurement, properly understood and implemented, can transform organizational performance by empowering and motivating individuals. Measurement understood in this way moves beyond quick fixes and fads to sustainable processes based on a measurement infrastructure that coordinates decisions and actions uniformly throughout the organization.

Measurement leadership, Spitzer says, is essential. He advocates, and many organizations have instituted, the C-suite position of Chief Measurement Officer (Chapter 9). This person is responsible for instituting and managing the four keys to transformational performance measurement (Chapters 5-8):
*** Context sets the tone by presenting the purpose of measurement as either negative (to inspect, control, report, manipulate) or positive (to give feedback, learn, improve).
*** Focus concentrates attention on what's important, aligning measures with the mission, strategy, and with what needs to be managed, relative to the opportunities, capacities, and skills at hand.
*** Integration addresses the flow of measured information throughout the organization so that the covariations of different measures can be observed relative to the overall value created.
*** Interactivity speaks to the inherently social nature of the purposes of measurement, so that it embodies an alignment with the business model, strategy, and operational imperatives.
Spitzer takes a developmental approach to measurement improvement, providing a Measurement Maturity Assessment in Chapter 12, and also speaking to the issues of the "living company" raised by Arie de Geus' classic book of that title. Plainly, the transformative potential of performance measurement is dependent on the maturational complexity of the context in which it is implemented.

Spitzer clearly outlines the ways in which each of the four keys and measurement leadership play into or hinder transformation and maturation. He also provides practical action plans and detailed guidelines, stresses the essential need for an experimental attitude toward evaluating change, speaks directly to the difficulty of measuring intangible assets like partnership, trust, skills, etc., and shows appreciation for the value of qualitative data.

Transforming Performance Measurement is not an academic treatise, though all sources are documented, with the endnotes and bibliography running to 25 pages. It was written for executives, managers, and entrepreneurs who need practical advice expressed in direct, simple terms. Further, the book does not include any awareness of the technical capacities of measurement as these have been realized in numerous commercial applications in high stakes and licensure/certification testing over the last 50 years (Bezruczko, 2005; Applying the Rasch Model: Fundamental Measurement in the Human Sciences; Constructing Measures: An Item Response Modeling Approach). This can hardly be counted as a major criticism, since no books of this kind have yet to date been able to incorporate the often highly technical and mathematical presentations of advanced psychometrics, despite the truly significant advantages of doing so.

But leadership of the kind described by Spitzer is needed not just to make measurement contextualized, focused, integrated, and interactive--and, so, productive at new levels of effectiveness--but to apply systematically the technical, financial, and social resources needed to realize the rich potentials he describes for the transformation of organizations and empowerment of individuals. Spitzer's program surpasses the usual focus on centralized statistical analyses and reports to demand the organization-wide dissemination of calibrated instruments that measure in common metrics. The flexibility, convenience, and scientific rigor of instruments calibrated to measure in units that really add up fit the bill exactly. Here's to putting tools that work in the hands of those who know what to do with them!

References

Bezruczko, N. (Ed.). (2005). Rasch measurement in health sciences. Maple Grove, MN: JAM Press.

Bond, T., & Fox, C. (2007). Applying the Rasch model: Fundamental measurement in the human sciences, 2d edition. Mahwah, New Jersey: Lawrence Erlbaum Associates.

Wilson, M. (2005). Constructing measures: An item response modeling approach. Mahwah, New Jersey: Lawrence Erlbaum Associates.

Arguing persuasively that measurement as a positive accountability tool can transform an organization and its competitive performance level; consultant Spitzer presents the how-to's for socializing performance measurement into the fabric of an organization in a positive way. Showing how performance measurement can be used to direct behavior, focus attention, clarify expectations, enable accountability, increase alignment, motivate, etc. by utilization of four keys - Context, Focus, Integration, and Interactivity, the author makes a valid case for balance between the technical elements and the social aspects of performance measurement, be it reported by scorecard, dashboard or traffic signal.

Identifying `Context' as the most important of these four keys, Spitzer demonstrates how the purpose for which measurement is being used - to provide real understanding, helpful feedback, and to foster learning and improvement; or for justification, reporting, judgment, control, and reward - sets this `Context' and determines the employee reaction to and transformational benefits of any system, no matter its level of technical sophistication. The theme of this book speaks volumes about the importance of replacing fear with a supporting environment if you want to get transformational benefits from a performance measurement system. And, it is easy to agree with the author when he says, "When performance measurement is done the way advocated in this book, the organization itself and the people within it will be impacted positively." If your performance management system is using measurement primarily as a reward and punishment tool, this book will be a valuable read.

I very much liked what Spitzer had to say in this book; unfortunately I did not very much like reading it. Distracting from the impact of such a powerful theme is the redundancy contained within the chapters and the extent to which the author bolsters his argument with quotes and references from others - the book contains more than 250 notes (more than one quote per page on average) and shows a bibliography of 220 books or articles. Written as a 100 page how-to manual on the development and management of a performance measurement system this should be a best seller.

Dennis DeWilde
The Performance Connection

I am writing this review to strongly encourage organizations to implement the tenets prescribed in this book. In my humble opinion, this is the definitive work on the social aspects of performance measurement. It provides guidelines on how to develop 'the right' measurements, get measurements accepted, and align measurements with organizational change 'for the people' rather than 'against the people'. This book addresses the key aspects of transformational performance measurement, and speaks to the benefits of organizations being able to predict with confidence what should be done to 'create optimal value'. It simplifies the entire measurements arena. Not only does the book show an organization how to achieve a better understanding on how strategy translates into outcomes and drivers of success, but how to find the best mix of measures to convey strategy, and then integrate the organization to execute that strategy. It is well-written and turns subject matter which is typically difficult and tedious to read into an enjoyable and comfortable learning experience. Hats off to Dean Spitzer for writing such a definitive and important work!!

One of the more inspirational books I've read, I couldn't put it down once I started to delve into it. An easy read because of the way it is written, it is written for conscientious managers and leaders who are keen to use measurements for the right reason and not just to tick boxes. It offers a clear framework of what, how and why to measure performance and what matters to the end user/customer. Really Dean Spitzer has managed to provide the business world with this must have book on how to change the way you measure performance.