“Measurement done right can transform your organization,” writes Dr. Dean Spitzer in Transforming Performance Measurement (AMACOM, 2007). “It is my contention that there are certain performance measures and ways of measuring that can have a transformational impact on the way people in organizations view their work, their products, and their customers.”

The balanced scorecard is the most obvious example of a new way of measuring that can transform the organizations that use it. Pre-scorecard, leadership teams typically scrutinized financial performance every time they met and anything else, like quality and customer and employee satisfaction, when a big problem occurred or someone presented survey results. The balanced scorecard elevated performance in these areas to the level of financial performance by giving them equal status on the scorecard. Leaders started reviewing performance on all of these key areas during their meetings. They revised their bonus plans to include performance on non-financial measures. They communicated progress on scorecard measures throughout their organizations.

For many, the new measurement system transformed their organizations.

Spitzer believes that identifying cross-functional or “integrating measures” can have a similar impact. Measuring customer profitability rather than just sales revenue can change how people view customers and can involve many department including finance, marketing, purchasing, manufacturing, and customer service in the process of improving it. On-time delivery can have an integrative impact because of the many functions that contribute to it.

In a presentation on measurement, Spitzer noted that “transformation measurement requires looking beyond what we are currently measuring, making new connections, and crossing functional silos.” He lists several emergent and transformational measures in his book including customer delight, customer loyalty, customer experience, customer engagement, Voice of the Customer, customer profitability, customer lifetime value, knowledge stock and flow, learning, organizational agility, strategic readiness of intangibles, project scheduling, collaboration, reputation, employee engagement, learning effectiveness, information orientation, information proficiency, innovation climate, partner relationships, organizational trust, social performance, corporate social responsibility, sustainability, organizational health, executive intelligence, and service quality.

The list can stimulate your thinking about systemic measures that cross many, if not all, functions. It’s also interesting that the list includes many measures you will find in the scorecards and results of Baldrige Award recipients.

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