We Need to Change the Way We Measure in Organizations


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The ever-increasing pace of change today places new demands on leaders to manage successful teams and organizations. The success of tomorrow does not lie in forcing individuals to work more efficient in a predetermined workflow, but to find ways for teams to work together to solve complex challenges. To be able to understand and support this transformation, we need to change the way we think and act around measurements.

In the 1880s the management theory later known as Taylorism, or Scientific management, started to emerge. The main objective was to improve economic efficiency and labor productivity by systematically analyzing workflows. By breaking down the process into small parts and using time studies the process could be standardized. For the first time, a scientific approach was used in management and it revolutionized production efficiency.

Before this, producing a car was a craftwork of mechanics, building one at a time. Scientific management enabled the manufacturing process to become steady and efficient, where the cost of producing each part descended. Hence, the cost of producing cars during the early 20th century fell dramatically and enabled mass production.

Scientific management laid the basis for measurements that focused on time and cost. The results were reported to higher management for control and surveillance of the workers and the process.

This way of thinking and using measurements to be able to control, optimize and monitor has prevailed into the 21st century. It has become so central in management that it has influenced other areas such as product development and innovation processes.

The ever-increasing pace of change today places new demands on leaders to manage successful teams and organizations. The success of tomorrow does not lie in forcing individuals to work more efficient in a predetermined workflow, but to find ways for teams to work together to solve complex challenges.

As a leader you probably know this already – today, success is not just about breaking things down to the smallest components and making the different parts more efficient. Well, you don’t have to throw it all out of the window – in fact, some parts of Scientific management are still very useful. But when the rapid change requires organizations to be adaptable and have the ability to continuously take in new knowledge and convert into new market value, the team and how well they collaborate becomes central.

To be able to understand and support this transformation, we need measurements now as much as we needed measurements in the early 20th century to improve labor productivity to make the car affordable to the mass-market. But this time, organizations have other needs and therefore, the measurements must be different accordingly. Today, leaders must create conditions for teams to perform better, to adapt and to improve their ways of working in a systematical way.

Sometimes measurements exist for their on sake and not as a key enabler for systematic improvements. And most of the time, measurements are about reporting results to stakeholders outside the team and do not support proactive leadership and team collaboration. This is a few of many reasons why we require new ways of thinking around measurements – both around what we should measure and how.

Luckily, I spent more than 10 years of my life reflecting upon these challenges and I am happy to share my thoughts with you. In my coming articles I will discuss what and how we really should measure.

/Stefan Cedergren, Founder and CEO of Prindit

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