Page 45 - Performance Leadership

Chapter | 3

MEASUREMENT DRIVES

BEHAVIOR

I recently gained a few pounds. “More Frank to love,” I tried to justify
to my wife. Her reply came almost immediately. “Yes, but the love per
pound decreases.”

Why Measure?

1
There are three objectives of measurement. First it is important to track
results for compliance and reporting reasons, as a means of control, and
to justify your actions to stakeholders. These stakeholders include regu-
lators and shareholders that have very specific reporting requirements.
Increasingly, organizations also justify their actions to society at large, with
what is often called a sustainability report. The need for increased trans-
parency (discussed in Chapter 1) largely drives advances in performance
management from this perspective. The second objective of measure-
ment is to enable strategic decision making and learning (as discussed in
Chapter 2), providing feedback from an operational to a strategic level,
to see the extent to which strategies are successful. The third objective of
measurement is to drive people’s behaviors, the focus of this chapter.
In parts of the organization, this is usually already well understood.
Most human resource departments use performance review systems
with specific quantitative performance indicators. Sales departments
have very direct experience with driving certain behaviors, using sales
targets on particular revenue and a certain mix of revenue, to make
sure salespeople do not sell only the products or services that are easy

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