Over the past 15 years, I’ve helped several organizations with continuous improvement initiatives at the strategic, executive level. There are a lot of themes that keep appearing and reappearing, so the purpose of this post is to call out just a few and provide some insights in how to deal with them!
These come up when you are engaged in strategic planning and when you are planning operations (to ensure that processes and procedures ultimately satisfy strategic goals), and are especially prominent when you’re trying to develop or use Key Performance Indicators (KPIs) and other metrics or analytics.
1) How do you measure innovation? Before you pick metrics, recognize that the answer to this question depends on how you articulate the strategic goals for your innovation outcomes. Do you want to:
- Keep up with changing technology?
- Develop a new product/technology?
- Lead your industry in developing best practices?
- Pioneer new business models?
- Improve quality of life for a particular group of people?
All of these will be measured in different ways! And it’s OK to not strategically innovate in one area or another… for example, you might not want to innovate your business model if technology development is your forte. Innovation is one of those things where you really don’t want to be everything to everyone… by design.
2) Do you distinguish between improving productivity and generating impact?
Improving quality (the ability to satisfy stated and implied needs) is good. Improving productivity (that is, what you can produce given the resources that you use) is also good. Reducing defects, reducing waste, and reducing variation (sometimes) are all very good things to do, and to report on.
But who really cares about any improvements at all unless they have impact? It’s always necessary to tie your KPIs, which are often measures of outcomes, to metrics or analytics that can tell the story about why a particular improvement was useful — in the short term, and (hopefully also) in the long term.
You also have to balance productivity and impact. For example, maybe you run an ultra-efficient 24/7 Help Desk. Your effectiveness is exemplary… when someone submits a request, it’s always satisfied within 8 hours. But you discover that no tickets come in between Friday at 5pm and Monday at 8am. So all that time you spend staffing that Help Desk on the weekend? It’s non-value-added time, and could be eliminated to improve your productivity… but won’t influence your impact at all.
We just worked on a project where we had to consciously had to think about how all the following interact… and you should too:
- Organizational Productivity: did your improvement help increase the capacity or capability for part of your organization? If so, then it could contribute to technical productivity or business productivity.
- Technical Productivity: did the improvement remove a technical barrier to getting work done, or make it faster or less error-prone?
- Business Productivity: did the improvement help you get the needs of the business satisfied faster or better?
- Business Impact: Did the improvements that yielded organizational productivity benefits, technical productivity benefits, or business productivity benefits make a difference at the strategic level? (This answers the “so what” question. So you improved your throughput by 83%… so what? Who really cares, and why does this matter to them? Long-term, why does this awesome thing you did really matter?)
- Educational/Workforce Development Impact: Were the lessons learned captured, fed back into the organization’s processes to close the loop on learning, or maybe even used to educate people who may become part of your workforce pipeline?
All of the categories above are interrelated. I don’t think you can have a comprehensive, innovation-focused analytics approach unless you address all of these.
3) Do you distinguish between participation and engagement?
Participation means you showed up. Engagement means you got involved, you stayed involved, your mission was advanced, or maybe you used this experience to help society. Too often, I see organizations that want to improve engagement, and all the metrics they select are really good at characterizing participation.
I’m writing a paper on this topic right now, but in the meantime (if you want to get a REALLY good sense of the difference between participation and engagement), read The Participatory Museum by Nina Simon. Yes, it is “about museums” — and yes, I know you’re in business or industry — and YES, this book really will provide you with amazing management insights. So read it!