Business Needs To Take A Moneyball View On Performance

I recently finished reading Moneyball, the Michael Lewis bestseller and slightly above-average Hollywood movie. It struck me how great baseball minds could be so off in their focus on the right metrics to win baseball games. And by now you know the story — paying too much for high batting averages with insufficient focus where it counts —metrics that correlate with scoring runs, like on-base percentage. Not nearly as dramatic — but business is having its own “Moneyball” experience with way too much focus on traditional metrics like productivity and quality and not enough on customer experience and, most importantly, agility.

Agility is the ability to execute change without sacrificing customer experience, quality, and productivity and is “the” struggle for mature enterprises and what makes them most vulnerable to digital disruption. Enterprises routinely cite the incredible length of time to get almost any change made. I’ve worked at large companies and it’s just assumed that things move slowly, bureaucratically, and inefficiently. But why do so many just accept this? For one thing, poor agility undermines the value of other collected BPM metrics. Strong customer experience metrics are useless if you can’t respond to them in a timely manner, and so is enhanced productivity if it only results in producing out-of-date products or services faster.

My current focus is understanding agility metrics. And in short, I believe agility metrics applied to transformational projects, changes in scale, or more tactical modifications to product, service, or technology will improve the ability to make changes large and small, repetitively and continuously, without adversely affecting the ability to make future changes. Advancing technology for business process management (BPM) and analytics is allowing broader and deeper treatment of performance metrics in general. As a result, defining and using performance metrics is an emerging trend that offers significant opportunity for business process management.

We are soon to publish a value-stream-based BPM metric framework that augments traditional productivity and quality metrics with those focused on customer experience and agility. It will not get the attention of Bill James’ Baseball Abstract — but it may move us in the broader direction for an expanded view of performance. And after all, that was James’ main point — we need to focus metrics on what’s important and keep working at it. We will be providing insight on BPM performance management at our fall forum events for CIOs, enterprise architects, and application development and delivery leaders, where we will explore these keys, and many others, more closely.

Comments

Quality = customer experience

Excellent article and there is strong foundation to the message; however, the article does not clearly explain what it means by a company's myopic-focus on quality could lead to a negative customer experience. In my view, most quality elements are based on maximizing the customer's experience. Or at least, that's the way quality should be managed in today's global business environment.