Much has been written about the numbers and criteria that allow monitoring the performance of processes in a company. The management literature has painstakingly explored ways to quantify what we do and what we achieve, to help us monitor the health of our businesses.
Let us take as a paradigmatic example the North American statistician W. Edwards Deming and his now famous “PDCA cycle” for its acronym in English (Plan, Do, Check, Act) or “PHVA” in Spanish (Plan, Do, Verify, Act), which proposed to systematically measure and analyze selected variables of the manufacturing activity, as a prerequisite for their improvement.
The method dates back to the 1940s and is believed to be responsible for Japan's industrial take-off in the years following World War II. Interestingly, in Deming's native country, big business ignored him. It took them three more decades to wake up from the nightmare that the Japanese gradually took over their market, thanks to the superior manufacturing quality they achieved through the statistical control of their processes.
From then on, this trend became global in scope and measurement became a routine part of any management system worth its salt. The ISO 9000 standards were no exception and in its latest version (2015), monitoring through indicators became a requirement for all the organization's processes. There are no more excuses and the service organizations, which today are the vast majority in the world, also fell in the raid.
Is it a simple bureaucratic requirement? On the contrary, the selection, design and monitoring of performance indicators is the engine of continuous improvement that is sought in a quality management system. As they say, what is not measured cannot be managed.
But there are other reasons why this happens and I haven't seen them explained in any management text. Maybe it's time to do it.
And the first thing I can say about it is that when the mind is not focused, it wanders.
In our personal life it is healthy to let our minds wander from time to time to “unplug” and rest from the daily hustle and bustle. But this should not become our "default mode" of action - much less when it comes to running a business.
In companies, planning and procedures guide us with reasonable security to move towards the objectives. But is this enough?
Remember that the main instrument we use to manage (a company or our own life) is the mind. The rest are accessories. And the mind follows its own operating rules that must be respected if we are to achieve good results.
One of those rules is focus. What does not enter our field of conscious attention is left to our instinctual impulses and subconscious conditioning. In other words, it is beyond our voluntary control. We can hardly achieve the goals so longed for along that path.
But - as you have seen so many times in your life - continually maintaining focus is no easy task. Most of us are easily dispersed when a new object of interest enters our very limited and volatile field of attention. And wham, goodbye focus.
That is why performance indicators are necessary.
The numbers or quantifiable criteria that we define to evaluate to what extent we are (or not) approaching the objective, constitute the best support to avoid dangerous distractions. They keep purposes within our visual field and allow us to take immediate action to correct course when necessary.
But there is more.
Observing how the indicators vary based on what we do gives us the seductive feeling that we are in control. The helm of the ship is in our hands. We perceive that it responds to our decisions and that we can head where we want, with the certainty that we can arrive safely and make the most appropriate decisions when necessary, because we have up-to-date and accurate information.
Performance Indicators - Reflection
How different this feeling is from what happens to us when things go wrong and nobody warns us! Those instances in which we hit the air fighting an invisible enemy. When each alternative solution is more expensive than the previous one!
The feeling of power that a dashboard gives us by meekly reflecting each of our maneuvers motivates us. Fire the powerful force hidden deep within our instincts that fuels our energy to continue towards the goal. We are inundated with dopamine, the "pleasure drug" that our brains make. We don't even get tired anymore.
I admit it: I am addicted to that drug and I invite you to try it.
Is there something more important that you could aspire to as a manager of a company? This is the true significance of performance indicators and the reason why at Calidad Posible we insist on designing them with the utmost care and on continually monitoring them, supported by graphics or other visual signals whenever feasible. Because without them, no management system is complete and no entrepreneur can be truly happy.
And one last thought. There are so many factors beyond our control in the business world! Why resign ourselves to also losing control of what does depend on us? Think about it.
