We came across this article that took a very unorthodox position against the axiom “If you can’t measure it, you can’t manage it.” The “argument” (with a dose of ad hominem) states: “That’s BS on the face of it, because the vast majority of important things we manage at work aren’t measurable, from the quality of our new hires to the confidence we instill in a fledgling manager”. This was followed up by “The good news is that we manage these unmeasurables perfectly well without any need for yardsticks”. Had this been an article on a “clickbait” site, where an unorthodox position is often taken without support or forethought just to get the clicks, we could have just moved on. But this was Forbes.
We have put quotes around the term argument above because cogent arguments do not start with “That’s BS.” It also provides only two examples of unmeasurables: 1) “quality of our new hires” and 2) “confidence we instill in a fledgling manager” to convince readers that a majority has been demonstrated by the author. It is also incorrect to assume that most people “manage these unmeasurables perfectly well.” In fact, we posit most of us (with conscience) will have an extremely hard time making serious decisions (for example, promoting someone or cancelling a project) based on “unmeasurable” indicators.
Measurement of intangibles is hard to do. Even when it is done, such measurement would necessarily be a rough proxy of reality. There is no disagreement from us on this. None at all. However, to account for them would be vastly better than ignoring them completely because in the absence of measurements (even if they are fuzzy), fallacious rhetoric sneaks in and objectivity disappears. We go back to the Forbes article again to support this hypothesis: it uses the term “vast majority”,which can be easily replaced with a quantifiable term (e.g 80% of our managerial decisions).
In our previous blogs on the importance of performance measurement and Miller’s pyramid, lessons from medicine on assessment, and applying these lessons to development, we argued that measurement is critical. Measurement drives improvement in fields as diverse as magazine publishing to international development. Measurement becomes even more important when you consider that for most organizations, knowledge assets (such as the people who work in an organization) are becoming more valuable than physical assets. In such an environment, measuring the impact of intangibles is important. There are many creative ways to do so, including this take on measuring one such intangible - the impact of employees on a company's value by mimicking measures of performance of capital (by Felix Barber of the Boston Consulting Group).
In this blog we look specifically at measuring transparency. It is perhaps the most used yet most unmeasured intangible in today's corporate world.
There are transparency assessments for certain sectors such as the pharmaceutical industry as well as transparency/governance ratings for countries. However, transparency ratings or assessments of companies are relatively less prevalent, and when they do exist, they often focus on corporate governance (an Australian example) and not on transparency within the organization.
There are many ways to measure and encourage transparency within an organization:
Why not encourage end-to-end transparency by releasing all official documents that can be released ? Why not announce the percentage of stored documents that are not publicly available?
Why not have a completely open process for every major initiative in the organization? For example, why not share all strategy and position documents at every step of the way - creation, draft, review and finalization? The platform should not be an issue - Google Docs, for instance, easily allows documents to be shared with multiple people.
Why not make as many emails as possible public? Why not make salaries transparent? Glassdoor.com is a site that makes salaries of most organizations public by allowing the public to share salary data of their organization. Wouldn’t it be better for organizations to do so themselves?
Buffer, a web application that allows users to manage their social networks by providing a way to schedule posts to Twitter, Facebook and Linkedin, is proving that mainstreaming transparency processes is possible. The company also makes the salary of every single staff member publicly available on the Internet. Not satisfied with just doing that, every internal email sent between any 2 people on the team at Buffer has a certain list cc’ed that is accessible for everyone. Buffer was influenced by Stripe which does something similar. Almost all of Stripe’s email is public inside the company, and yet they do it in a way that avoids drowning people in email.
Once people are subscribed to the right lists, dealing with the large volume of email efficiently is the next step. We use a number of filters to ensure that the traffic gets sensibly handled and categorized. The vast majority of our email is automatically labeled, archived, and then skimmed occasionally. (source: email transparency)
Furthermore, Buffer extends its transparent attitude to day-to-day transactions. When asked for permission to use the Buffer material below, the CEO, Joel Gascoigne, replied within minutes all the way from Australia. Gascoigne has 44,000 followers and can still catch and respond to a tweet within minutes. Similarly, Craig Newmark, the founder of Craigslist, once responded to around 200,000 emails a year, demonstrating that senior managers can and should respond to every serious feedback message they receive.
Radical transparency can offer up some serious advantages and is even beginning to attract some Harvard Business Review folks, which is typically a sign that an initiative is starting to take root in the business community.
Radical transparency is perhaps at the end of the transparency spectrum, however, organizations can push themselves as far down the transparency scale as they feel comfortable with. They can take just a few steps if they want - and we we put forward several possible such first steps. Wherever organizations choose to place themselves along the spectrum, measurement is important so they can assess where they are and where they wish to go and how to traverse the distance.
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Photograph by Highways Agency, via Flickr