You Get What You Measure

In the Holacracy Community of Practice session today, we talked about how to align an organization around its purpose. I forwarded the idea that in organization theory today it is a common thought that "you get what you measure." This means that whatever aspect of the organization you measure and how you determine success/failure in that aspect, will determine how the organization will operate, perform and align around its purpose. This is another way of expressing "contextual thinking" as how and what you measure sets a very powerful context to operate within.

It is not only the explicit measurements but also implicit expectations and unwritten rules of operation that have a powerful effect on the organization. I have worked with organizations that explicitly express a desire for innovation and have explicit rewards for innovation, but have an implicit cultural of fear of failure to such a degree that they find it impossible to embrace anything new or different. This creates a very painful and frustrating experience for anyone wishing to innovate, thus squashing any change.

Holacracy expresses the tenet that an organization can start from where it is and iteratively change its culture and operation. This is very true as the only way to get to any destination is to start from where you are standing. But to sustain any progress, an organization must quickly look at what is measured and rewarded/punished and start changing that before anything other than superficial behavior will start to change. Otherwise, the context set by what is measured and rewarded/punished will strongly force the organization right back into the original set of behaviors.

An organization with significant experience and investment in practicing Holacracy will be able adjust what and how they measure dynamically to align with its evolving purpose. Once a critical mass is achieved, the practices of Holacracy act as a positive feedback loop to propel the organization along its purpose defined path.

Holacracy explicitly defines a place for metrics. The practices hint at metrics and provide guidance in developing metrics. Most conventional metrics are oriented towards producing stockholder value. Holacracy refines these concepts by defining two categories of metrics, Key Performance Indicators which are similar to the conventional metrics and a new set called Key Health Indicators which reflect the health of a circle towards achieving its purpose. But there is not yet an explicit set of "starter" metrics that that can help a conventional organization move towards self sufficiency in Holacracy. Discovering a good starter set will require many implementations and analysis.

The critical nature of the "you get what you measure" mantra in discovering the necessary metrics early in the process requires an experienced, observant and sensitive hand to facilitate successful implementation. The intensive CHP training class provides a good head start in developing this experience. In addition, support from others experienced in Holacracy is also necessary to increase the probability of a successful implementation.