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February 3, 2005
Implementing Metrics Is Connected But Separate from Choosing Management Style, Company Culture, and Incentives
Topic: 2) The Consulting Trade

More often than not in traditional management consulting engagements involving operations, there is usually room for setting up or revising goals, metrics & reporting, and service level agreements. Depending on the phase of development of a company (often couched as Stage 0 [Ad-Hoc], Stage 1 [Functional], Stage 2 [Intrabusiness Cross-Functional], etc. maturity levels by a consulting firm), the next higher-level of metrics and reporting may apply and be a goal for the client organization to strive for.

Where management has to be somewhat careful about applying metrics, however, is how people and company culture play a role in getting everything to work together right.

To put a finer point on things, one can put in place a perfectly appropriate set of metrics and reporting systems for a company yet miss the boat completely on a management-level as to how the results should be applied because of the culture.

As an example in sales operations, I have frequently seen a competitive environment laid out. People's individual performance levels are exposed, and poor performing people are weeded out. This environment can work out in some cases. On the other hand, in a collaborative engineering or product development environment, cooperation may be encouraged.

On a related topic, a friend of my wife and I, Dr. Uri Gneezy at the University of Chicago, has some great research on the relationship between competition and gender. From the research summary:

Gneezy suggests that CEOs creating incentives in their firms should be aware that making the internal environment more competitive might create a bias that helps men, while putting women at a relative disadvantage.

My take on applying this type of research would be to recognize and raise one's sense of awareness to the environment one is implementing metrics in. Although metrics may be encouraged to be tracked to an individual-level doesn't automatically equate to that the environment has to be a competitive one. Choosing a collaborative versus dictatorial management style that is compatible with the desired company culture is a separate choice from metric implementation.

Steve Shu
Managing Director
S4 Management Group

Posted by sshu-s4 (c) S4 Management Group LLC at 12:01 AM CST
Updated: February 3, 2005 12:27 AM CST
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August 19, 2011 - 4:22 AM CDT

Name: "Ridoy"
Home Page:

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