Measuring and Reporting

Management styles seem to go in and out of style. We have one that works moderately well, and then we go looking for one that is purported to work better. It didn’t used to be like this. For the longest time business structures seemed to follow the same structures that we had in our militaries. We even used a military naming nomenclature when we described them: The General Management Model.

Now I am sure we have all heard the jokes about the efficiency of the Military, and how “Military Intelligence” is an oxymoron, but it seems to be an organizational model that has literally stood the test of time. Please do not make the mistake in assuming that I disrespect the Military. On the contrary I have the greatest respect for those that serve in the military. They have chosen to put themselves at risk for our benefit.

I thank them for their service.

Can you imagine what would happen if the Military experimented with a Matrix Management organizational model? Having a conference call in the middle of an engagement to determine what the response to the hostilities should be doesn’t strike me as the most effective way to deal with that situation. The phrase “shoot, move, communicate” leaps to mind as the preferred active response.

However business has never seemed to be constrained in such an organizational way. There are many organizations that have dabbled with if not fully implemented non-general management types of organizational structures in their efforts to find more effective ways for dealing with their various engagements. Has it worked? I would say that the results are mixed. In some instances possibly yes and in others, not so much. I think that it clearly goes to show that there is an individual / human aspect to leadership that directly interacts with and affects the success of the chosen organizational structure. Good leaders can make any organizational structure better, while managers can slow down the progress of any organization.

What these other organizational models have also done is that they have created the need for an entirely new business structure almost entirely dedicated to measuring and reporting on the various separate business elements.

The creating of this measuring and reporting structure has both good points, and some not so good points. Within a non-general management oriented organization no one person has the full authority over any specific engagement. In the military this would be the equivalent to having an organization responsible for guns and another organization responsible for bullets. While you may come up with the best guns and the best bullets, if they don’t work together you may be in for some surprise issues when it comes to engagement time.

So how do you solve this problem in such an organization? You measure each group’s performance and publicize or report on it.

It has long been proven that the best way to get someone to fulfill their responsibilities is to report on and publicize their performance. This is true with respect to the investigative reports that we see on television that expose improper behaviors in our politicians and businesses, and it is also true with respect to the internal workings and responsibilities within a business organization. Shining a light on bad behavior is one of the best ways to get that behavior to stop just as shining a light on good behavior is an excellent way to continue to propagate that type of behavior.

The problem with this sort of structure is that those people who are doing all of this measuring and reporting are not directly contributing to the performance and progress of the business. They are making sure that someone else is directly contributing to the performance and progress of the business. No matter how you want to look at it, there is a fundamental difference. Measurers and reporters are what are known as Overhead Expense in an organization.

In a distributed (verses centralized) organizational structure no one controls the end to end view and performance of the business or the organization. For a business to be maximally efficient someone needs to have this decision making authority and responsibility. In the non-general management organization no one has that final decision making role and since it seems that everyone must be fully informed, everyone must be measured and reported on by everyone else. It is possible that the evolution of this process results in more people measuring and reporting on what needs to be done than there are actually doing what needs to be done.

This can be seen as a business proof of the old adage: Too much of a good thing can be bad.

This sort of measuring and reporting appear to take a more central role in the organization when there is a division between responsibility to get something done and the authority to get something done. In the military there is a very clear responsibility – authority line of command. Orders and responsibilities are cascaded down and the objectives are usually reasonably clear. One officer does not go outside of his organization and tell another officer or his organization what they must do unless there is a direct reporting line between them. In this way compliance with the objective is a given.

In the distributed responsibility structure, compliance may not necessarily be a given. Issues arise when one organization is dependent on another for the completion of a task, but the second organization fails to prioritize or perform its part of the task. After all, what can be done when an organization fails to comply with the wishes or directives of another organization that is not directly in the same reporting line? You may be able to complain, but you cannot enforce compliance as may be done in the General Management model.

So what do you do to assure that disparate organizations comply?

You start measuring and reporting on them so that everyone else knows which organization in the distributed structure is not performing. This is both an offensive strategy in that it tracks progress (or lack of it) toward the objective as well as a defensive strategy in that it clearly points out if there are issues and where they are – presumably not in your or the measuring organization.

Reporting in the general management structure is used to determine the progress against a defined set of goals. It is normally self reported by the organization. Reporting in the decentralized structure not only performs these vital tasks, but also takes on the added function of identifying any potential external organizational dependencies that can be incrementing, or decrementing performance. As such it is not uncommon for each group to report not only on themselves, but on all contributing groups to make sure that their, presumably correct opinion on progress is documented. Thus they all add to the complexity and the overhead associated with the entire reporting process.

Measuring and reporting are definitely needed in business. It is how we keep score. Having each group report on so many other groups would seem to me to be an extreme. The problem is I don’t know what else you can do when one group has the responsibility to get something done, but the actual authority and ability to get it done resides somewhere else. It seems that the only thing to do is shine the light and hope for the best.

Either that or utilize an organizational structure where the authority and responsibility to get things done reside in the same place. It cuts down the need for so many reports. Like President Harry Truman said:

“The buck stops here.”

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