Tag Archives: KPI

Ecopolicy game – Coaching at performance review meetings


Ecopolicy game

Ecopolicy game

In June we did the Ecopolicy game as an exercise for coaching at performance review meetings (or also: steering meetings).

The game was done in two phases and the goal was:

  1. To lead or attend a performance review meeting and have a similar experience like the management of your organization has each week, month, quarter, …
  2. To coach an attendee of the performance review meeting and practice your coaching skills.

Game contents

You and your team are the leaders of Cybernetia, a cyber state that needs a government to survive. Politics, production, environmental stress, quality of life, education and population are the measured sectors of human life and are expressed in KPIs. In the game these KPIs are all interlinked in such a way by mathematical relations that each decision results in a chain of effects and repercussions just like in real life.

Lead or attend a performance review meeting

In a 20 minute long performance review meeting the ambassador decides together with his 5 ministers on the policy of Cybernetia. Some and certainly not all KPIs are under the influence of the government.

You get 5 attempts of 20 minutes to lead your nation, Cybernetia. In one session, the goal is to take at least 12 decisions in up/down grading the KPIs which you can influence.

If the quality of life for your population is getting worse, your population will question your policy. When it escalates, the population does a coup d’etat and you loose.

What did I learn as board member?

In the first round I was the ambassador of Cybernetia and together with the board, we determined the policy.

  • A performance review meeting can be very stressful! The first round went almost completely to trying to understand the tool.
  • When all board members are coached individually you see strange behavior and changes in behavior between the board meetings.
  • Because you are also coached individually, the board sees your behavior changes and reacts on it.
  • Group dynamics are always happening. I repeat: group dynamics are always happening! Even if the team work moments are very short, the group will go through the forming, storming, norming and performing stages. Be aware of it.
  • After each performance review meeting there is a recap session. Use it as ambassador to give feedback on people behavior. But don’t wait to the recap session if the behavior is not acceptable during the PRM.
  • Use your dashboard. Look at the facts. When emotions take over, our rationality stays behind.
  • It is not needed as team leader to know all the details.
  • It is not needed as team leader to facilitate the discussion. If somebody else is better, let him do it.
  • It is needed as team leader to take decisions based on uncertain elements.

What did I learn as coach?

In the second round I was the coach of a minister of Cybernetia. I watched my coachees behavior, the group interaction and the process.

  • Write down facts and observations, not interpretations. Interpretations are assumptions that you have the right answer.
  • Coaching on behavior and facts is a hard job. You need to be observing and writing at top speed to get everything right.
  • Giving feedback is not always easy. You coachee can go in resistance. Use a much facts as possible. Pick your battles.
  • Try to ask questions during feedback talks. Challenge, but try to understand. Why did he do that? Did it have the wanted result? What could have gone better?
  • If your coachee doesn’t do anything, he still doing something! Don’t fall in sleep when your coachee remains below the radar. Why is he doing so? What does his body language see? How is the group interaction?
  • Observe the process of decision making.
  • After the coaching talk, make a summary. What is the most important thing he learned? What will he do different next time?

More information on the game

Flyer

http://www.vandewijnckel.com/images/stories/pdf/Ecopolicy_Flyer.pdf

News message

http://www.vandewijnckel.com/index.php?option=com_content&view=article&id=86%3Ahogeschool-zeeland-ecopolicy&catid=45%3Aprojecten-systemics&Itemid=130

The inventor

http://www.frederic-vester.de/eng/ecopolicy/

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Lessons from triathlon for corporate athletes


Last week I went to a presentation where the athlete & Belgian triathlon champion, Simon De Cuyper, gave an interview about setting clear targets. Just like in the corporate world, in the sport world is setting targets an important part when acquiring results. During the interview Simon shared some of his experiences and lessons learned.

Triathleet Simon De Cuyper

Triathlete Simon De Cuyper

I’ve made a list of key insights for you to share.

Focus on the process and process targets

When you’re only focussing on the end result and the end target, you might get caught up by stress too much. Simon has learned to focus on the process and set process targets. For example, the start of the swimming part of the triathlon and the change-over between the sports in triathlon.

When you only keep the end target in mind, focussing on it might freeze you. When you focus on the different steps and parts to make it to your target, you’re focussing on how you’re doing your job in the best possible way.

To quote Steven Covey: “Begin with the end in mind”.

Set a target

One of the differences between a professional and many recreative athletes, is the principle of setting targets. When you want to improve upon something, whether it’s triathlon, squash or incident management, you’ll have more chance to success when you set a target.

The target will keep you focussed and allows you to measure progress, which motivates.

Set a realistic target

Simon has set his target for the 2014 Olympic Games to be in the top 8 of triathlon ranking. “Why not go for gold?” was the next question of the interviewer. Simon replied that he was aware of his capabilities and choose to pick a realistic target. A target where he needed to stretch himself, but which he could make.

I’m not sure what to do with this takeaway. I understand how this could work, but history has learned us that setting inspiring targets can work too.

See for example Microsoft, Apple and the Nasa.

President John F. Kennedy, May 1961: “I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth”

Bill Gates, Microsoft: “A computer on every desk, and in every home”.

Steve Jobs, Apple: “What we want to do, is to change the way people use computers in the world.”

Use a coach

Unlike in the corporate world, in the sports world it’s very common to have a coach. A coach who coaches you, supports you, challenges you. The coach doesn’t have to be better than then athlete, but who is committed to the success of the coachee. A good coach will make you stick to the commitment of running 4 hours a week, even when it’s raining.

In the corporate world the same logic can be applied to the role of a coach. The coach doesn’t need to know it all, the coach doesn’t have to be older, … The coach needs to be committed to the success of the coachee, provide an honest mirror to him and motivate him when the going gets tough.

Know your limits

Simon works at continuous improvement, but he is aware of his (physical) limits. There will be a day when continuous improvement is not possible anymore. A big “transformation” will be needed then, maybe a change to a total new sport, like long distance running, he testified.

We often hear this remark at the work floor too: is it possible to keep on improving, even with tiny bits? Instead of improving peanuts (and violating the Pareto-rule), it might be interesting to question it all and try something new. To make a transformation.

Additional reading

The Making of a Corporate Athlete by Jim Loehr and Tony Schwartz

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The PDCA cycle applied to your diet


For the readers that got here searching for an approach for their diet: please read further and work out your plan!

Explaining the need for installing a performance management culture in your organization is not an easy job. There are many approaches for it and each has its disadvantages. The key is that you’ll have to attune your approach to your audience.

Following metaphor has worked good for me when explaining the Plan-Do-Check-Act (PDCA) cycle, the base for a performance management culture, to people on the work floor.

PDCA cycle

PDCA cycle

The PDCA cycle applied to your diet

It’s January first and you decided in your new year’s promise that you want to lose weight. It’s the same promise as the year before, but this year you’ll make it stick.

Plan

First of all, you plan for results and pick an ambitious target: by the end of the year I want to weigh 10 kilograms less. The target is ambitious, but not unrealistic.

Do

How are you going to do it? For losing so much weight, you need some adjustments to your diet. No more sugared soda drinks, only one time a week French fries and no whipped cream, except for at celebration parties.

Check

To make sure you are on track to losing 10 kilograms by the end of the year, you need to check upon your progress. There are two types of measurements here:

  • Lagging: after the facts. These are history and cannot be controlled anymore.
  • Leading: predictors. These can be monitored and controlled.

As a lagging KPI you can follow-up the grams and calories you have eaten every day in your diary. Other measurements could be the number of “good” and “beat” food you have eaten that day and a smiley face with your personal perception on the day (I have actually seen this in practice!).

Because the lagging KPIs cannot be controlled anymore, you also need a measurement you can influence. As a leading KPI you measure your weight every week. But wait, isn’t this a lagging indicator too? Indeed, the facts have already taken place, but measuring and checking up upon your weight is a predictor for you making your target in time: 10 kilograms less by the end of the year.

To make sure you reach the target, you can create a plan for your weight with milestones along the way (during the year). For setting out this KPI, you need a base (starting point) too: your current weight.

Create a realistic plan for your weight loss: the summer holiday period is probably not the best time to lose much weight.

When you have a base (starting point), target and plan (intermediary milestones), you have your plan for action! (see figure)

Diet plan

Diet plan

Act

Time to follow-up and act upon your progress. When your measurements are not according to plan (see February), it’s time to act. What is the reason you’re not making your target? It could be many: wrong KPI, wrong base, your diet is not strict enough, too ambitious target, too ambitious plan, defect scale, … Do a Root Cause Analysis and find out the real reasons why.

If you know the reason why, you can adjust can take the lessons learned along in the Plan and Do steps of the PDCA cycle. You can adjust the Plan (less weight loss, other deadline) or adjust the Do (more strict rules for not eating unhealthy food).

PDCA cycle for your diet

PDCA cycle for your diet

Lessons learned from positive formulation

The careful reader has probably noticed that it’s difficult to pick to items in the “Do” list of the PDCA cycle. The way is formulated now, it’s an exhaustive list that needs to be adjusted every time again when we see the diet is not working.

If we use the power of positive formulation then the Do step can be reformulated in such a way that it triggers our brain in the right way and is more durable.

Do-step positive formulated

Do-step positive formulated

Much success for the readers actually on a diet!

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Working with targets: the high vs. the far jumper


Result planning is a technique that is used for planning financial and other results (what’s in a name?!). For doing result planning you need certain elements:

  • A goal: why are you doing result planning as such?
  • A measurement: what are you measuring? Why?
  • A baseline: from where on do you start measuring? What is your starting value?
  • A timeline: when do you start measuring? When do you end?
  • A target: which results do you want to reach (by the end of your timeline)?

And last but not least:

  • A plan: what are the intermediary steps to your results? Is your progress linear or are you growing in steps (eg. release related in ICT environments)?

When you doing result planning for cost savings or financial benefits, we can recognize three types of people:

  • People doing no result planning at all.
  • People who do result planning like far jumpers.
  • People who do result planning like high jumpers.

Since we are now in the spirit of the Olympic Games of 2012, let’s look at the jumpers.

Far jumpers

Far jumpers are athletics who try to jump as far as possible. There are no explicit targets set for them. They just try to jump as far as they can. For them, there’s only the run line, the jump line and the sand. It doesn’t matter how far they get, as long as they get the most far of them all.

In business environments, far jumpers don’t plan for results. They just try to achieve as much as them as possible. This has some advantages and disadvantages.

The advantage is that the sky is the limit: why set limits when you’re doing actions regarding cost savings or financial benefits? Just try to reach as much as you can!

The disadvantage is that without planning, results are only a matter of luck. When you don’t plan for results, you have no guarantee that results are made. Ever.

High jumpers

High jumper Tia Hellabaut

High jumper Tia Hellabaut

High jumpers are athletics who to try to jump over a preset (high) bar. High jumpers don’t try to jump as high as possible: before they jump, they tell the referee how high they are going to jump. 2,02 meters, 2,04 meters, …

This is actually result planning: they set a target in advance and do their best to reach it. If they didn’t reach it, they missed target. If they did reach it, they can raise the bar and go for a next attempt. So, when setting new targets, the term “raise the bar” is used. Now you know where it’s coming from when your superior tells to raise it.

The advantage of high jumping is that it’s clear for everyone what the target is and what you have to do to make it. Just like in the Olympic Games, it’s probably not possible to reach your end target in just one attempt: you need intermediary targets.

Here’s where result planning comes into place: determine your end target, determine the steps to reach it and don’t be afraid to raise the bar when you make your targets too soon.

Thanks to my colleague Bart for the metaphor!

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Work is like a horse race


Racehorse runs with blinders

Racehorse runs with blinders

In a previous blog entry, we discussed the difference between a plan and steering board. The plan board is used for planning and balancing work for your team. To set focus. The steering board is used for measuring if your team is doing fine and reaching their objectives.

We can use the metaphor of a horse in a horse race to elaborate on the concept.

A team plan board is used to plan team effort on short team. You can compare it with the horse in the horse race: blinkers are used to focus its attention to the track and avoid the horse is distracted from the screaming audience all round.

A team steering board will contain measurements, KPIs, to see if the team is still on track. In the horse race you can compare this with taking off the blinkers and taking a step back. Where are we now? Are we doing good? How’s the rest doing in the race? Are we still on the right track? Almost like you would set the race on pause with your TiVo and taking a different camera angle.

To measure is to know, but don’t forget to plan for success! If you want to reach your team target, you have to plan for results. A KPI goes further that an actual today and a target value in x months: you need result planning. Plan small steps during the available time period that will lead you to your target.

If you’re not working with result planning, it’s like riding the race with the blinkers of your horse closed. Every round you open the blinkers for a second and then close them again. You are only measuring the actuals and not planning for the future, nor for success. You don’t know how you are doing in the race and what you were supposed to do, but only taking note that you are still on the race track.

Don’t limit this metaphor to planning and steering of day-to-day work! The same is valid for your Voice Of the Customer approach: take a moment to step back and see if you’re still on track.

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Find your best fit KPIs


Best fit KPIDuring a KPI workshop we were thinking about which KPIs we could measure. Typical KPIs for measuring the project management triangle (scope, time, budget; aka. project management triple constraints) were easy found. The fourth one, quality, often put in the middle of the triangle, gave us a harder time.

What defines quality?

I always say (or quote?): “Quality is in the eye of the beholder”.

This means: if you want to measure quality, you need consult the one evaluating it. In most cases this will mean you need to consult your customer (VOC), but also your superior or his superior (VOB).

What does “doing good” mean?

And then it hit me: we were having a hard time to find best fit KPIs, because we were doing it wrong. Before we can measure how the project is doing, we first need to find out what “doing good” means for every party.

We need to find our goal for using KPIs. Why are you measuring? Because you want…, you need …, your customer needs, … Once you have defined the goal for measuring, you can start with the how of measuring (ie. which KPIs).

The goal for measuring

Back to quality. Since the customer defines quality, you need to do a Voice Of the Customer and check what is important to him. Will it be timely delivery, zero incidents or a 24/7 service with answer by email in 1 hour?

Next step is to find out what quality means for your organization (Voice Of the Business). What is important for your organization? Do you get carte blanche for servicing your customer in every possible way? Probably not: you will need to balance the needs or the organization versus the needs of the customer. No need to rack your brain over it: just ask. Ask your superior. Check the strategy of your entity.

Use KPIs that inspire

When you did a VOC and VOB survey you know what is important for your customer and your organization. But you are not there yet. I recommend adding a flavor of team motivation to your KPIs. KPIs like cost/income ratio, customer satisfaction, project budget, on-time-in-full, … will not motivate your team. (Remark: I’ve actually seen customer satisfaction as an exception to this when working with a mature, customer focused team.)

Find out what makes your team go the extra mile. What really, truly motivates them?

For example, in an ICT project environment, we typically define KPIs like project budget, number of defects, percentage of reopened defects, customer satisfaction, … But these KPIs will not keep your team awake at night.

In a mature ICT team the goal of the project was to optimize the currently used custom tailored software. They studied the customer’s vision statement and picked up that cost transparency and production costs are important. So they started measuring them.

The costs were measured by the bill that was send each month.

For measuring production costs they went a step deeper and selected KPIs like CPU time, number of database transactions and data traffic in Megabytes. These KPIs are leading for the cost KPI, but even more: these KPIs express how good the IT people are doing their job.

These KPIs were good motivators for the team because it really meant something to them.

Budget or production incidents will not inspire them, but measuring the core aspects of the job they liked did.

Summary

To summarize: when selecting your KPIs:

  1. Do a VOC: what is important for my customer?
  2. Do a VOB: what is important for my organization?
  3. Pick KPIs that motivate your team
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Create plans for your strategy in action


Die Hard 4

Die Hard 4

Last night I was watching Die Hard 4.0 for the first time and one scene triggered some thoughts with me.

(Detective John McLane and Farell (nerd) are after the bad guy in one of the final acts.)

Farell (nerd): “Do we have a plan?”

McLane: “Findy Lucy [his daughter], kill all of them.”

Farell (nerd): “I mean more of a way to do that.”

First of all, McLane was emotionally involved and only thinking of the end result, not considering all risks. Further there was actually a goal, but not a plan.

Companies and their according departments create a vision, a mission and a strategy. But sometimes they forget what this implies for them. Vision and mission are defined at company level and further translated down the hierarchy. In best case, the entities lower in the hierarchy will not just copy the vision and mission, but will translate it into a version of their own and add their own interpretation, additions and departmental specifics.

Strategy means your actions and action plan for accomplishing your long term goal, your vision. This implies that you need to go further than creating a strategy house and distributing it in your entity!

How will you avoid that the strategy is deduced to hollow words and slogans? You do need to go one step further and ask the questions: how will we fill in the strategy?

If your strategy contains “we want to give the customer the best experience” ask yourself: What does a “best experience” mean for us? What does it mean for our customer? How will accomplish it? What are we going to do about it?

These actions will probably not be accomplished overnight, so you need a plan: an action plan, a commitment plan, a steps to milestones plan, … If you create a plan, you need to provide a way to check if you’re on target: define actions, set intermediary milestones, find measurements (KPIs) and plan a strategy follow-up meeting every six months.

Don’t forget: if you fail to plan, you plan for failure.

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Linking long term strategy with actions on the floor


Strategy - plansThe vision and strategy for the company are composed by senior general management and in most cases is translated to the next levels in the hierarchy. The different levels can decide to take over the statements or adapt them to make a better fit and set focus.

But how do we now that our strategy is working? We need KPIs for ensuring this.

KPIs for strategic purpose

The high level KPIs are almost becoming buzz words: Return-On-Investment (ROI), Return-On-Asset (ROA), customer satisfaction, the Net Promoter Score (NPS), …

These KPIs are suited for measuring the accomplishment of the vision and how the customer experiences this, but how do sell those KPIs to the work floor?

KPIs for the work floor

Employees which are not working the higher ranks and have a small impact on changes of the mission, vision and strategy will have trouble with identifying to those higher level KPIs. It’s too far from their beds.

Further, those KPIs tend to move very slowly (that’s why strategy is a multi-year plan) and the actions and decisions on the work floor need to be taken on a day-to-day base.

Just image a team or project lead saying: “Good news, team, the customer satisfaction went up .01 last week! Keep up the good work!”

It’s the challenge for each manager to pick the suited KPIs for their level in the organization. Further,they will need to “sell” the KPIs:

  • Make sure that your team understands the KPIs.
  • Make sure that your team can have an impact on the KPIs.
  • Explain the link with the long-term strategy.
  • Celebrate successes.

So how do we link both to each other?

KPI tree

Here is where a KPI tree comes into place. With the KPI tree you can link the different KPIs to each other. At each level of the hierarchy you can pick the KPIs which the employees can relate to and influence. Connect the KPIs to each other en then evaluate the tree and its links.

KPI matrix

The KPI matrix is the KPI tree with details in a matrix format. You can still make the links with the top-level KPIs, but you lose the visual aspect. On the other hand you will gain more room for the KPI details.

Sometimes the KPI tree is too heavy to set up (many KPIs, many links) and you need place to capture KPI details like description, responsible, frequency, etc.

In short: decide on strategy, pick the right KPIs at each levels, link long with short-term KPIs and make sure employees can relate to and influence the KPIs.

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Make every customer count


Customer - paretoA team, department, organization has in most, not to say all, cases more than one customer. When you use techniques like the oignon diagram to identify your customers and discuss the results with your peer(s), you will get to know all of your direct customers. You’ll even get to the customers they are representing, your indirect customers.

When you know all your customers, you can attune your Voice Of the Customer strategy to evaluate the opinion and improve your product and service.

But how would you divide your time and attention among all these customers?

The best customers get the most of your time

According to the Pareto principle probably 80% of your profits are made by 20% of your customers. If you would take this into account for customer interaction, evaluation and measurement, it means that you will be spending more time with that 20%.

Customer satisfaction feedback could be attuned and you could weigh in these important customers more.

For example:

Customer Satisfaction score Weight (based on eg. sales or profit) Weighted satisfaction score
Customer ABC

70,00%

80,00%

56,00%

Customer XYZ

20,00%

8,00%

1,60%

Customer DEF

30,00%

12,00%

3,60%

Total

100,00%

61,20%

From the perspective of profits and finances, this is the most suited customer strategy.

Organizations that follow this strategy are typically finance institutes (private banking), companies that target big market players, niche industries, etc

The disadvantage of this technique is that bad customer satisfaction scores will not make it to your dashboards. In this case 66% (2 of the 3) of the customers is actually very dissatisfied, but you won’t see it in the weighted satisfaction score: they only count for 20% (8 + 12%) of the total based on sales or profit numbers.

If these dissatisfied customers are not dealt with (please read: “helped” or “supported”) your Net Promoter Score will not lie about it.

Each customer is important

Another customer strategy is giving each customer the time and attention they deserve: each customer is equal and is equal important. No matter how much sales and profits they contribute to, your time and attention is divided among all of them.

For example:

Customer Satisfaction score
Customer ABC

70,00%

Customer XYZ

20,00%

Customer DEF

30,00%

Total

40,00%

From the perspective of sustainability and long-term customer relationships this is the most suited customer strategy.

Organizations that follow this strategy are typically not-for-profit organizations, public health care, hospitals, etc

The disadvantage of this strategy is the fact that the KPIs you use to steer your organization are very sensitive and will immediately react on negative satisfaction scores, no matter what or who the customer is representing.

So how are you dividing your attention?

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Rational Man day Usage


Efficiency vs effectiveness

Efficiency vs effectiveness

Terms like “Rational Energy Usage” (Dutch: Rationeel Energie Verbruik) are thrown at us every week in the newsletters. They mark the era of questioning our energy usage. Why are we using so much energy and where is it going to? Are our appliances using our limited sources efficiently? Are we using our energy for the right purposes? Unavoidably we get into a effectiveness versus efficiency discussion.

But isn’t the same valid for our man day consumption? Every day a lot of budget (man days) is burned at our companies, but are they spend right?

We make a difference here between efficiency and effectiveness.

Efficiency

Efficiency is doing things the right way, the efficient way. This implies with no overhead and in it’s most optimal form.

An example:

To make your software deliveries efficient you can use fast(er) computers, a customized development system and the Agile methodology.

Improve upon your efficiency with:

  • Eliminate wastes.
  • Check if every employee has access to everything he needs.
  • Check if you using the right tools.

Effectiveness

Nothing so great as doing things so efficient as possible, except when it are the wrong things. No matter how efficient you are working, if you’re doing the wrong things it doesn’t matter.

Hence the term effectiveness: doing the right things.

An example:

If you are developing screens but your customer wants a mobile interface, you are doing the wrong things. It doesn’t matter how efficient you develop your screens, the customer doesn’t need them.

If you want to improve upon your effectiveness, dare to take a step back and ask questions:

Productivity

So what about productivity? Wikipedia uses following definition:

Productivity is a measure of efficiency of production.
Productivity is a ratio of production output to what is required to produce it (inputs).

Productivity is by definition linked to efficiency, but not explicit to effectiveness. So it’s possible to do the wrong things and still be very productive!

Next time when you measure productivity make sure you take this nuance into account.

Measurement comparison

Efficiency

Effectiveness

Productivity

Meeting efficiency (start/end on time, agenda followed, …)Cases of mis-communication per defined and regular period/interval

Cases of re-work due to miscommunication.

Benefits of waste elimination

Meeting effectiveness (right topics/participants/scope)Suggestion system awareness & participation

Feedbacks given after idea processing

Test after training

Discount coupons in regard to coupons spread

Return-On-Investment

Output per worker or hour of labourOutput per hour / day / week

Output per machine

Unit costs (total costs divided by total output)

A little side note with measuring effectiveness: make sure you first define what you want to measure. See that you’re measuring solutions for the root causes instead of symptoms of the problem.

Note to reader: we’ll get a big clash here between efficiency & effectiveness, leading vs lagging, and dealing with root causes 🙂

For example:

When the problem is an increased violence at the streets and as response you’re putting more blue on the streets. You could measure efficiency and effectiveness of the extra police forces, but it’s better to measure the efficiency and effectiveness of the actions you take to solve the root causes of the violence.

Applied to the office context:

If you want to install a performance culture, don’t measure effectiveness and efficiency by measuring the number of participants and participants on time in a meeting, but pick measurements for the performance of your organization.

 Applied to the ICT context:

Software defects need to be solved as efficient and effective as possible, but let’s focus on measuring efficiency and effectiveness of the delivery of quality software.

More on this here: http://blogs.hbr.org/pallotta/2010/11/our-ineffectiveness-at-measuri.html

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