How to connect management, measurement and focus

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There are three questions that many businesses will need to address in 2018:

  1. How can we create business operations that have fewer emissions while creating more value?
  2. How can we protect the value we create – the intellectual capital – from pirates?
  3. How are we going to ethically use personal data?

These three questions are important because there are regulations and rules that need to be looked at now.

The Energy Savings Opportunities Scheme or ESOS requires large companies to audit their energy and transport use and look for savings.

The Cyber Essentials programme, run by the UK’s National Cyber Security Centre, aims to help all businesses and consumers become more secure.

And the General Data Protection Regulation or GDPR tells us how to manage personal data and keep it private.

So, what are the links between management, measurement and focus?

First, the standard approach to complying with requirements like these is to put in place a management system.

Most management systems, especially those that follow an ISO type standard, are based on the Deming Cycle – named after the engineer who helped transform Japanese manufacturing after the war into a lean powerhouse of quality.

The essential elements of the Deming Cycle are based on the principles of scientific enquiry and are:

  • Plan: Look at the situation and come up with an approach to manage it.
  • Do: Do the things in the plan
  • Study: Study what has happened and learn how to improve things. Some people use check instead of study – but Deming thought study was better as check is more about inspection, while study is about learning.
  • Act: Change the plan based on what has been learned and go through the cycle again.

This approach works well for tangible things such as reducing process waste or figuring out which items of kit to replace to reduce energy use.

But… things can get messy.

All too often a management system becomes an exercise in paperwork rather than a real effort to improve something – we do it to comply or pass the audit rather than actually becoming a better organisation.

And that’s because the technical element is only one part of an organisational system.

The intangible elements are just as important to get right.

The Balanced Scorecard is a method created by Robert Kaplan and David Norton that tries to look at the organisation as a whole.

Clearly, the way in which success is measured by an organisation is in the financial returns that come from doing a project.

Customers, on the other hand, focus on what they get out of the partnership.

In order to keep customers happy, the organisation needs to have the right internal capability to do the right things.

And that only comes when the people in the organisation are given the right learning and growth opportunities.

So, once again, how does all of this connect to management, measurement and focus?

It’s because it all starts with culture.

If the people in an organisation know and get with the vision and strategy – whether it’s becoming cleaner and greener, more secure or more ethical – then we’re starting with a firm base.

We can create a strategy using the Balanced Scorecard approach that works out what people need to know and helps them learn, puts the internal processes in place that are required, shows customers how this makes us better service providers and also gives us the financial returns needed to keep shareholders happy.

Our of the Balanced Scorecard comes a set of objectives, measures, targets and initiatives.

Otherwise called a plan.

We can implement the plan using the Deming Cycle and continuously improve our organisation – and that’s where quality comes from.

That’s sort of management and measurement covered, but where does focus come in?

Well, with all these kinds of things, there are two approaches we tend to take.

Either we look for the lowest cost compliance approach – because really none of these things are really that important and the existing financial pressures and priorities don’t leave any time for the hard work of business transformation.

Or we believe that we need to change to survive – and so the work involved in really becoming cleaner, safer and more ethical is worth doing.

And the results we will get in the next year will depend on which approach we focus on.

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