25 Oct How to build an indicators culture (and not a data culture)
In the era of Big Data, many people are pointing out the need to build a data culture. The discussion puts on the table the relevance of culture, the key to achieving alignment in the organization. But is a data culture what we need? It is rather a time to start talking about a culture driven by indicators and goals.
What are indicators
Indicators are tools designed to show a relationship between variables and help visualize the changes and progress that are being made towards a certain result. To be truly useful, they must be clear, specific, actionable, and aligned between those who will use them.
There are two types of key indicators:
- KSIs: Strategic performance indicators, which are established at the management level and guide the strategic goals of the organization.
- KPIs: Key performance indicators, used at the operational level and impact the KSIs.
So, what is the difference between data and indicators? A data is just an isolated point of information that may have a specific use. An indicator, on the other hand, is a construction that allows us to see the history of the data and its evolution in relation to the goals.
Information gathering tools abound in all organizations. Among their main benefits, they can help:
- making more effective decisions
- making decisions in an agile way
- predicting and anticipating problems
But this is not always the case. On many occasions, the processing of a large volume of information becomes an obstacle in the process, or the interpretation of the data is biased by preconceptions.
The key is to be able to define goals that are aligned throughout the organization and -based on data- build indicators that help make smart and focused decisions.
How to set indicators
The first step when building indicators is to ask yourself what your objective is, what you want to achieve, and from there on, analyze how you will measure it. The evolution of an indicator is always in relation to a goal or an expected result.
Second, analyze what is not measured in your organization. What could you be overlooking that could help improvement? I would like to highlight here three elements that many organizations forget to analyze or usually only do so superficially.
Measure the experience of your collaborators and suppliers
Keeping your client satisfied is as important as having the commitment of those who work internally or externally to achieve the organization’s objectives.
Collect implicit data
It is very common for both clients and collaborators not to express problems or concerns in the surveys that are also significant, perhaps because they do not dare, or because of the context, or because it simply did not occur to them at the time.
It is important to use different measurement methods that help expand and contrast the data set. The key is in the fusion of different techniques:
- Quantitative: Surveys, for example, are very useful for opinion polls.
- Qualitative: In-depth interviews or focus groups can help understand the reason behind the responses obtained with a quantitative methodology.
Measure the culture
It is high time to break the paradigm that there are certain things -such as culture- beyond the reach of measurement. Everything can be measured and the challenge is to find the how.
I would like to share a visual example.
In a company where I had to work, a culture diagnosis revealed an absolute misalignment between the different levels in how they perceived and thought about their culture. This critical cultural data was a clear inhibitor for transformation. The early discovery of this problem allowed us to focus on the construction of a shared vision, which was the basis for achieving the desired change.
Comparative infographic of individual CEO responses vs. the average response of level 1 (directors) and the rest (levels 2 and below) in an online survey.
Among other questions, the clarity of the objectives, the availability of the leaders, the level of autonomy, and other cultural factors were investigated.
How to build an indicators´ based culture
If your organization does not have an indicators culture, you will probably see resistance such as the lack of credibility in the validity or usefulness of the data, errors might be justified by blaming the data, or, even worse, the data could be manipulated from preconceptions or perceptions.
Building a culture based on indicators is creating a common language in which everyone agrees on the importance of measuring, why we measure what we measure, and what we seek to achieve with it.
Steps to building a culture of indicators:
- Define goals: Strategic goals need to be aligned at the management level, and operational goals need to be aligned with the strategic ones.
- Align techniques to collect data: There must be an agreement on which tools will be used to ensure transparency, consistency in measurements, and credibility.
- Develop indicators: Focusing on the goals, define which variables to measure in order to evaluate progress.
- Define actions: Design a plan to improve the established indicators.
- Establish learning processes: Build a lifelong learning system that allows experimenting, measuring, learning, and evolving throughout each sprint.
Building a culture of indicators can help make more agile, effective, and focused decisions. But for indicators to become part of the culture, everyone within the organization must agree on certain points.
First of all, everything can be measured. The important thing is to be clear about what to measure, why we do it, and how we do it.
Second, indicators create value. All people need to understand that data transparency is beneficial for everyone, and this is closely linked to collaborative work.
Third, indicators help to learn. It is true that there is a level of uncertainty, and that indicators can always be improved or supplemented with additional ones. But, above all, indicators help take action in order to improve, evaluate and rethink the next sprint.
In short, a culture of indicators is necessarily a culture of learning and experimentation, a culture of collaborative work, aligned goals, and, above all, a culture of transformation.
Author: Martín Molteni