Been a while since I’ve read an article deserving 5 stars, but this one by Dr. Michael Hammer through the Sloan School at MIT is a “must read” for those interested in the Analytical Culture issue.  Titled (warning, the article is a 10 page PDF) The 7 Deadly Sins of Performance Management [and How to Avoid Them], it is chock full of classic mis-measurement examples and the cultural reasons they happen, along with commentary from four managers who have been successful building the analytical culture at their companies.

The seven sins (links are to examples on this blog) are: Vanity, Provincialism, Narcissism, Laziness, Pettiness, Inanity, and Frivolity.  The author provides a four step solution to purging the corporation of these sins which sounds very much like the solution we’ve managed to create surrounding web analytics, and also addresses the Fear of Analytics question.

So here we have the analytical culture problem nicely outlined by a person with substantial credibility (as opposed to outlined by a raving blogger).  We still have the same problem though – actually doing something about it.  The four step solution provided sounds like the right “words”, but I’m still itchin’ for a bit more “How To” in the answer.

How, specifically, do I “create an organizational culture and value system that encourages the disciplined use of metrics for ongoing performance improvement rather than regard them as threats to be feared or opponents to be vanquished“?

I love it when you talk that way, Doc…

But seriously, of course you need leadership, you need to measure the right things in the right ways, and some reward for changing behavior and accomplishing goals would be nice, but I think it goes deeper than that.  For example, there are fundamental structures in place that conflict with the mission, particularly in Marketing.  Witness, the inherent conflict between Periodic and Customer Accounting.

If the entire company is marching to a quarter by quarter drum, and many people are rewarded based on the results of that march, how do you get these people to focus on the end customer-oriented metrics that really matter, and are probably not best measured in the periodic quarterly format? 

Isn’t this conflict with the quarterly financial reporting culture the same reason many companies go private?

Check out the article here.