Your Job Is Change

8. New times demand new measures.

Perhaps the toughest job of the change insurgent is to change the way that the organization keeps score. It is, after all, a simple truth of business that what gets measured is what gets done. That simple truth can become the death knell of every change insurgent -- if the same old metrics continue to serve as the company's measure of success. It's hard enough to create an environment for constant change; it's even harder to make the case that change is necessary and is in fact working, when all of the traditional indicators continue to determine the way that the company keeps score.

When it comes to dealing with the challenge of measurement, every smart change insurgent has to learn to play a double game. First, you have to learn how to play their game, the way that they play it. As survivors of the dotcom shakeout are rapidly learning, it's not enough to insist that the new economy change the laws of economics: You still have to be able to appreciate and play by the old rules if you want to stay in the game. Consequently, change insurgents learn to speak the language of finance and venture capital -- if only to make sure that they are equipped to argue the case for change in the language of the change resisters.

The second game that you have to learn is your own game. Here, change insurgents master the art of coming up with new metrics and measures -- performance indicators that reflect a new mind-set about the important new rules of the game. Are you looking to create a new sense of urgency in the organization? Try focusing on metrics that highlight speed: the time that it takes to bring a new product or service to market, the time that it takes to replenish or to restock the shelves with your product, the time that it takes to fill a customer order. Perhaps your change agenda focuses on the customer experience. Try creating metrics for every contact that a customer has with the company: the percentage of orders that are handled perfectly; the percentage of orders that, if flawed the first time, are corrected perfectly; the percentage of customers who rate their experience as good or excellent. Or perhaps the change agenda is all about your company's performance in the talent wars. Again, new metrics can buttress your argument that there are other measures besides return on investment or return on equity that the company needs to pay attention to -- for example, offers accepted by new recruits, employee retention among new recruits, new recruits headhunted away from key competitors, and so on.

The issue came up recently at a big high-tech company, where a group of software developers asked me to brainstorm with them: How could they convince the company's chief financial officer that he was about to make a mistake because he was using the wrong metric? He thought that it would be cheaper to buy a particular piece of software off-the-shelf from another company than it would be to produce it in-house. In terms of immediate outlays, he was right. But the in-house developers saw in the decision a larger question: whether to make an investment in their experience. And they felt that making that investment was critical to the company's ability to innovate in the future. "If we don't build our own version, we're out of the race, and that means that we're dead in three to five years," they told me.

So the developers and I designed a new metric that they, as change insurgents, could use with the CFO -- one that identified critical paths of innovation for the company and then measured the value of human-capital investments in those paths. The new metric didn't substitute entirely for the CFO's own "make or buy" calculation. But it did add a new dimension to it. The best part: It changed the debate inside the company. In the end, the engineers lost part of the battle but won the war. While the company bought some of the software from outside vendors, it is now focusing on building capacity in critical paths -- and is continuously reevaluating what those paths are.

As a change insurgent, not only do you have to come up with your own agenda for change; you also have to create a compelling scorecard to demonstrate your performance, and, ultimately, the way that your performance contributes to the company's overall success. Being able to speak two languages with two sets of measures -- theirs and yours -- is the first step toward changing the way that the game is both played and scored.

9. Just do it.