In my decade-long path of helping boards and CEOs implement practices that support the elegant governance system that is Policy Governance®, I have learned that monitoring is both embraced and cursed. Embraced for its promise of providing evidence that the organization is really making a difference. Cursed because figuring out the ways in which the world will be different and how to measure those differences is really hard. There is a significant learning curve.
And as CEOs come to learn: “Selecting the right measure and measuring things right are both art and science.”1 But finding the right measure(s) to measure the right things is hugely important to the CEO and the board. After all, monitoring information is the power tool the CEO uses to demonstrate accountability to the board. Accountability that delegated authority has been used to achieve the organization’ purpose and avoid what is unacceptable in doing so. Just as in learning to use any power tool, it takes time to learn how to provide monitoring information skillfully and precisely.
Without exception, the CEOs with whom I have worked are excited by delegation of authority that allows them to apply their own, staff members’ and volunteers’ expertise, experience and creativity to achieving the board’s desired results. Also without exception they are somewhat daunted by the prospect of trying to figure out what clear, concise measurement procedures might demonstrate achievement of a result such as “families that come through a shelter’s doors have safe, temporary refuge, experience healing, rebuild their life and integrate into a supportive community.”
CEOs also know that their boards will be looking for measures that can be defended as reasonable. So in selecting measures, the CEO must avoid what Henry Mintzberg2 has described as the problem with many well-intentioned efforts to measure – that they opt for factors most easily measured.
The measures the CEO chooses should influence actions, decisions and behaviour in the operational organization. Otherwise, as Douglas W. Hubbard says, “If a measurement matters at all, it is because it must have some conceivable effect on decisions and behaviour. If we can’t identify a decision that could be affected by a proposed measurement and how it could change those decisions, then the measurement simply has no value”.3
Hubbard’s book is illuminating about the ability to measure intangibles such as those often expressed in Ends and Executive Limitations policies. I silently cheered when I read that, “seemingly impossible measurements start with asking the right questions.” The book offers sage advice to any CEO who is starting to consider measurements that could demonstrate achievement of the board’s policies:
- Ask thoughtful questions about what you already know.
- Don’t assume measures need to be complicated and expensive.
- Recognize that measurements do not need to remove uncertainty but they do help you learn more than you knew about something that matters to the organization.
So, yes, figuring out what to measure is a skill and it takes time to learn. But it is absolutely essential to determining if the organization is having the impact that it should. It is necessary for the CEO to demonstrate accountability to the board, and in turn, for the board to demonstrate accountability to those on whose behalf it is directing the organization.
Consider the alternative to not accepting the challenges posed by measurement – not knowing if you’re making a difference. “Every line is the perfect length if you don’t measure it.”4
1 Pearl Zhu, “CIO Master: Unleash the Digital Potential of IT” (BookBaby, 2016).
3 Douglas W. Hubbard, “How to Measure Anything: Finding the Value of “Intangibles” in Business (3rd Edition, Wiley & Sons, 2014).
4 Marty Rubin, author of “Boiled Frog Syndrome”