CBODN ANNUAL CONFERENCE "The Metrics of Innovation”

1. CBODN ANNUAL CONFERENCE"The Metrics of Innovation” Mel Schnapper, Ph. D. Mel Schnapper Assoc. Washington, DC 20012 mschnapper.com www.schnapper.com mel@schnapper.com The 3Ms of Performance

2. Purpose • To create metrics (qualitative and quantitative) that describe the specific results of an innovation of a service and/or a product in a specific environment to achieve specific results.

3. Objectives Objectives:  As a result of this presentation, you will be able to: 1. Described the 3Ms –Measure, Manage, Magnify methodology of performance metrics 2. Identify your own potential/actual Key Value Areas (KVA) 3. Measure the proportionate value of these areas 4. Describe the specific results these KVAs should produce. 5. Describe the innovation you will create/are creating. 6. Distinguish between four standards of performance for these results

4. . Mel’s KVAs as Quality Manager of Global Project Management Service Line – Oracle Corporation 40% - 3Ms 20% - Utilization 20% - Customer Satisfaction 20% - 8 Initiatives

5. Standards 4 Excellent. Dramatically better, faster, cheaper or creatively discontinuous from Very Good. Very Good. Better, faster, cheaper. Exceeding expectations of the fee, salary, etc… Satisfactory. Earns the paycheck and delivers expected value to customer, employer, client, etc… Unsatisfactory. Lacking in any way from what was expected. 3 2 1

6. Mel’s Performance Objectives II. Performance Objectives 40% 3Ms: All Global Project Management Service Line (GPMSL) members have completed a 3Ms template for all KVAs and any POs that support GPMSL objectives = 2, 50% of the GPMSL complete all POs for their own corporate hierarchy = 3; 50% create KVAs and POs for their direct reports = 4. 20% Utilization: >75% = 2; > 85% = 3, >95% = 4, or lesser utilization at a higher rate for client-facing situations and other revenue activities whatever they might be. 20% Customer Satisfaction: Average rating from customers are: >2 =2; >3=3; >4 = 4 20% 8 InitiativesFor all 8 initiatives, working with a Jay Nussbaum or Mike Hagan = 4;For at least 4 initiatives = 3; For at least 2 initiatives, create baseline, objectives aligned with team and individual levels of each initiative group = 2

7. Measure • Determine in qualitative and quantitative terms or units what a successful innovative task or project will be like (look, feel, experience, etc.) (At any level of the corporate hierarchy).

8. Manage • Ensure that all systems (personnel, technical, operations, information, reward, performance review, etc.) methodologies and programs (diversity, organization development, training, etc.) are appropriate to support the innovation of all/some results at a minimum standard of Satisfactory.

9. Magnify • Improve all OD, training and development and management systems and programs to support standards of at least Very Good and Excellent. • Change the standards so that the measures that previously described "satisfactory" are now "not quite satisfactory", "very good" is "satisfactory", "excellent" is now "very good", and a new standard of "excellent" is created.

10. Measuring Results "COMMENTS ON THE UTILITY OF MEASURING RESULTS" "This pattern - adoption of crude performance measures, followed by protest and pressure to improve the measures, followed by the development of more sophisticated measures - is common where performance is measured. It explains why so many ... organizations have discovered that even a poor start is better then no start, and even crude measures are better than no measures. All organizations make mistakes at first. But, over time, they are usually forced to correct them". Page 156, From : Reinventing Government by David Osbourne and Ted Gaebler, Published by Addison-Wesley Publishing Company, Inc. 1993

11. Measuring Results - cont’d • "The simple act of defining measures is extremely enlightening to many organizations. Typically, [organizations] are not entirely clear about their goals, or are in fact aiming at the wrong goals. When they have to define the outcomes they want and the appropriate benchmarks to measure those outcomes, this confusion is forced into the open. People begin to ask the right questions, to redefine the problem they are trying to solve, and to diagnose that problem anew. When the measurement process starts, people immediately begin to think about the goals of the organization.” (p.147) • From: Reinventing Government by David Osbourne and Ted Gaebler, Published by Addison-Wesley Publishing Company, Inc. 1993

12. Principles of the 3M’s Approach The 3M's is Universal- Can measure anything. or “Many Metrics; One Methodology” Everything is measurable. Measure = Qualitative and Quantitative Qualitative measures can be as rigorous as the quantitative The only debate is the accuracy, frequency, scalability, specificity, etc.

13. Scalability is infinite - time, level, etc. Goals are different from Objectives. A goal is directional "Improve delivery date"; Objectives are SMART- Specific, Measurable, Achievable, Results Oriented, Time Framed “>90% on-time (specified) deliveries by 1 Oct 00” No ambiguity - no adjectives or adverbs are allowed Metrics is the easy part

14. Value = Money (In the business context; other currencies for non-business context – love, fun, pleasure, recognition, etc.) It's all about Value and Value is all about money Getting what you expected for the money you paid or …creating value for the money you get paid.

15. All objectives have team and/or individual ownership from the top to the bottom. Can assign weighted value as a weighted proportion between individual and team Rewards are based on results. Adding value is getting more than you expected for the money you paid.

16. Value is weighted as a proportion of what the innovation costs, is expected to earn and/or what you pay or get paid for. Value is about creating greater results- it's not time, effort, risk,

17. Alignment = key element of this process The interpersonal or managerial relationship is part of the objective Boss must contribute to your success Creates multidirectional alignment - hierarchical, horizontal, cross-functional Aligns four levels of authority - Approve, Decide, Consult, Inform Does not distinguishes between being accountable or doing the work oneself

18. Online application - transparent to self and others A driver of corporate culture and not just reactive. Predefined standards of performance Four standards of performance - Unsatisfactory, Satisfactory, Very Good, Excellent Aggregate - upward; Cumulative – forward AND you think this way anyway

19. Measures • Everything is measurable. The only issues are to what degree the effort has value and to what degree you want: 1. Accuracy 2. Frequency 3. Quantity 4. Quality 5. Etc..