1.3 the challenge of organizational measurement

There is no area of human endeavor so much in need of effective measurement as are organizations. Organizations are probably the most complex entities in the universe – composed of thousands, even millions, of components. In fact, nothing has more “moving parts” than a large business or government enterprise!

The challenge is to manage those parts strategically, synergistically, and with appropriate alignment and synchronicity to attain the desired results. Measurement is the connecting fiber that can make all the parts work together. Achieving this kind of coordination and alignment is impossible without exceptional performance measurement.

Of course, smaller, simpler businesses can get by with much less sophisticated measurement. But even the sole proprietor or small business owner needs some measurement, and as small organizations grow in size and complexity, the role of measurement becomes increasingly vital.

Furthermore, the intensely competitive marketplace today demands a level and quality of performance measurement unlike any that ever existed. In the not too distant past, making money and winning at business was much easier: Companies could establish a competitive advantage quite easily and keep it for a very long time; market strength was virtually unassailable; customers were much less demanding; and leaders could manage relatively effectively with good-enough strategies and mediocre execution. But today, “good-enough” is not good enough.

Achieving and sustaining success in today’s hyper-competitive marketplace is an ultimate challenge for any company and business leader. This is an era of unprecedented change, complexity, volatility, and risk – when
Everything seems to be moving at warp speed. There is very little room for error. The business imperative today is not just to perform excellently, but to perform excellently consistently. Organizations that understand and can
Use performance measurement to manage their strategy, systems, and processes more effectively and more consistently have found that it provides a tremendous competitive advantage.

As organizational change expert Daryl Connor said, “Never before has there been so much change so fast with such dramatic implications for the entire world.”5 Ironically, in order to adapt to change, organizations must
Become even more complex – and the more complex they become, the more difficult it is for them to be managed. And the more complexity and change there is, the more crucial measurement is. Managing a business without effective measurement is like piloting an airplane through a stormy sky without instruments. In any organization that wants to succeed today, top-notch performance measurement is no longer optional.

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1.3 the challenge of organizational measurement