Are Your Metrics Aligned to Your Strategy?

It is a basic premise of human conditioning that we are more likely to repeat behaviours that are rewarded.
Not just humans, this process of rewarding a desired behaviour is used to train your family dog as well as your children.
As an employer or leader in your workplace you may be occasionally (frequently?) disappointed that your staff don’t share your standards of performance, application, enthusiasm and striving toward the goals of your enterprise.
Human behaviour is not just a reflex or rewarded response, it is the final expression of beliefs and attitudes, coloured by an understanding of social situations and environmental influences. This is a complex pathway to navigate as an employer.
One of the most common strategies we use to help them focus in our business is to apply metrics – we measure stuff. And therein lies the risk.

A recent article in Harvard Business Review questions whether metrics can actually be counter-productive. The authors suggest that metrics are almost always flawed and can alter behaviours or decisions in ways that are not anticipated.
Harris & Taylor call this ‘surrogation’. A process where employees confuse your business strategy with what you are measuring in their performance.
Not just employees. Are you over the repeated requests for feedback from businesses you have used?
‘Stay on the line to complete a short survey’,
‘How many stars will you give us for our service or product?’,
‘Please score our service on this 10 point scale’

What was once a novelty and a chance to deliver feedback is now a time-consuming nuisance likely to turn customers off. Asking about their satisfaction levels is no substitute for actually delivering a satisfactory service. Yet happens when employees aspire for rating points when they should be focused on delivering a remarkable customer experience.
Are your employees measured on throughput or productivity? Are their Key Performance Indicators or remuneration triggers linked to the number of services delivered or dollars generated? Then in the staff room they see a mission statement promising to deliver excellence in health care to the local community. One objective is abstract and difficult to measure, the other is concrete and easily expressed in numbers. Employees will seek to meet the measurable metric with one eye on their upcoming performance review and the other on their pay packet. Leaving no eyes to focus on your business strategy or vision.

Two suggestions offered by the authors are –
1. Loosen the link between metrics & incentives
2. Use multiple metrics
The latter is a preferred option of mine, using a mix of quantitative metrics (e.g. earnings) alongside at least one qualitative metric (e.g. quality of clinical records or 6-week post-discharge satisfaction rating) and only paying incentives if both sections meet pre-determined targets.

Check your incentive and metrics systems and ensure they are aligned with the strategy and vision that drives you.

Reference
Harris M. & Tayler B. 2019. Don’t Let Metrics Undermine Your Business. Har Bus Rev Sep/Oct 2019 p63

Strategy – more than a plan

Is a business plan enough? Business plans are important tools for any owner, and in my role as a QIP practice surveyor I have seen many such plans – some brilliant and some in need of work. Not a lot of work, as most are pretty close to the mark and just need firmer time frames and outcome measures. But none of them was a strategic document. None projected a longer term vision of the business or demonstrated a purposeful system of achieving it.

Strategy is more than a list of goals and actions – more than a plan. Strategy is deeply rooted in the DNA of the business, the owner and the organisation. It is the combination of behavioural patterns, customer management, competitive advantage and the philosophy of adding and delivering value. Well, so say the academics in the field of strategy. Like Mintzberg who listed no fewer than ten ‘schools’ of strategy, or Sun Tzu (‘The Art of War’) whose work has been commandeered by business coaches and consultants often with good effect. And of course Michael Porter, a more recent guru who insists that strategy is focused on a unique mix of offerings that enhance competitive advantage.If you would like to develop a strategy for your business that provides direction and perspective in turn generating a purposeful business plan, HR plan, marketing plan, earning plan and exit plan you may benefit from two things. Firstly, an open mind on how to analyse, structure and drive your business; and secondly, some education or coaching to guide you through the process.

What options are there for your strategy? What will provide you with an advantage in the construction and delivery of your service and products, and is there a customer base who is prepared to pay what you value it at? For example, do you pursue a pricing strategy, a service strategy, a relationship strategy, a scale-efficiency strategy, a reproducing strategy, a blue-ocean strategy, a value adding strategy or, well that is enough to start with.

Once your overarching strategy is decided and the economic value established we can turn to how you can outperform, outlast and outwit your competition – yes I borrowed that from Survivor on TV: the ultimate strategy game. Or you could study Game of Thrones instead (drastic business plans), or perhaps House of Cards is a more palatable model with less killing but equally ruthless. But I digress. What you need to develop is:

  • A clear understanding of how strategy arches over every business decision, process and product that you make.
  • Knowledge of where your specific competitive advantage lies and how to maximise it.
  • Ideas galore to transfer to your business plan to ensure your strategic intent is reflected in your activities and outcome measures.
  • A practical appreciation of brand consistency, where your value adding occurs and how to price it.
  • Examples of implementing strategy in your finance, HR, team building and leadership activities.
  • Finally, a renewed enthusiasm for your business and your ability to actively manage it to success.

The Practitioner Business Academy may be a good place to start.

Career Pivots

Rarely is a career  path linear, rational and smooth. More often it is a series of shifts, skips, leaps, back-steps and triumphs. Mine was. And still is.

For health practitioners there are several critical shifts during a typical career that occur within the same discipline or line of work rather than stepping out on a new path. They are events where one foot is firmly kept in the same job-frame while the other foot is swung into a new area of application. A career pivot.

Career Pivots

I am interested in five distinct career pivots for health practitioners which occur in a typical career progression:

University into Private Practice
Being an excellent student may not easily transfer into being an excellent clinician, employee or work colleague. There are things to know, understand, apply and improve to ensure you are productive, effective and engaged.

Hospital or Public Health into Private Practice
Moving from a public health setting into a private health business is a challenging cultural and environmental transition. There are things to un-learn and more to learn about applying your clinical expertise in the new framework.

Equity in Private Practice
You may buy into a practice (whole or part) or start a private practice from scratch.  Either way you will need to understand finance, governance, work-place law, risk management, leadership, culture and many more areas not obvious to the expert clinician. 

Growing a Private Practice
Organic growth, mergers, acquisitions, service extensions, franchising, sub-leasing – the list of ways to grow is long, and understanding how to manage growth toward a strategic goal is critical.

Exiting a Private Practice
The final goal or simply another career transition that will be best served through maximising the price and attractiveness of your business. How to add value to attract a premium purchaser should be your pre-occupation. 

Obviously the missing link is University into Hospital or Public Health as a first career move. This pivot is not my area of expertise, despite it being the first move I made when graduating.

During 2019 the Practitioner Business Academy will be rolling out a series of career development workshops and seminars focusing on these career Pivot Points. The learning outcomes are designed to enable success for the practitioner as he or she negotiates new work places, cultures, skill-sets and leadership models. Success for all – the practitioner, their clients and their employees or colleagues

The process will involve a combination of face-to-face seminars, online training and self-guided learning. The benefits will accrue to the participant and be transferable as their career continues to evolve, and also to the employer(s) current and future.

More information will be posted as the program develops, events are scheduled and interest grows.

Regards,

Craig Allingham Exec.MBA, APAM
Director, Practitioner Business Academy

The Professional in Business

Being a professional is no guarantee of being successful in business. In my experience, mainly in the health domain, the technical training and skills can often work against the principles of business excellence. Or at least compete against them to the possible detriment of both.

It doesn’t have to be so. It is possible to maintain professional excellence while achieving successful business outcomes. But you won’t find the expertise, information and systems you need in the journals and newsletters of your core discipline.