Managing Butterfly Effects

Managing Butterfly Effects

What you can’t measure you can’t control. This is a long-standing quote. How true is it so that we have adhered to this managerial concept for long times? I attended last week a conference on the “Fingerprint of Change” and on speaker promoted the use of Key Performance Indicators (KPIs). The KPI he didn’t notice was how distracted the audience were during his presentation.

The focus on KPIs has led us astray more often than not. Human organizations are complex. Even an organization may be engaged in a simple process to produce a service or product; yet the relationship between the staff, the staff and customers and the organization with suppliers and the outside world shall not be simple. To assume simplicity because one process is simple is underestimating reality. KPIs work for simple and linear processes, but not for complex ones.

Let me explain by example, which I used in one of my presentations. It is related to employee engagement. Here is the reproduction of my main thinking:

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I highlighted disengagement for a reason. Disengagement has a cascading effect. Disengaged employees will not be responsive to customers, will make the organization disengaged, careless and so sales shall drop, customers shell churn and talents to leave the organization. These negative effects shall lead to unpredictable and significant losses.

I want to give an example to verify more. Only few days ago a Jordanian citizen complained about a telecommunication company for the employees weren’t responsive to his complaints that his supposedly 4G internet was very slow. He registered his complain on the company’s page. All of a sudden a hashtag was coined and spread like fire in dry wood. It became a hilarious story as competitors took advantage and used the hashtag to offer help for the complaining customer. Some restaurants and clothing shops offered discounts for the carriers of a coupon they published using the hashtag. Not only that, people from the region started wondering why the telecom company treated its customer the way it did. The hashtag became trendy on Twitter.

My question is which KPI would measure the losses of a company because of one complaining customer? To assume that we may apply KPIs to complex human organizations to monitor and control performance is a way of over-simplification.

We need to understand that minor human actions may lead to unthinkable consequences. We are used to linear thinking and we need get rid if this habit. For example, our acceptance of Maslow’s Pyramid of needs in a way is linear because we assume that one a need is satisfied then we look for satisfying the next one. This is not reality. If an employee wants to work on areas of his interest and is allowed to then this employee shall be engaged. Allowing employees to self-organize around areas of interest to them could be far more rewarding than increasing their salaries (depending in which part of the world we live in). KPIs shall measure output and input, but the results may be a small factor generating a huge impact on the long-run.
Two simple questions to end this buzz- can we measure performance in complex organizations? Is there an organization that is really simple enough to allow for the use of performance indicators?


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Ali 🐝 Anani, Brand Ambassador @beBee

#56
With all honesty my friend is that I have attended lectures by the same person addressing it to widely different sectors. Not a single slide changes or the content of any slide. What applies to banks applies to research institutes. It is not realizing that SMART KPIs are not applicable to all industries that provoked me to write the buzz. This is the sad part of the story.

Ali 🐝 Anani, Brand Ambassador @beBee

#54
Your great comment makes me joyful and not feel any pain.I loved your approach and the example of having one part of my body in the freezer and the other part in the oven. Your experience in measurement must be unique and I wonder if you could share it. If you do please tag me.

Alan Culler

Alan Culler

4 years ago #46

#52
I absolutely agree Ali \ud83d\udc1d Anani, Brand Ambassador @beBee Uncertainty increases with the time horizon and with complexity. The two factors are multiplicative not additive, which means an exponential function mitigating accuracy. However, that means we must account for the uncertainty and complexity in measurement systems checking inputs early and often so that outputs can be more predictable. Many businesses and many process owners within businesses actually manage this quite well. But this is managing measures in aggregate which does not translate to individual performance management. "If you head is in the freezer and your feet are on the oven, on average you're about the right temperature." You're also in pain. 😳

Ali 🐝 Anani, Brand Ambassador @beBee

#48
These are some of the issues that KPIs don't address even though they are vital for the survival of a business, the least to say. So, within this context I agree completely with your comment Louise Smith

Ali 🐝 Anani, Brand Ambassador @beBee

#47
For short term objectives I agree, Even in very complex system if we where we stand today then we may know where we stand tomorrow. The issue as time span gets longer we start observing deviations and unpredictability. Like the weather forecast, we may forecast it for three days ahead with I believe around 80% accuracy. Now, extend the time to six months and I then challenge the value of forecasts.

Louise Smith

Louise Smith

4 years ago #43

#50
My client has quite a good plan to cope ! Someone else could have the Christmas party and not invite the boss = YES it's been done before !

Alan Culler

Alan Culler

4 years ago #42

#48
@Louise Smith Numbers without relationships clearly only work with robots. I am not an algorithm. Probably most people aren't despite what Google and Amazon think. Your client's options would seem binary mutiny or depart, but perhaps an insidious resistance an educating the corporate overlords might also be an avenue. Someone else could have the Christmas part and not invite the boss. 😎

Louise Smith

Louise Smith

4 years ago #41

#41
Like the newer workplace model of Google https://www.theguardian.com/careers/2016/feb/11/is-googles-model-of-the-creative-workplace-the-future-of-the-office

Louise Smith

Louise Smith

4 years ago #40

#40
E. "So to me the measurements are secondary to climate -(High clarity and high responsibility) and a culture of customer care driven by leaders who model care -of everyone they come in contact with -customers, staff, suppliers, and community." I recently had a client return who previously was very happy at work but now is not. Why? The business he works for was a large family business he had been with since the start and the boss was a family friend. It was bought out by a large corporate entity and work became about sales figures and $. He feels completely disenfranchised ! From a valuable team member with an excellent sales history to just another number ! His new immediate boss doesn't know the system well and is cold or corporate. My client feels like he is at see without a compass and no encouraging feedback to help him navigate. His sales colleagues who have been there for a while feel the same. He could trust his previous boss and knew he could rely on him for help at work and out of work. What went around, came around. It's a huge loss ! Also no work Christmas party this year.

Alan Culler

Alan Culler

4 years ago #39

#42
Ali \ud83d\udc1d Anani, Brand Ambassador @beBee I firmly believe that consultants should focus first on "do no harm" to quote Hippocrates Then they should focus on being helpful. But metrics and measurement in and of themselves are not bad things; they are the foundation of improvement. My scale and Fitbit help me track pounds and steps yesterday vs today, but in and of themselves they are impotent, unless I take action and build habit "eat less, move more, Stay out of the Haagen Dax's." 😄

Ali 🐝 Anani, Brand Ambassador @beBee

#44
Thank you dear Sara Jacobovici for your grand sharing of the buzz

Ali 🐝 Anani, Brand Ambassador @beBee

#43
Thank you dear Sara Jacobovici made great comments that brought broadened my idea of discussing the spontaneity of our habits, and mainly those of leaders. Is there a time factor in spontaneity? I tried to answer this question in my new buzz which I am uploading in few minutes. I need your brains Sara to enrich one of the most challenging to write a buzz that I have encountered.

Sara Jacobovici

Sara Jacobovici

4 years ago #36

Ali \ud83d\udc1d Anani, Brand Ambassador @beBee writes: "Human organizations are complex. Even an organization may be engaged in a simple process to produce a service or product; yet the relationship between the staff, the staff and customers and the organization with suppliers and the outside world shall not be simple."

Sara Jacobovici

Sara Jacobovici

4 years ago #35

Dear Ali \ud83d\udc1d Anani, Brand Ambassador @beBee, I come into this discussion late. I will first leave my comment and return to what I know is an invaluable discussion. I want to say that I find your buzz a piece that should be in every company resource book, especially during assessment times. I don't wish to isolate any line as your buzz is complete and needs to be read whole. I am personally privileged to have seen the ideas you present here unfold over time. Much learning is taking place. On a personal note, what I was reading between the lines was how "time" is a factor in this discussion.

Ali 🐝 Anani, Brand Ambassador @beBee

Agai Alan Culler- tour keypoints@5 and 6 resonate with me and I agree. Great points for discussions and I find your call very sound and critical to respond to. "tracking individual satisfaction misses a larger point..."- this is a hugely interesting point and I doubt if it has been searched with enough attention. Yes, these are signs of healthy or ill organizations and much more to to do with it than an individual employee. Again- your ideas expressed in D % E are sharp and are worthy of probing into. Your emphasis on the general climate of business is truly hitting the nail on its head. Thank you for detailing your ideas with such clarity and open expression. Unfortunately, there are consultants selling their expertise in advocating KPIs and they waste so much time selling the wrong products at very high prices!!! I am deeply thankful for you, Alan.

Ali 🐝 Anani, Brand Ambassador @beBee

#39
I agree with you my friend Alan Culler. One point is your point #3. I believe creativity here is needed to get at least the trend of these emotional factors. As for the rst, I see eye to eye with you.

Alan Culler

Alan Culler

4 years ago #32

Hello again Ali \ud83d\udc1d Anani, Brand Ambassador @beBee So many thought starters. Thank you More points of agreement: 5. Speeches about KPIs are inherently boring whether by consultants or managers holding forth -very disengaging. 6,There is a scientifically proven correlation between employee climate and customer climate -see Ben Schneider U of Maryland. Employee engagement is one variable visible to customers, but by no means the only one. More Points of discussion: B. There are some quite good measures of customer service -J.D. Power and customer loyalty (Fred Reischald's net promote score) -But they work only in the aggregate not on an individual basis -so your very angry telco customer would be invisible. C. However someone who handled that call knew the customer wasn't happy. I could imagine asking CSRs to project individual customer satisfaction and compare sames of individuals to the CSR projections, but tracking individual satisfaction misses a larger point; D. Measuring Customer satisfaction without the freedom to act is useless at best and destuctive at worst. E. So to me the measurements are secondary to climate -(High clarity and high responsibility) and and a culture of customer car diven by leaders who model care -of everyone they come in contact with -customers, staff, suppliers, and community. Sorry to be so long winded - and thanks again fr staring me thinking.

Alan Culler

Alan Culler

4 years ago #31

Ali \ud83d\udc1d Anani, Brand Ambassador @beBee Great post! Many ideas here that start me thinking. First some points of agreement: 1. In the US telecoms and cable TV companies have the worst customer service of anyone -sorry to hear that is an international phenomenon. 2. One dissatisfied customer can do more damage than 1000 silent, but satisfied customers. 3. Measurement of transactional processes that involve emotional labor is difficult (but not impossible) 4. Categories of emotional needs (whether Maslow's hierarchy or McClelland's motive needs) are not mutually exclusive categories with a clean bright line between them. I think these are meant as conceptual models that do not lend themselves to metrics in organizations. Points of discussion: A. The very words Key Performance Indicators demonstrate how far common usage of KPIs have strayed from the original inten. KPIs (Revenue growth, ROI, Customer satisfaction, Organizational climate) were meant to be the critical few metrics that indicated the health of a business. Then they morphed into the critical few functional metrics, then process metrics and now have become the trivial many measures such that many of s work in organizations with thousands of KPIs.

Ali 🐝 Anani, Brand Ambassador @beBee

#37
I agree Pascal Derrien. I must add that KPIs should also cater for intangibles such as employees engagement and attitudes. These factors could be more telling than mechanically-driven KPIs

Pascal Derrien

Pascal Derrien

4 years ago #29

I think when a KPI is simple in its calculation and straightforward it is efficient when you add complexity in its calculation such as weighting and other corpo deviations the org has already acknowledged (sometimes without knowing it) the partial irrelevance, subjectivity and inefficiency of its measure, they are grey areas which no numbers can stick to because they simply cant ....

Ali 🐝 Anani, Brand Ambassador @beBee

#35
Will do my friend Tausif Mundrawala. Ideas are still brewing in my mind. Two days more

Ali 🐝 Anani, Brand Ambassador @beBee

#33
Thank you my dear Tausif Mundrawala. I think my next buzz will provide a better response than I can add here. I say that you are on the right track.

Liesbeth Leysen, MSc. beBee Global Brand Ambassador

#31
I actually was also very busy the last days Ali \ud83d\udc1d Anani, Brand Ambassador @beBee so yes, the honey is in process.

Ali 🐝 Anani, Brand Ambassador @beBee

#30
Then I hope you are too busy my friend to generate more honey

Liesbeth Leysen, MSc. beBee Global Brand Ambassador

#28
happy to read that you were busy, that is always good, that is where we generate honey to bring back to our beBee world!

Ali 🐝 Anani, Brand Ambassador @beBee

#26
Great questions and you add to my desire to explore the issues of my next buzz with eagerness. I am still working my way through a pile of ideas. One idea is smoking habit. People smoke spontaneously without thinking about the consequences or risks. What makes smoking a habit? What are the driving forces? In chemical reactions spontaneity comes from increasing entropy and releasing energy. Sometimes, the two are working in opposite directions. Is risk-avoidance is energy consuming? Is it more consuming than risk-taking? I am just sharing some "draft ideas" because they haven't crystallized yet. You keep me on my toes Harvey Lloyd

Ali 🐝 Anani, Brand Ambassador @beBee

#25
Thank you for your comment and sharing the buzz. I have been terribly busy lately to read all your buzzes, but soon shall read at least one of them to enjoy your writing style.

Ali 🐝 Anani, Brand Ambassador @beBee

#24
To say that I am not surprised that you aren't people-oriented is lying Joyce \ud83d\udc1d Bowen Brand Ambassador @ beBee. I am not disappointed with you; rather with myself for failing completely to predict you aren't. Your head may still be in the clouds, but the clouds are raining with your wisdom.

Harvey Lloyd

Harvey Lloyd

4 years ago #20

#23
I like the thoughts of your next post. I would pose the following question though. Do leaders create spontaneity or does spontaneity arise by fate? I have always sensed that opportunity is created by leaders that seek a landscape of "win/win". Within this creation the law of unintended consequences tends to play in your favor of opportunity. The opposite of creation is risk avoidance. Yes we eliminate risk, but the law of unintended consequences is now working against you by only presenting new risk. Again, can we cause opportunity through our actions or is it really just fate and spontaneity? Food for thought as you launch the next post.

Liesbeth Leysen, MSc. beBee Global Brand Ambassador

When there is an intention to measure performance and actions taken in that direction, there are opportunities for improvement, so good questions here, every company needs to reflect on that, wonderful post Ali \ud83d\udc1d Anani, Brand Ambassador @beBee

Joyce 🐝 Bowen Brand Ambassador @ beBee

Fortunately, I was buried deep in the hierarchy of things and seldom had to deal with customers. There was most often a buffer between me and Them. I was never really a people person. I do remember times when it was necessary. I hope I did not disappoint. My head was in the clouds even then. But the people involved in customer contact should be exemplary.

Ali 🐝 Anani, Brand Ambassador @beBee

#22
Synchronicity again Harvey Lloyd. I was just thinking about spontaneous reactions and spontaneous habits and how they relate. This topic overwhelmed my mind today. Do leaders take the paths of least resistance because they don't have much to worry about? Or, because they tend to avoid risk? Leading by habits is an issue that you bring to my mind. This is going to be my next buzz- it shall center around "Spontaneous Leadership". I am sure you have some thoughts to share in advance. "If actions going forward from many perspectives"- as you mentioned, then to what degree those actions can be spontaneous? Interesting comment as always my fried and I am also happy that you referred to the outstanding comment of Jerry Fletcher

Harvey Lloyd

Harvey Lloyd

4 years ago #16

The comments here on your post Ali \ud83d\udc1d Anani, Brand Ambassador @beBee have been expanding. The "Fingerprint" here is something that seems to point towards the multi-faceted aspects of leadership. Reduced to measuring risk against opportunity. Leadership is always taking the best from many and navigating a future towards an outcome. Jerry Fletcher's comment was the most important as we look at perspective. Leaders cant side with any risk or potential but rather must look at the actions going forward from many perspectives.

Ali 🐝 Anani, Brand Ambassador @beBee

#18
This is a great comment dear Ned McDonnell. You bring up two extremely relevant points. The interpretation and use of KPIs may differ between the person who formulated them and the person who applied them. Equally important is the possibility of overlooking the risk factors. Yes, this is a valid point and we know of many companies that lost great possibilities because of their blind focus on risk factors.

Ali 🐝 Anani, Brand Ambassador @beBee

#17
I concur fully with your wise comment dear Jerry Fletcher. I love your idea that we need to view problems from other spaces. May be then our spacetime of the problem would change to. I don't think this idea has been explored in any depth and it seems to me is worthy of further consideration.

Ali 🐝 Anani, Brand Ambassador @beBee

#16
Thank you Claudio Vetica. I agree with you that KPIs may serve only indicators. I like your simplification and reference to the need to avoid using KPIs for decision-making.

Jerry Fletcher

Jerry Fletcher

4 years ago #12

Ali, Fascinating as usual. Your mention of Maslow's theory pulled up a memory of the early days of the theory when the physiological needs were considered to be food and water and shelter. A science fiction writer noted that before all else humans need air. Imagining the problem/situation/ area of interest as if you were on another rock in space will change your perspective...guaranteed.

Ali 🐝 Anani, Brand Ambassador @beBee

#14
Thank you for integrating the comments in such a fabulous way

Ali 🐝 Anani, Brand Ambassador @beBee

#10
I wonder to what extent you depend on KPIs in your work ! Your profession works within rules and your experience must be special.

Ali 🐝 Anani, Brand Ambassador @beBee

#9
Nostalgia only for the past is my answer to your great and challenging question Harvey Lloyd. You know well that in complex systems the future is far from the extrapolation of the past. We tend to assume it is because we want to stay in control of the uncontrollable. If we have all the data about the climate in an area what these data predict the future climate? The answer is simply no. So is the business environment. A little complaint from a university student that sounded like a butterfly flapping its wings ended up in a huge embarrassment for a leading telecom company here. If based on previous complaints the extension to the future will say the complaint is insignificant. Reality is different. We don't measure the future by measuring the past.

Harvey Lloyd

Harvey Lloyd

4 years ago #8

#8
KPI's and other such measurements are measuring the past. True leaders determine a future within the framework of past experience and wisdom gained. Keep in mind, describing the past carries no risk. KPI's can justify our wisdom, position and proclamations of the past. When we here someone who speaks to the future from a creative perspective of wisdom, we get excited and want to be a part. KPI's place boundaries on the future. Wisdom builds a future that we can all find success. I only lived in the corporate world a short period during my early years. The reams of reports and three hour meetings about the past always left me wanting. Begging the question, what do you want to do now? Why do we clutter our future landscape with landmines of the past? I pose the following question: If the talent of the team is represented in the meeting; and the team is aware of the past as they lived it; and we want creative proactive concepts from the meeting; why would spend three hours talking about KPI's?

Ali 🐝 Anani, Brand Ambassador @beBee

#7
SImply I am in love of your great comment Harvey Lloyd. Honestly, to take a segment of your comment to focus on is undermining the wholeness of the comment. Your insight is so integrated that it shall be a shame not to share it on a wider scale. I am just thinking how?

Harvey Lloyd

Harvey Lloyd

4 years ago #6

KPI's like many other measuring matrixs found in business are important, but like the symphony no one instrument is more important than another. We need all of the instruments to make a pleasing and engaging sound. The instruments of business are a framework or foundation from which we build something greater than the sum of the parts. We as humans gravitate towards what we can measure because math allows us to see change. This can also blind us to the real aspect of success, people. Maslows hierarchy is linear when we consider a single human, but can be expanded into a three dimensional fractal when considering our team. How you put together the individaul pyramids into a matrix is the creative aspect of success. We can establsih goals from any measure of economic landscape, then the real work begins. Aligning the human needs with the goal. There are no KPI's for this task. Great observations and post.

Ali 🐝 Anani, Brand Ambassador @beBee

#5
yes, I and I agree fully with you @girish sharma that we need to trash down reductive systems. They are simply misleading.

Ali 🐝 Anani, Brand Ambassador @beBee

#3
I just you were in the session to observe what I observed my dear Lisa Vanderburg. Yes, there are many theory boxes that got outdated, but unfortunately are still deeply rooted in our "thinking habits". Equally unfortunate is that the longer we own them, the more difficult it gets to bury these boxes.

Lisa Vanderburg L

Lisa Vanderburg

4 years ago #3

Boxes. The minute you try to contain 'theories' into boxes, you may as well bury them; they become 'pat answers' and it's reflected through the speaker to his already-lost audience. A brilliant observation Ali \ud83d\udc1d Anani, Brand Ambassador @beBee! I can't begin to answer your questions, but I can share this; there's always MORE we can learn from you!

Ali 🐝 Anani, Brand Ambassador @beBee

#1
Thank you dear Debasish Majumder for your comment and sharie. Yes, people needs vary sometimes depending where they live

Debasish Majumder

Debasish Majumder

4 years ago #1

depending on which part of the world we are living is the primary concern sir Ali \ud83d\udc1d Anani, Brand Ambassador @beBee! absolutely relevant point. enjoyed read and shared. thank you very much for the share.

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