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June 29, 2015

Measuring Results: An Interview with Douglas K. Smith

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Douglas K. Smith is the Chairman of the Board of the Rapid Results Institute, Inc. Both as a co-leader of McKinsey  and Company's worldwide organizational practice and subsequently as an independent consultant and advisor, he has crafted a variety of management innovations and disciplines including the core disciplines for team performance, horizontal organization, and performance-driven change. He authored a number of seminal articles and books, including management books such as The Wisdom of Teams, The Discipline of Teams, Make Success Measurable, and Taking Charge of Change; and other books of history (Sources of The African Past), journalism (Fumbling the Future), and social and moral philosophy (On Value and Values). Doug is the chief architect of several results-driven leadership programs and organizational transformations, including NeighborWorks Achieving Excellence, a program causing profound shifts in hundreds of affordable housing organizations across the US and The Sulzberger Program, for leaders of news organizations seeking to navigate the profound changes affecting their industry.

In your opinion, what are the key indicators of successful results in affordable housing? In the the US, in developing countries?

For any individual or family, the essential indicator of housing affordability is the percent of that individual/family's income required for the residence.  This amount must reflect all costs related to housing: the residence itself, utilities and maintenance -- EVEN TRANSPORTATION IF THAT IS ESSENTIAL TO AFFORDABILITY.  The 'affordable' percentage may vary by country.  In the US, though, it is somewhere in the vicinity of 30% of income.

With this figure, the indicator for the society in question (country, city, neighborhood and so forth) would be the actual number as well as percent of the population who live in affordable housing -- that is, how many individuals/families -- and what percent of the whole -- actually have affordable housing?

What should companies, NGOs, and governments, be measuring?

See answer to first question. This metric/goal -- number and percent who spend less than, say, 30% on all-in housing costs -- ought to be the "North Star" all companies, NGOs, governments and so forth pursue.  

In doing so, then, such enterprises and so forth should then measure/monitor the productivity -- the efficacy -- of all their various strategies and programs by asking/measuring/evaluating: Does program X or strategy & increase the number/percent who have affordable housing?  On a comparative basis, do X and Y outperform/underperform other efforts?  

With regard to this last point, though, any comparisons must be as close to apples-to-apples as possible.  A program aimed at homeless people, e.g., ought not be compared to strategies aimed at, say, first-time homebuyers.

Doug, you pointed us to SuccessMeasures.org; can you tell us about what they are and how they help with measuring impact?

I have no first hand information here -- I do know that many, many folks with whom I work think highly of Success Measures.

Do you see any progress in the use of impact metrics to alleviate poverty?

Yes.  Perhaps the most important progress of all relates to how folks/enterprises/efforts who care so deeply about alleviating poverty now recognize that goals, outcomes and related metrics are essential to their work.  That was not always the case.

What approaches do you see with NGOs like The Gates Foundation - what should they be doing differently?

Like so many others, I welcome the resources and sincerity of Gates and others who have joined in attempting to make a difference.  I also believe all such efforts would gain in impact through paying more attention to actual results-driven implementation than elegance of strategy and policy.  There is a regrettable tendency of caring, smart folks to spend more effort on solving things on paper than on the ground.  If you or others would like to learn more about on the ground, performance-driven approaches to making real impacts, I recommend visiting The Rapid Results Institute website as well as various efforts that use what I call a challenge-centric, performance-and-accountability method (e.g. Achieving Excellence, The Sulzberger Program). 

Challenge Centered Transformation Programs build on my management principles and philosophy developed with colleagues and clients over more than three decades of guiding real performance and change. These programs are highly leveraged -- that is, they invite leaders from dozens to scores of different enterprises to participate simultaneously in structured programs that produce real results. By requiring participants to identify essential challenges facing their respective enterprises -- then lead real performance against those challenges -- the programs' impacts vastly outweigh the costs. This leverage of multiple enterprise challenges proceeding simultaneously produces a return that often exceeds 25-to-1 when compared to the real costs.

Can you describe what you mean by Challenge-Centric transformation programs in more detail?

Sure. These programs are:

Challenge-centric: Participants must identify one of the most critical challenges facing their enterprises and commit to success against those challenges. Criteria are provided to ensure that the challenges selected are likely to produce significant innovation, new capacity and/or capability, growth and sustainability. In this sense, Challenge Centered Transformation Programs(SM) differ from executive education and/or leadership programs that are almost always curriculum-centric and focus mostly on personal development of participants instead of enterprise-wide transformation.

Performance-driven: Participants must commit to success. They must identify the outcome-based goals that, when achieved, answer the question, "What does success look like for this challenge?" These programs provide participants tools, frameworks and understanding for how they can and must build similar commitments to performance from the many people, both within and beyond their enterprises, whose contributions are key to success.

Personal: Challenge Centered Transformation Programs(SM) focus on enterprise not personal challenges. Yet, because the challenges identified inevitably demand more than 'business as usual', participants themselves can rarely succeed without stepping beyond their comfort zones as leaders. They must take risks -- and, in doing so, provide the intensely personal leadership demanded by real change. Participants arrive in these programs as leaders. The design and experience of the programs provide them the chance to grow further as leaders by doing something real: leading performance and change.

What other insights would you like to share in terms of measuring outcomes?

There is a profoundly important difference between actual outcomes versus metrics.  One of the essential principles of successful change is this: performance is the primary objective of change, not change.  Far too many efforts -- including but not limited to policy/strategy efforts that get stuck on design instead of actual doing -- fall into the trap of change for the sake of change.

And this trap extends to the arena of metrics themselves.  Far too often, well intended leaders recognize the importance of performance.  Yet, the path chosen is to select and implement the 'metrics' needed to monitor performance -- and that, then, leads to just another form of what I call 'activity-based' change where 'putting in the right metrics' becomes the activity in question.

Look again at the all-important North Star mentioned above: How many folks in our (nation, region, state, city, town, neighborhood, ethinic group, sociodemographic group, etc etc) have all-in housing costs less than 30% of income?

An outcome here would move the percentage from some level to a higher level.

The myriad metrics needed to monitor progress toward that outcome (metrics monitoring various strategies, inputs, intermediate outputs, etc) are all very important.  But if an effort got so involved in installing and using those metrics to the neglect, even abandonment, of the North Star outcome, then that effort would have fallen into the trap of activities versus outcomes.