1.

LessonsfromAliceinWonderland
WecanlearnwonderfullessonsfromthecleverliterarycharactersLewisCarrollcreated.
TheexchangebetweenAliceandtheCheshireCatillustratestheneedforpurposeand
contextinthedecisionmakingprocess.Weoftenfacepivotaldecisions atwork,but
withoutempiricalinsight,wereleftaimlesslychasingwhiterabbits.
Thetermsmetricandkeyperformanceindicator(KPI)havebeenoverusedtothepoint
wheretheyvelostmuchoftheirdifferentiationandareoftenusedinterchangeably.Inan
environmentwherewehaveaccesstoanunprecedentedbreadthofdata,wecaneasily
feeloverwhelmedinknowingwheretofocus.Itsimportanttounderstand,however,that
justbecausewehavetheabilitytomeasuresomethingdoesnotmeanitwillinherently
providevalue.
Ametricissimplyadatapoint.Withoutcontext,thisnumberdoesnotcommunicate
whetherwearedoingwellorunderachievingandtherefore,whetherornotweshouldact.
AKPI,ontheotherhand,appliesstrategiccontexttoametrictodelivermeaningful
informationfromwhichfactbaseddecisionscanbemade.
Whenviewingametric,weimmediatelytrytodetermineifthenumberisgoodorbad.
Shouldthenumberbehigherorlower?Sometimestheanswerisnotthatstraightforward.
Takethemonthlycriticalsparesgrowthmetricasanexample.Itisameasureofthe
monthovermonthrelativegrowthofvalueforinventoryidentifiedascriticalsparesfora
givenstoreroom.Generallyspeaking,thevalueshouldbeclosetozeroandremainhighly
stable.Butundersomecircumstances,ahighernumberisnotonlyexpected,butdesired.
Inothercases,currentinitiativesandoperationsshoulddeliveranumberlessthanzero.
So,howdowedefinewhetherthisisametricoraKPI?Perhapsthebestwaytodefinea
KPIisbydeconstructingitsthreeelements:key,performanceandindicator.
Key
Organizationsareuniqueandeachmaturesatitsownpace,soitisexpectedthateach
organizationwouldfocusongoalsspecifictoitsenvironment.Inthatvein,ametricmust
be key to the organization. Not all metrics can be key. There must be a clear
understandingwhythisnumberisimportant,whytheestablishedtargetsandthresholds
should be met, and the consequences of not meeting the targets and thresholds. At
executive levels within an organization, these can be straightforward measures, like
revenue,earnings,margins,etc.Atlowerlevels,however,itismoredifficulttocorrelate
measureswithstrategicobjectives.
Inthepreviousmetricexample,whatstheimpactofhighmonthlycriticalsparegrowth?
Therootcausemaybethatwarehousemanagersarecircumventingstockingpoliciesby
labelingmoreitemsascritical,orthereistrulyastrategicnecessitytoinvestadditional
resourcesincriticalspares.Ifgrowthistiedtoaspecificstrategy,whatisthegoalthe

strategyisintendedtosupportandhowdoesthatcorrelatewithhigherlevelmeasures,
such as earnings? We should strive to define measures that support lower level,
operationalimprovement,whileretainingrelevanceattheenterpriselevel.
KPIsinherentlyhavealifecycle.Asorganizationsmature,theymustreevaluatewhat
theyremeasuring,howandwhy.Someorganizationalobjectivesarefinite,soitdoesnt
makesensetomanageallKPIsperpetually.ButevenKPIstiedtoperennialobjectives
mustbereviewedperiodicallyforrelevanceandaccuracy.Inotherwords,doesitmake
sensetocontinuemeasuringperformanceinthisareaandisthecurrentcalculationstill
valid? As Alice points out, were different than we were yesterday. We shouldnt
continuetomeasureourperformancewiththesamemetricswevealwaysused.
Performance
TheRedQueenunderstandsthatwecantexpecttoimproveifwecontinuetooperate
statusquo.AKPImustserveasacatalystforactiontoimprovethebusinessthrough
threeprimarychannels:
1. Validation of business objectives by visualizingperformance that directly
supportsspecificgoals.
2. Exposure of process risks by activelycomparing planned versus actual
performance.
3. Identificationofcoachingopportunitiesbydetectingandalertingtherightpeople
ofnonconformanceeventsortrends.
In order for a metric to be a KPI, it must provide a means to measure and impact
performance.Toaccomplishthis,therearetwokeyfactorsnecessarytoassociatewith
themetric:agoalandatimeframe.Thiscanmanifestitselfasatargetanddate(e.g.,
lowermonthlycriticalsparegrowthto.5%bytheendofJuly)orathresholdanddate
range (e.g., maintain monthly critical spare growth between 0.5% and 0.5% for the
summermonths).Withagoalandtimeframe,anorganizationcandetermineifitis
underperformingandcanreactappropriately.Betteryet,theorganizationcanproactively
implementinitiativesandmonitoritsprogressinpursuitofthegoal.
Applyingtrendstometricsprovidesmeaningful,directionalcontextandcanpotentially
highlightcorrelationstoinitiatives(e.g.,thenumberhasrisenconsistentlyoverthelast
12months,thesummermonthsarealways15%higher,etc.).Butlookingintherearview
mirrorisnotastandalonestrategyfordrivingcontinuousperformance.
Indicator
Finally,inorderforametrictobeaKPI,itmustbeanindicator.Aliceunderstandsthat
beingshownsomethingprovidesmuchgreatercontext.Themetricmustbealignedwith

thebusinessbyhavingaconsistentandagreedtodefinitionthatindicatesthestateor
levelofaprocess.Ameasure,suchasmonthlycriticalsparesgrowth,doesnotmean
much unless we know how critical spares are defined; and means even less if that
definition is not consistently applied across the enterprise. Its that consistency that
fostersconfidenceintheresults.Withoutconfidenceinthedata,onecanneverexpectto
achievepervasiveuseradoption.
Perhaps most importantly, an indicatormust communicate some degreeof insight.
Simplerecordcountsarethestartingpointformanyorganizations,butinreality,they
conveyverylittle.Ratios,durations,effortandcostsprovidemuchgreaterinsightand
potentiallyallowforpragmaticcomparisonsbetweendifferentpartsoftheorganization.
Indicatorsgenerallyfallintooneofthreecategories:
1. CapacityIndicators,whichmeasurethroughputorgenerationofdeliverablesfor
theorganization,suchasunitsproduced.
2. Process Indicators, which can trendorganizational maturity in areas,such as
safetyorprocessadoptionrates.
3. Outcome Indicators, which measurethe end result, such as increasedrevenue,
decreasedcosts,orimprovedcustomersatisfaction.
Understandingthecategoryoftheindicatorcanhelpdefinethevisualizationcomponents
andtechniquesneededtobestconveythedesiredmessage.
Conclusion
Itsnotuncommonforanorganizationtofearopennessandtransparency,butwecanall
learnfromtheMarchHaresadvice.KPIs,unlikemetrics,mustclearlyidentifywherewe
wanttogo,whenweexpecttogetthereandhowwearecurrentlyperforming,allwhile
providingactionableopportunitiesalongthewaytoensurewereachourdestination.
MetricsareindeedthecentralcomponentsofKPIs.Eveniftheyarenotworthyenoughto
beaKPI,theystillprovideintrinsicvaluewhenleveragedappropriately.Metricscanbe
usedtobothestablishbaselines andidentifyopportunities forimprovement.Through
leveragingastructuredperformancemanagementmethodology,ametriccanevolveinto
aKPIwhen:

Itclearlyindicatesprogress(orlackthereof),accomplishment,aproblemarea,an
opportunity,orsomethingmeaningful.

Therelationshipofthemeasuretokeyobjectivesisidentified.

Atargetorthresholdisidentifiedandtheactionsandplannedreactionsnecessary
todriveperformanceareestablished.

Ifanorganizationis notbasedonacultureoffactbasedconclusions,decisions will

continue to be derived from a gut feeling. But rather than focusing on hitting the
numbers, metrics should genuinely reflect the business processes themselves.
OrganizationsshouldleverageKPIsfromthetoptothebottomofthedecisionmaking
hierarchy,replicatingsuccessesthroughouttheorganization.
References:
1.Carroll,Lewis.AlicesAdventuresinWonderland.UnitedKingdom:Macmillan,1865.
2.Carroll,Lewis.ThroughtheLookingGlass.UnitedKingdom:Macmillan,1871.
2.

The Effective Executive

Forward by Jim Collins
replacethequestforsuccesswiththequestforcontribution.Thecriticalquestionis
not,Howcanyouachieve?butWhatcanyoucontribute?(x)
Druckersowncontributionwasnotasingleidea,butratheranentirebodyofworkthat
hasonegiganticadvantage:nearlyallofitisessentiallyright.(x)
Therearetwowaystochangetheworld:withthe pen (theuseofideas)andwiththe
sword(theuseofpower).(x)
For free society to function we must have highperforming, autonomous institutions
spreadthroughout;withoutthat,theonlyworkablealternativeistotalitarianism.(xi)
1 Effectiveness Can Be Learned
Butthereseemstobelittlecorrelationbetweenamanseffectivenessandhisintelligence,
his imagination or his knowledge. Intelligence, imagination, and knowledge are
essentialresources,butonlyeffectivenessconvertsthemintoresults.(1)
Fortheauthorityofknowledgeissurelyaslegitimateastheauthorityofposition.(8)
Therealitiesoftheexecutivessituationbothdemandeffectivenessfromhimandmake
effectivenessexceedinglydifficulttoachieve.(9)
Theexecutiveinorganizationisinfourmajorrealitiesoverwhichhehasessentiallyno
control.
1. The executives time tends to belong to everybody else.
2. Executives are forced to keep on operating unless they take
positive action to change the reality in which they live and work.

3. The third reality pushing the executive toward ineffectiveness is

that he is within an organization. Organization is a means of
multiplying the strength of an individual. (12)
4. Finally, the executive is within an organization.
theorganizationisanabstraction.therearenoresultswithintheorganization.All
theresultsareontheoutside.(13)
The higher up in the organization he goes, the more will his attention be drawn to
problemsandchallengesoftheinsideratherthantoeventsontheoutside.(14)
Anorganization,asocialartifact,isverydifferentfromabiologicalorganism.Yetit
standsunderthelawthatgovernsthestructureandsizeofanimalsandplants:thesurface
goesupwiththesquareoftheradius,butthemassgrowswiththecube.Thelargerthe
animalbecomes,themoreresourceshavetobedevotedtothemassandtotheinternal
tasks,tocirculationandinformation,tothenervoussystem,andsoon.(14)
Anorganizationisnot,likeananimal,anendinitself,andsuccessfulbythemereactof
perpetuatingthespecies.Anorganizationisanorganofsocietyandfulfillsitselfbythe
contributionitmakestotheoutsideenvironment.Andyetthebiggerandapparentlymore
successfulanorganizationgetstobe,themorewillinsideeventstendtoengagethe
interests,theenergies,andtheabilitiesoftheexecutivetotheexclusionofhisrealtasks
andhisrealeffectivenessintheoutside.(1415)
Thetrulyimportanteventsontheoutsidearenotthetrends.Theyarechangesinthe
trends.(16)
Theexperienceofthehumanraceindicatesstronglythattheonlypersoninabundant
supplyisthe universalincompetent.Wewillthereforehavetostaffourorganizations
withpeoplewhoatbestexcelinoneoftheseabilities.(17)
thereisnoeffectivepersonality.(20)
Whatalltheseeffectiveexecutiveshaveincommonisthepracticesthatmakeeffective
whatevertheyhaveandwhatevertheyare.Andthesepracticesarethesame,whetherthe
effective executive works in a business or in a government agency, as hospital
administratororasuniversitydean.(21)
Effectiveness,inotherwordsisahabit,thatisacomplexofpractices.(21)Practicesone
learnsbypractisingandpractisingandpractisingagain.(22)
There are essentially five practices five such habits of the mind that have to be
acquiredtobeaneffectiveexecutive,
1. Effective executives know where their time goes.

2. Effective executives focus on outward contributions.

3. Effective executives build on strengths.
4. Effective executives concentrate on the few major areas where
superior performance will produce outstanding results.
5. Effective executives finally make effective decisions.
2 Know Thy Time
Thisthreestepprocess:

recording time;

managing time; and

consolidating time

isthefoundationofexecutiveeffectiveness.(24)
Tobeeffective,everyknowledgeworker,andespeciallyeveryexecutive,thereforeneeds
tobeabletodisposeoftimeinfairlylargechunks.(28)
Itisamazinghowmanythingsbusypeoplearedoingthatneverwillbemissed.(34)
Meetingsarebydefinitionaconcessiontodeficientorganization.Foroneeithermeetsor
oneworks.Onecannotdobothatthesametime.Inanideallydesignedstructure(which
inachangingworldisofcourseonlyadream)therewouldbenomeetings.Everybody
wouldknowwhatheneedstoknowtodohisjob.Everyonewouldhavetheresources
availabletohimtodohisjob.Wemeetbecausepeopleholdingdifferentjobshaveto
cooperatetogetaspecifictaskdone.Wemeetbecausetheknowledgeandexperience
neededinaspecificsituationarenotavailableinonehead,buthavetobepiecedtogether
outoftheexperienceandknowledgeofseveralpeople.(4142)
Anundirectedmeetingisnotjustanuisance;itisadanger.(42)
Theanalysisofonestime,moreover,istheoneeasilyaccessibleandyetsystematicway
toanalyseonesworkandtothinkthroughwhatreallymattersinit.(49)
3 What Can I Contribute?
WhatcanIcontributethatwillsignificantlyaffecttheperformanceandtheresultsofthe
institutionIserve?Hisstressisonresponsibility.(50)
The man who focuses on efforts and who stresses his downward authority is a
subordinate no matter how exalted his title and rank. But the man who focuses on
contributionandwhotakesresponsibilityforresultsnomatterhowjunior,is,inthemost

literal sense of the phrase, top management. He holds himself accountable for the
performanceofthewhole.(51)
Toask:WhatcanIcontributeistolookfortheunusedpotentialinthejob.Andwhatis
consideredexcellentperformanceinagoodmanypositionsisoftenbutapaleshadowof
thejobsfullpotentialofcontribution.(52)
Executiveswhodonotaskthemselves:WhatcanIcontribute?arenotnotonlylikelyto
aimtoolow,theyarelikelytoamatthewrongthings.(52)
Organizationis,toalargeextent,ameansofovercomingthelimitationsmortalitysetsto
whatanyonemancancontribute.(54)
Themostcommoncauseofexecutivefailureisinabilityorunwillingnesstochangewith
thedemandsofanewposition.(55)
Thefocus oncontribution,byitselfsupplies thefourbasicrequirements ofeffective
humanrelations:

communications;

teamwork

self-development; and,

development of others.

Throughouttheagestheproblemhasalwaysbeenhowtogetcommunicationoutof
information.Becauseinformationhadtobehandledandtransmittedbypeople,itwas
alwaysdistortedbycommunications,thatis,byopinion,impression,comment,judgment,
bias,andsoon.(64)
The more we automate informationhandling, the more we will have to create
opportunitiesforeffectivecommunication.(64)
people in general, and knowledge workers in particular, grow according to the
demandstheymakeonthemselves.Theygrowaccordingtowhattheyconsidertobe
achievementandattainment.(65)
4 Making Strength Productive
noexecutivehaseversufferedbecausehissubordinateswerestrongandeffective.(68)
One cannot hire a hand the whole man always comes with it human relations
proverb
Inanorganizationonecanmakehisstrengtheffectiveandhisweaknessirrelevant.(71)

everychangeinthedefinition,structure,andpositionofajobwithinanorganization
setsoffachainreactionofchangesthroughouttheentireinstitution.Tostructureone
jobtoapersonisalmostcertaintoresultintheendingreaterdiscrepancybetweenthe
demandsofthejobandtheavailabletalent.(72)
Totoleratediversity,relationshipsmustbetaskfocusedratherthanpersonalityfocused.
(72)
fortheabilityofaknowledgeworkertocontributeinanorganization,thevaluesand
thegoalsoftheorganizationareatleastasimportantashisownprofessionalknowledge
andskills.(77)
Howdoeffectiveexecutivesstaffforstrengthwithoutstumblingintotheoppositetrapof
buildingjobstosuitpersonality?
1. They do not start out with the assumption that jobs are created
by nature or by God. They know that they have been designed
by highly fallible men.
2. The second rule for staffing from strength is to make each job
demanding and big. It should have challenge to bring out
whatever strength a man may have.
3. Effective executives know that they have to start with what a
man can do rather than with what a job requires. For a
superior to focus on weakness, as our appraisals require him to
do, destroys the integrity of his relationship with his
subordinates. (80) By themselves character and integrity do
not accomplish anything. But their absence faults everything
else.
4. The effective executive knows that to get strength one has to put
up with weaknesses.
Asuperiorhasresponsibilityfortheworkofothers.Healsohaspoweroverthecareers
of others. Making strengths productive is therefore much more than an essential of
effectiveness.Itisamoralimperative,aresponsibilityofauthorityandposition.(86)
Ineveryareaofeffectivenesswithinanorganization, onefeedstheopportunitiesand
starvestheproblem.Nowhereisthismoreimportantthaninrespecttopeople.strength
producesresults.Weaknessonlyproducesheadachesandtheabsenceofweakness
producesnothing.(92)
Inhumanaffairs,inotherwords,thedistancebetweentheleadersandtheaverageisa
constant. If leadership performance is high, the average will go up. The effective

executiveknowsthatitiseasiertoraisetheperformanceofoneleaderthanitistoraise
theperformanceofawholemass.(93)
Thetaskofanexecutiveisnottochangehumanbeings.Rather,astheBibletellsusin
theParableoftheTalents,thetaskistomultiplyperformancecapacityofthewholeby
putting to use whatever strength, whatever health, whatever aspiration there is in
individuals.(93)
5 First Things First
Ifthereisanyonesecretofeffectiveness,itisconcentration.Effectiveexecutivesdo
firstthingsfirstandtheydoonethingatatime.(94)
Anorganizationneedstobringinfreshpeoplewithfreshpointsofviewfairlyoften.Ifit
onlypromotesfromwithinitsoonbecomesinbredandeventuallysterile.(101)
Therearealwaysmoreproductivetasksfortomorrowthanthereistimetodothemand
moreopportunitiesthantherearecapablepeopletotakecareofthemnottomention
thealwaysabundantproblemsandcrises.Adecisionthereforehastobemadewhich
tasksdeservepriorityandwhichareoflessimportance.Theonlyquestioniswhichwill
makethedecisiontheexecutiveorthepressures.(102)
Courageratherthananalysisdictatesthetrulyimportantrulesforidentifyingpriorities:

pick the future as against the past;

focus on opportunity rather than on problems;

choose your own direction rather than climb on the

bandwagon; and

aim high, aim for something that will make a difference, rather
than for something that is safe and easy to do.

6 The Elements of Decision-making

Effectiveexecutiveswantimpactratherthantechnique,theywanttobesoundrather
thanclever.(107)
The truly important features of the decisionsmade are neithernovelty nor
controversial:
1. the clear realization that the problem was generic and could only
be solved through a decision which established a rule, a
principle;
2. the definition of the specifications which the answer to the
problem had to satisfy, that is, of the boundary conditions';

3. the thinking through what is right, that is, the solution which
will fully satisfy the specifications before attention is given to the
compromises, adaptations, and concessions needed to make the
decision acceptable;
4. the building into the decision of the action to carry it out;
5. the feedback which tests the validity and effectiveness of the
decision against the actual course of events.
1.Thefirstquestiontheeffectivedecisionmakerasksis:Isthisagenericsituationoran
exception?(115)Itisthiscommonhumantendencytoconfuseplausibilitywithmorality
whichmakestheincompletehypothesissodangerousamistakeandsohardtocorrect.
The effective decisionmaker, therefore, always assumes initially that the problem is
generic.(120)Oneofthemostobviousfactsofsocialandpoliticallifeisthelongevityof
thetemporary.(12)
2.Thesecondmajorelementinthedecisionprocessisclearspecificationsastowhatthe
decisionhastoaccomplish.(121)
3.Onehastostartoutwithwhatisrightratherthanwhatisacceptable(letalonewhois
right)preciselybecauseonealwayshastocompromiseintheend.(126)Fortherearetwo
differentkindsofcompromise.Onekindisexpressedintheoldproverb:Halfaloafis
better than no bread. The other kind is expressed in the story of the Judgment of
Solomon,whichwasclearlybasedontherealizationthathalfababyisworsethanno
babyatall.(126)
4.Convertingthedecisionintoactionisthefourthmajorelementinthedecisionprocess.
(127)Infact,nodecisionhasbeenmadeunless carryingitoutinspecificsteps has
becomesomeonesworkassignmentandresponsibility.Untilthen,thereareonlygood
intentions.(127)
5.Finally,afeedbackhastobebuiltintothedecisiontoprovideacontinuoustesting,
againstactualevents,oftheexpectationsthatunderliethedecisions.(130)
7 Effective Decisions
Adecisionisajudgment.Itisachoicebetweenalternatives.itisrarelyachoicebetween
rightandwrong.Itisatbestachoicebetweenalmostrightandprobablywrongbut
muchmoreoftenachoicebetweentwocoursesofactionneitherofwhichisprovably
morenearlyright,thantheother.(134)
To get the facts first is impossible. There are no facts unless one has a criterion of
relevance.Eventsbythemselvesarenotfacts.(134)
Ajudgmentinwhichonecanonlysayyesornoisnojudgmentatall.(138)

Unlessonehasconsideredalternatives,onehasaclosedmind.(138)
Therearethreemainreasonsfortheinsistenceondisagreement.Itis,first,theonly
safeguardagainstthedecisionmakersbecomingtheprisoneroftheorganization.(140)
Secondly,disagreementalonecanprovidealternativestoadecision.(140)Aboveall,
disagreementisneededtostimulatetheimagination.(142)
The effective decisionmaker, therefore, organizes disagreement. Disagreement
convertstheplausibleintotherightandtherightintothegooddecision.(143)
Everydecisionislikesurgery.Itisaninterventionintoasystemandthereforecarries
withittheriskofshock.(145)
Itbecomesclearthatadecisionrequirescourageasmuchasitrequiresjudgment.There
isnoinherentreasonwhymedicinesshouldtastehorriblybuteffectiveonesusually
do.Similarlythereisnoinherentreasonwhydecisionsshouldbedistastefulbutmost
effectiveonesare.(147)
Executivesarenotpaidfordoingthingstheyliketodo.Theyarebeingpaidforgetting
the right things done most of all in their specific task, the making of effective
decisions.(148)
Conclusion: Effectiveness Must Be Learned
1. The first step toward effectiveness is a procedure: recording
where the time goes.
2. The next step, however, in which the executive is asked to focus
his work on outward contribution advances from the procedural
to the conceptual, from mechanics to analysis, and from
efficiencies to concern with results.
3. Making Strengths Productive
expressed in behavior

is fundamentally an attitude

4. The chapter First Things First serves as antiphon to the earlier

chapter, Know Thy Time.
5. The effective decision, which the final chapters discuss, is
concerned with rational action.
Effectivedecisionmakingrequiresbothprocedureandanalysis;butitsessenceisan
ethicsofaction.(158)
As a result, the organization not only becomes capable of doing better. It becomes
capableofdoingdifferentthingsandofaspiringtodifferentgoals.(159)

Selfdevelopmentoftheexecutivetowardseffectivenessistheonlyintegratoravailable.
(162)
Effectivenessmustbelearned.(162)