How can the right performance-measurement systems help teams excel in innovation?
Many executives have realized that process focused, multifunctional teams can dramatically improve the way their companies deliver products and services to customers. Traditional performance-measurement systems not only fail to support the these teams but also undermine them. Such teams need new performance-measurement systems to fulfill their promise.
Ideally, a measurement system designed to support a team-based organization should help teams overcome two major obstacles to their effectiveness: getting functions to provide expertise to teams when they need it and getting people from different functions on a team to speak a common language.
How should performance-measurement systems be overhauled to maximize the effectiveness of teams? Here are four guiding principles:
- The overarching purpose of a measurement system should be to help a team, rather than top managers, gauge its progress.
- A truly empowered team must play the lead role in designing its own measurement system.
- Because a team is responsible for a value-delivery process that cuts across several functions, it must create measures to track that process.
- A team should adopt only a handful of measures.
These guiding principles are important when measuring in innovation setting.
Meyer, C., 1994. How the Right Measures Help Teams Excel. Harvard Business Review 72 (3), 95-103.
Available at: https://hbr.org/1994/05/how-the-right-measures-help-teams-excel
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