Business metrics to measure for transformation

Business metrics to track the impact of transformation

Before you begin your transformation journey, have you considered how you’ll track and monitor the gains you’re making? If transformations are about changing practices and behaviour, what business metrics should you use to measure the impact on performance? And if you haven’t set business metrics for your transformation, you’re certainly not alone.

Bizarrely, change isn’t something business leaders necessarily think about tracking. A traditional project is tracked by whether it’s on time, on budget and fit for purpose, but (crucially) that does not reflect sustainable change. The reason these business metrics are borrowed is probably that leaders are treating their transformations as a fixed destination and therefore falling into the trap of using project based metrics. But actually, this isn’t an appropriate model.

Projects have an end point whereas transformations are a process of continual, sustained improvement. There’s no fixed destination. So you’ll want to measure effective delivery of the transformation but also the impact that transformation is having on business performance.

As Paula Alsher states in her IMA blog, until you have sustained behavioural change you won’t get the financial gains that the transformation is intended to bring about.

She goes on to explain two types of business metrics that should be tracked during a transformation; business led and human led. So, of course, measure how your financial performance is tracking (business led) but also how your people are feeling throughout the process (human led).

Business metrics that transform

For cases where River is supporting transformation, we recommend targeting a series of business metrics that give an overview of the following:

  1. Level of adoption of technologies or techniques that support the transformation (business led)
  2. Level of improvement (business led)
  3. How people are feeling (human led)

Level of adoption

Through the adoption of new practices, you can identify the shape of the transformation. The success rate of transformations (in terms of meeting their financial objectives) relies heavily on full adoption of the new initiatives by the whole organisation. If the adoption doesn’t happen at scale, it’s highly likely that sustained transformation will fail. There will be no change to the day to day behaviours and competing methodologies will crop up. Getting everyone on board is key to reducing resistance and savvy leaders will incorporate mindset and behaviour change as a monitorable measure.

The McKinsey Quarterly Transformation Survey highlights the importance of collaboration across the whole organisation. The research demonstrates that leaders at companies starting a transformation should put a priority on finding efficient and scalable ways to effect change.

So full organisational uptake is something worthy of tracking over time if you’re going to sustain large scale improvement.

Level of improvement

With measures around the level of improvement, you’re monitoring the continuous improvement on your operational performance (through delivery of the transformation). In a nutshell, that’s not measuring transformation for transformation’s sake. Yes, it’s important to measure the transformation, but also to measure the impact you’re having across the targeted business.

Not everyone will transform at the same rate. Pockets of improvement will appear throughout your organisation. So this metric is critical to understand where the improvements are happening and how they can be enjoyed by the rest of the business.

How people are feeling

By tracking how people are feeling throughout the transformation, you can understand where there are gaps in people’s understanding of the purpose and impact of the transformation. Your communication strategy can be built around allaying these fears and misconceptions, as well as celebrating team successes.

This set of metrics provides clear KPIs that encompass the business and the human objectives for your transformation. Don’t forget that the focus may shift between these business metrics. Teams which are at different stages will have a different focus with goals that are relevant to where they are along the journey.

Business metrics are for everyone

Successful transformations work by bringing your people with you on the journey so that a noticeable change in ‘the way we do things around here’ is adopted. That means contextualising the transformation for everyone and sustaining momentum throughout the process – and beyond. You can only do this if you have visible measures and metrics to show the uptick towards continued success.

By sharing a simple set of business metrics around the ongoing delivery of your transformation, and communicating the benefits that this delivery will provide, you can clearly make the vision and progress visible to all. Sharing these business metrics with the teams impacted allows you to collaborate with them on setting incremental goals that are appropriate for where they are in the journey, whilst also supporting your overall business goals for your transformation.

Teams will usually have a better understanding of what’s realistic and should be encouraged to swarm around these KPIs to make continual improvements.

So, when setting out on your transformation journey, remember to track a set of metrics that consider the business and the human elements of delivery. But don’t forget to allow for the fact that your focus will shift between these business metrics as you move through your transformation.

If you haven’t already downloaded our latest white paper, What’s the point of transformation without change?, grab it now to learn how to win at transformation and stay on the road to success.

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