Keeping Two Sets of Books

I learned a great best practice for organizational change this week at the Consortium for Service Innovation’s executive summit in beautiful Chatham, Cape Cod:  Keep two sets of books! No, not in the bad way—not like Enron—but to enable change.

Several industry leaders are keeping two sets of books to track performance on their current organizational obligations, while setting the stage for a new way of thinking about their work.

For example, let’s say you’re in charge of a self-service initiative.  Readers of this blog know that self-service is a customer engagement strategy, not a customer deflection strategy…but do you want to have that conversation every week with the CFO?

A better way is to keep books both in the organization’s currency of the day (deflected contacts, avoided operational expense) and in your aspirational currency (loyalty, feature use, and repurchase, for example).

This is an easier conversation:  we start off by showing our stakeholders and funders how we’re doing the things they care about, then we earn the right to have a conversation about why they should care about the things we care about, too.

Also, emerging measures are usually imprecise and somewhat subjective, as Dean Spitzer tells us.  In contrast, measures in our “first” set of books tend to be better vetted, and more familiar to the organization.  These more conventional measures give us breathing room to gain experience with our new measures without subjecting them to the third degree.

Without aspirational measures, we can’t refocus the organization on new and innovative sources of value.  Without our conventional measures, we’ll spend all our time arguing and justifying.

As soon as your new measures take hold, you get to institutionalize them in the first set of books—and you have the great opportunity of creating even more innovating measures, keeping the change moving forward.

So, keep two sets of books.  (Just please, don’t call it that when you’re presenting to the CFO.)

A special tip of the hat to the support executives who shared their “double entry” stories and successes, especially Medi Goker of Oracle; Marco Bill-Peter of Red Hat; Steve Young and Janet Ramey of Cisco.  The good ideas in this post are theirs; misrepresentations of their points of view are mine alone.