Das Humankapital meets dr. Dean Spitzer

Dean Spitzer is a organizational psychologist, is President of Dean R. Spitzer & Associates Inc. Dean is a authority on performance measurement. He has over 30 years experience in helping individuals and organizations achieve superior performance. For many years, he was the IBM thought leader in the area of performance management and measurement. He is the author of 8 books and over 200 articles on various aspects of performance management and improvement, including his latest book ‘Transforming Performance Measurement‘ and a keynote/featured presenter at more than 100 conferences worldwide.  Dean has received many honors for his significant professional contributions, including being selected as a Fellow of the Advanced Performance Institute and receiving two President’s Awards from the International Society for Performance Improvement. He also holds the prestigious Certified Performance Technologist (CPT) designation. Dean earned his Ph.D. degree from the University of Southern California and his M.A. from Northwestern University and pursued both undergraduate and graduate studies at the London School of Economics.

Davide de Palma : Dr. Spitzer, What is the psychology of organizations?

Dean Spitzer :  Organizational psychology is a branch of social psychology.  It is about how to optimize organizational performance.  Where clinical psychology deals with individuals, social psychology deals with groups.

Davide de Palma : What is the future of Human Capital?

Dean Spitzer : In today’s world, people are so much more important than they have ever been.  People used to be just one of many “factors of production.”  They mostly did physical work and operated machines, according to rigid processes.  In today’s organizations, intellectual capital is the key to improvement and innovation – and human capital is a much more important source of competitive advantage than physical or financial capital.  The companies that will thrive in the 21^st Century and beyond are those that manage their human capital best.

Davide de Palma : Which type of measurement is more common to measure the intangible assets?

Dean Spitzer : In my book “Transforming Performance Measurement,” I stress the importance of finding new ways of measuring, so that intangible assets – which are the source of most value creation today – can be managed more effectively.  Our old measurement systems simply can’t enable us to ‘see’ and manage the things that are invisible to our eyes and our traditional financial-oriented measurement systems.  I advocate finding new “emergent measures”.  For example, how do you measure “customer value”?  There are many ways to do it, but very few of them capture the diverse value of customers.  Some organizations are measuring things like Customer Loyalty and Customer Lifetime Value, instead of the traditional, transactional Customer Satisfaction metric. There are literally thousands of examples of how new measures are adding richness to how we view intangible constructs.

Davide de Palma : What is the performance measurement model ?

Dean Spitzer : I help organizations understand their value creation process through the use of “performance measurement models.”  These models depict the hypothesized cause-and-effect logic behind the company’s strategy and business model.

Davide de Palma : What is the difference between  performance management and performance measurement?

Dean Spitzer : “Performance measurement” is an enabler for “performance management.” You can’t manage what you can’t measure – it’s as simple as that.

Davide de Palma : Are there bad practices of performance measurement?

Dean Spitzer : There are literally hundreds of bad practices.  I have identified the ‘top ten’ bad measurement practices, which are:

1. Too many unimportant metrics
2. Vital factors ignored
3. Too tightly linked with rewards
4. Too backward; not sufficiently predictive
5. Siloed; not aligned across functions
6. Not linked to business objectives
7. Not integrated with management systems
8. Too cumbersome
9. Not useful
10. Not timely

#3 causes all kind of dyfunctions as people do what’s rewarded, rather than what they know they should be doing.

Davide de Palma : What makes a measure ‘good’?

Dean Spitzer : The most important characteristic of good measures is relevance.  I disagree with many purists who believe that validity and reliability are the most important characteristics. Obviously they are important, but relevance is the most important.  If a measure is irrelevant, who cares how valid and reliable it is!

Davide de Palma : How do you think you can overcome the skepticism of performance measurement?

Dean Spitzer :  I talk a lot in my book about the importance of the “context of measurement.”  The context has to do with how people feel about measurement.  In most organizations, measurement is used to monitor and control, rather than for learning and improvement.  In a punitive environment, people are going to dislike measurement and being measured.  The key is to use measurement more for learning and feedback.  Deming showed how positive people can be about measurement when it is used for continuous improvement.

Davide de Palma : What is Transformational Performance Measurement ?

Dean Spitzer : It is changing the ways performance measurement is used.  In my book, I discuss four factors that are crucial to transforming performance measurement: Focus on the right things; integrate measurement across the organizations to break down functional silos; interactivity around measurement by improving the dialogue; and context, which is the environment in which measurement is used (and I mentioned that earlier).

Davide de Palma : Do you think that there is a correlation between Human Capital Measurement and firm performance?

Dean Spitzer : Absolutely.  Not only a correlation, but strong causation.  I believe that the  measurement models I have developed and tested show that very clearly.

Davide de Palma : Das Humankapital, is a blog that wants to promote the development of human capital. Do you think is important to promote the development of human capital?

Dean Spitzer : Absolutely!  And I applaud you for this initiative. Thanks for the opportunity of sharing some of my thoughts with your audience.

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