How to Prevent Watermelon Effect? Avoid Fake Green Metrics!
Watermelon Effect happens when all management indicators appear to be "green" and on target, yet underneath the surface, its all red—indicating poor governance and unhappy stakeholders.
We have understood the perils of watermelon effect and how Alan Mulally eliminated watermelon effect from Ford and paved way for the revival of Ford. How to remove watermelon effect in an organization? Both the skin and the fruit should be of the same color.
You either need to paint the skin in Red or make the inner juicy portion Green. Looks simple but not so simple. Ultimate objective is to make everything green. True. Everything in an organization should be GREEN. We cannot afford to retain tinges of RED anywhere. You may ask why don’t we then focus on converting everything to GREEN instead of worrying about the wrong GREEN flags? It is not that easy unless you build a transparent system in which the skins show the same colour. Why?
Imagine the health of an organization is in the quality of a large truckload of watermelons. It is important that every watermelon remains healthy & tasty when offered to the market. Added complexity is that the melons go through a complex, inter dependent and long supply chain before it reaches the end users. To ensure that everything remains good, transparent system required to gauge the status of each fruit by looking at its skin. Only then, bad watermelons can be replaced with good ones. Organization must build the culture and process by which the decision makers are able to gauge the correct status and take quick corrective actions by looking at the indicators. That is why dashboards are important for an organization.
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How to Prevent and Avoid Watermelon Effect in an Organization?
Be Honest: Do You Want to be Good or Look Good?
It’s natural to want to look good in front of colleagues and your boss and hence there is a natural tendency to avoid raising issues. With a little introspection, most of us conclude that we have a more authentic need to be great at our jobs and get better over time than to appear good at any given moment. When we have that clarity, we would be motivated to identify and address issues.
The Purpose is to Improve, Not Punish
When leaders give clear message that the intent is on improvement and not punishment, it creates an environment where facts and data flow more easily. As a leader, demonstrate that you use measurement data to enable smarter decisions on where to allocate efforts to improve the business.
Lean into the Red
Time is a huge lever in success, so the earlier you know where the issues are, the more time you have to address them. If you find issues too late, then there’s little or no time to recover. Rather than avoiding the red, lean in fast and hard!
Because You Can Measure It, Doesn’t Mean It Matters
If a metric or key result doesn’t make much difference to the objectives in an organization, don’t waste time measuring, tracking and analysing. Revisit what you measure: what truly creates value, what’s the best possible result, and what’s the smartest way to measure value so you can expand on it?
Facts are Your Friend, Especially When They Don’t Tell You What You Want to Hear
Only your best friend tells you the real truth — good metrics and measures are similar in that they tell you the truth even when it may not be what you planned. More importantly, avoiding the facts amplifies them, and shooting the messenger generally ensures you receive fewer important messages over time. Results measurements that indicate poor health, challenges, friction, low consumption, and so on are crucial to your success — welcome them like friends you need.
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