Do you need KPIs? What about targets? It goes without saying, you need goals and objectives, doesn't it? You'll need some measures and metrics as well, won't you? Or at least some indicators.
Good grief! It sounds like a performance management shopping list! But even if there were performance management shopping malls around, I'll bet a lot of people wouldn't find what they were looking for. And that's simply because, they don't really know what all these things actually are!
Let's explore these terms, and see if we can't get some more clarity about how they are different from one another, and why.
A measure is a quantification of something you can observe, such as the proportion of customers that have purchased from you more than once or the average time it took you to ship customer orders last week.
Tip: If a measure is not measurable, then it can't really be a measure. You've probably not made the "something" specific enough to measure.
A performance measure is a type of measure that quantifies an important result, that impacts a business' or organisation's success. Performance measures are usually taken regularly over time, so that changes in performance can be determined. For example, as time goes by, does it take us less time or more time to ship customer orders?
Metrics and indicators are measures too There really isn't a strong enough body of knowledge out there to give them their own unique meaning. Measures are indicators too, in that they indicate the extent to which something is happening. They are rarely precise or exact, due to constraints with data collection, measure definition and analysis methods. But precision in a measure is not as important as the measure being able to give us useful knowledge we otherwise did not have.
KPIs, or key performance indicators, are measures too. But generally, KPIs are the most important measures for a business or organisation, usually having the highest leverage to impact its success. Due to their catchy name, the term KPI has almost become synonymous with the term performance measure.
Tip: I prefer to use the term 'performance measure' as the generic label for any quantification of a performance result.
A target is not a goal or a performance measure but rather a value that represents a level at which you want performance to be. If you have a performance measure that tracks the average number of errors in your invoices, then a target for that measure is also an average number of errors. But while your measure shows that currently you have an average of 0.14 errors per invoice, your target would represent an improvement on that, which could be 0.05 errors per invoice.
Objectives and goals are statements that link performance measures to targets and timeframes. "Reduce the average number of errors per invoice to 0.05 by December 31 2007" is an example of an objective, or a SMART goal. So it's ingredients are a performance measure (average number of errors per invoice), a target (0.05) and a timeframe (December 31 2007).
Tip: There is no one true definition of terms like these, so you might find it useful to make your own definitions clear in your organisation, to guide how they are understood in practice. But make sure you do some research first, to scope how others use these terms, to widen your awareness.
Monday 10 September 2007
#68 The Power Of The 80/20 Rule
In 1897, over a century ago, an Italian economist called Vilfredo Pareto made the discovery that 80% of the wealth of a population was owned by 20% of that population. The Pareto Principle, or 80/20 rule, is a pattern of predictable imbalance that keeps popping up in all kinds of contexts ever since. For example, the Quality Movement certainly grabbed onto it, coining phrases like "80% of the problem is caused by 20% of the causes."
Why the 80/20 rule is so important to us today.
The 80/20 rule is a guide for how to think about improving things. If you want something to improve, you have to change something. And with even a basic 80/20 analysis, you can find out what those "somethings" are, which will have the greatest impact.
And in an age where time is scarce, and to-do lists are long, the sharper our focus can be on what matters most, the better our results will be.
What the 80/20 rule can apply to.
If you're not completely happy with how your work or life is going right now, or you know that there is scope to improve it, then practice asking questions like these:
* Which are the 20% of tasks I perform that generate 80% of my output?
* Who are the 20% of customers that generate 80% of our profitability?
* Who are the 20% of customers that have 80% of the need for our services?
* What are the 20% of products that generate 80% of our profitability?
* What are the 20% of investments I make that generate 80% of the return?
* What are the 20% of interruptions that cause 80% of my productivity problems?
* What is the 20% of literature I read that gives me 80% of the knowledge I need?
* Who are the 20% of suppliers that give me 80% of the goods and services I need?
* What are the 20% of complaints that take up 80% of my complaint handling time?
* Who are the 20% of friends & family that get 80% of my attention?
Asking questions like this can reframe what is going on in your life or work, in a way that shows you how much more influence you can have in changing things. The 80/20 rule helps focus your attention on the things that have biggest impact on the results you want in your life. And by focusing on those things, you can more easily examine how you can influence them.
How to do a simple 80/20 analysis.
When you have framed your result and its potential causes in 80/20 questions like those above, you've set the scope for what kind of data to collect. If you're going to know which are the 20% of causes that produce 80% of your result, you'll need to measure both your result, and the degree of impact of each cause.
If you're uncertain exactly what to collect data on, try using a cause-effect diagram to map out the possibilities (fishbone diagram - click here for examples). Then you can measure or estimate the relative impact of each cause on your end result.
A simple bar chart or Pareto chart is a great way to display the 80/20 analysis, once you have the data. For each cause you list, against it you will have a number that represents the size of its impact on your result. It might be dollars or hours or incidents, depending on your result. Chart the data and look for the tallest 20% of bars in the chart that visually account for about 80% of your measure (click here for examples).
A useful note: it won't always be 80/20.
Why the 80/20 rule is so important to us today.
The 80/20 rule is a guide for how to think about improving things. If you want something to improve, you have to change something. And with even a basic 80/20 analysis, you can find out what those "somethings" are, which will have the greatest impact.
And in an age where time is scarce, and to-do lists are long, the sharper our focus can be on what matters most, the better our results will be.
What the 80/20 rule can apply to.
If you're not completely happy with how your work or life is going right now, or you know that there is scope to improve it, then practice asking questions like these:
* Which are the 20% of tasks I perform that generate 80% of my output?
* Who are the 20% of customers that generate 80% of our profitability?
* Who are the 20% of customers that have 80% of the need for our services?
* What are the 20% of products that generate 80% of our profitability?
* What are the 20% of investments I make that generate 80% of the return?
* What are the 20% of interruptions that cause 80% of my productivity problems?
* What is the 20% of literature I read that gives me 80% of the knowledge I need?
* Who are the 20% of suppliers that give me 80% of the goods and services I need?
* What are the 20% of complaints that take up 80% of my complaint handling time?
* Who are the 20% of friends & family that get 80% of my attention?
Asking questions like this can reframe what is going on in your life or work, in a way that shows you how much more influence you can have in changing things. The 80/20 rule helps focus your attention on the things that have biggest impact on the results you want in your life. And by focusing on those things, you can more easily examine how you can influence them.
How to do a simple 80/20 analysis.
When you have framed your result and its potential causes in 80/20 questions like those above, you've set the scope for what kind of data to collect. If you're going to know which are the 20% of causes that produce 80% of your result, you'll need to measure both your result, and the degree of impact of each cause.
If you're uncertain exactly what to collect data on, try using a cause-effect diagram to map out the possibilities (fishbone diagram - click here for examples). Then you can measure or estimate the relative impact of each cause on your end result.
A simple bar chart or Pareto chart is a great way to display the 80/20 analysis, once you have the data. For each cause you list, against it you will have a number that represents the size of its impact on your result. It might be dollars or hours or incidents, depending on your result. Chart the data and look for the tallest 20% of bars in the chart that visually account for about 80% of your measure (click here for examples).
A useful note: it won't always be 80/20.
#67 Measurable Goals For Performance Measurement
In a recent email to me, mezhermnt subscriber Corina from Hong Kong asks:
"This will be the first year my company uses the SMART approach to do performance management. As a manager, I am supposed to set up measurable objectives for my subordinates. It's not a problem for me to set up measurable objectives for my assistant managers as they have deadlines to meet. But when it comes to my secretary and the clerical staff, I am not sure how to set measurable goals for them as their duties are very routine and tedious. Could you give me some examples?"
Are deadlines the only thing worth measuring?
Corina mentions that setting up measurable goals for her assistant managers is relatively easy because they have deadlines to meet. Does this mean that the only results worth measuring for the assistant managers is whether they complete things by their deadlines?
What about completing the right things, instead of wasting time and effort and money on doing things that really don't need to be done at all?
And what about completing things well, instead of rushing to get it done on time but producing an end result that falls below the standards required?
Spend the time to think about results, before thinking about goals and measures.
So this is the first key to setting measurable goals for performance management: first spend some time to define the most important results that the person, in their role, is responsible for achieving. And check that you've got the right balance among those results using a checklist something like this one:
* timeliness (finishing the work on time, or with as short as feasible cycle time or total effort)
* quality (the goodness of the output produced, perhaps in terms of customer expectations or standards)
* quantity (the total amount of work performed, or output produced)
* cost (the total amount spent to perform the tasks)
* efficiency or productivity (the best use of time and resources)
So what are some examples of measurable goals for a secretary or personal assistant?
First we need to talk about the results that are important for a secretary or personal assistant to achieve, rather than get hung up on the duties they perform. For example, rather than focusing on the duties of "send agendas for meetings" and "schedule appointments", one key result might be "their boss is always able to focus on the priorities and not distracted by administrative tasks".
Next, what could be some goals for a secretary to strive for over the coming year? One goal, in line with the above result, could be to "Reduce the proportion of administrative items that go into the boss's in tray or diary."
And lastly, how could you measure this goal? One way could be to add the total hours the boss spends on administrative tasks (or tasks that are not in their list of priorities) and divide it by the total time the boss works, to give a proportion of time spent in administrative tasks. Clearly the goal is to reduce this amount.
See how this thought process gets you monitoring important results, instead of just measuring activity, like how many agendas were produced or how many appointments were scheduled?
So next time you're setting goals and measures for your staff, make sure the conversation starts with a clear statement of the results they are responsible for producing, as opposed to the tasks they perform. Measure the results, not the tasks.
"This will be the first year my company uses the SMART approach to do performance management. As a manager, I am supposed to set up measurable objectives for my subordinates. It's not a problem for me to set up measurable objectives for my assistant managers as they have deadlines to meet. But when it comes to my secretary and the clerical staff, I am not sure how to set measurable goals for them as their duties are very routine and tedious. Could you give me some examples?"
Are deadlines the only thing worth measuring?
Corina mentions that setting up measurable goals for her assistant managers is relatively easy because they have deadlines to meet. Does this mean that the only results worth measuring for the assistant managers is whether they complete things by their deadlines?
What about completing the right things, instead of wasting time and effort and money on doing things that really don't need to be done at all?
And what about completing things well, instead of rushing to get it done on time but producing an end result that falls below the standards required?
Spend the time to think about results, before thinking about goals and measures.
So this is the first key to setting measurable goals for performance management: first spend some time to define the most important results that the person, in their role, is responsible for achieving. And check that you've got the right balance among those results using a checklist something like this one:
* timeliness (finishing the work on time, or with as short as feasible cycle time or total effort)
* quality (the goodness of the output produced, perhaps in terms of customer expectations or standards)
* quantity (the total amount of work performed, or output produced)
* cost (the total amount spent to perform the tasks)
* efficiency or productivity (the best use of time and resources)
So what are some examples of measurable goals for a secretary or personal assistant?
First we need to talk about the results that are important for a secretary or personal assistant to achieve, rather than get hung up on the duties they perform. For example, rather than focusing on the duties of "send agendas for meetings" and "schedule appointments", one key result might be "their boss is always able to focus on the priorities and not distracted by administrative tasks".
Next, what could be some goals for a secretary to strive for over the coming year? One goal, in line with the above result, could be to "Reduce the proportion of administrative items that go into the boss's in tray or diary."
And lastly, how could you measure this goal? One way could be to add the total hours the boss spends on administrative tasks (or tasks that are not in their list of priorities) and divide it by the total time the boss works, to give a proportion of time spent in administrative tasks. Clearly the goal is to reduce this amount.
See how this thought process gets you monitoring important results, instead of just measuring activity, like how many agendas were produced or how many appointments were scheduled?
So next time you're setting goals and measures for your staff, make sure the conversation starts with a clear statement of the results they are responsible for producing, as opposed to the tasks they perform. Measure the results, not the tasks.
#66 Celebrate Your Performance Successes
If you've been monitoring your business or team or personal performance for some time, you should celebrate! Even if you still haven't achieved your targets, or even if you still haven't got any significant performance improvements, celebration should be a regular part of managing your business performance.
3 important reasons to celebrate performance successes
Firstly, celebration injects positive feelings into the typically dry experience performance management. Performance measurement most certainly is not just about the numbers. It's about the kind of change we want in the things that matter to us, the things we care about or have strong feelings about. Celebrating performance successes firmly funnels our attention on great things we have achieved, however small. It helps dilute the sting of negative results or negative feedback, which human nature funnels our attention toward with far greater bias than the positive results.
Secondly, celebration builds momentum toward your performance targets. Particularly when you set staged targets along the timeframe to your ultimate targets, celebrating the progress along the way consolidates what's working, and reminds you that you do have influence and control over your performance results.
Thirdly, celebration reminds you what matters most. The spotlight of celebration keeps your attention on what you want more of, doesn't distract you with over emphasis on what you want less of. It's too easy for performance management to be all about fixing problems. Where attention goes, energy flows. Where do you want the energy in your business to flow?
But what kinds of successes can you celebrate?
Decide on some small goals along the way to having that complete performance dashboard that tells you all you need to know about your business results. Celebrating these goals will remind you of the positives of measuring performance, build on your momentum toward your targets, and . Consider celebrating goals like these:
* Celebrate when you have finally chosen a set of performance measures that your team feel excited about, or at the very least feel committed to reporting and using.
* Celebrate when you have brought a measure to life - even just one measure - so that you are now getting the data and using the measure to make your decisions that little bit wiser!
* Celebrate when you find out why performance isn't where you want it to be, and you now have more choices - better choices - for how to influence that performance.
* Celebrate when you see your performance measure respond to the improvements you are making.
* Celebrate when you see your performance measure not responding at all to the improvement you are making (you've learned what doesn't work - very important).
* Celebrate achieving staged targets along the way to your ultimate targets. It helps if you make the earlier targets easier, gradually building the challenge in proportion to the momentum each achievement adds.
* And of course, celebrate when you achieve your ultimate targets!
How do you celebrate performance successes?
There are lots of ways you can celebrate progress along your journey of business performance management. But do choose those that mean something to your staff, that, given their values, they will truly appreciate.
* Consider an awards ceremony (serious or light-hearted) to reward and recognise people that have played special roles in achieving the current performance successes.
* Have a party! Just make sure the reason for the party is clear - perhaps theme it along the lines of the performance win it celebrates (e.g. a birthday party for your new performance measures).
* Reinvest some of the gains from performance improvement, like saved time, saved money or additional revenue, into the workplace for everyone to enjoy - a coffee machine, a massage chair, weekly fresh flower deliveries, bowls of fresh fruit every day. Whatever your staff would most appreciate.
* And many times, a simple heartfelt "thank you" is all that's needed.
What you and your team recently achieved in your management of business performance? Have you celebrated it yet? Drop me an email and let me know how you celebrate it!
3 important reasons to celebrate performance successes
Firstly, celebration injects positive feelings into the typically dry experience performance management. Performance measurement most certainly is not just about the numbers. It's about the kind of change we want in the things that matter to us, the things we care about or have strong feelings about. Celebrating performance successes firmly funnels our attention on great things we have achieved, however small. It helps dilute the sting of negative results or negative feedback, which human nature funnels our attention toward with far greater bias than the positive results.
Secondly, celebration builds momentum toward your performance targets. Particularly when you set staged targets along the timeframe to your ultimate targets, celebrating the progress along the way consolidates what's working, and reminds you that you do have influence and control over your performance results.
Thirdly, celebration reminds you what matters most. The spotlight of celebration keeps your attention on what you want more of, doesn't distract you with over emphasis on what you want less of. It's too easy for performance management to be all about fixing problems. Where attention goes, energy flows. Where do you want the energy in your business to flow?
But what kinds of successes can you celebrate?
Decide on some small goals along the way to having that complete performance dashboard that tells you all you need to know about your business results. Celebrating these goals will remind you of the positives of measuring performance, build on your momentum toward your targets, and . Consider celebrating goals like these:
* Celebrate when you have finally chosen a set of performance measures that your team feel excited about, or at the very least feel committed to reporting and using.
* Celebrate when you have brought a measure to life - even just one measure - so that you are now getting the data and using the measure to make your decisions that little bit wiser!
* Celebrate when you find out why performance isn't where you want it to be, and you now have more choices - better choices - for how to influence that performance.
* Celebrate when you see your performance measure respond to the improvements you are making.
* Celebrate when you see your performance measure not responding at all to the improvement you are making (you've learned what doesn't work - very important).
* Celebrate achieving staged targets along the way to your ultimate targets. It helps if you make the earlier targets easier, gradually building the challenge in proportion to the momentum each achievement adds.
* And of course, celebrate when you achieve your ultimate targets!
How do you celebrate performance successes?
There are lots of ways you can celebrate progress along your journey of business performance management. But do choose those that mean something to your staff, that, given their values, they will truly appreciate.
* Consider an awards ceremony (serious or light-hearted) to reward and recognise people that have played special roles in achieving the current performance successes.
* Have a party! Just make sure the reason for the party is clear - perhaps theme it along the lines of the performance win it celebrates (e.g. a birthday party for your new performance measures).
* Reinvest some of the gains from performance improvement, like saved time, saved money or additional revenue, into the workplace for everyone to enjoy - a coffee machine, a massage chair, weekly fresh flower deliveries, bowls of fresh fruit every day. Whatever your staff would most appreciate.
* And many times, a simple heartfelt "thank you" is all that's needed.
What you and your team recently achieved in your management of business performance? Have you celebrated it yet? Drop me an email and let me know how you celebrate it!
#65 Building Your Hierarchy Of Measures
It doesn’t matter what type of business or organisation yours is, it will still have a few layers or levels of performance results that, through cause-effect or relationship mapping, interdependently sum up what the business must improve as it moves into the future. The most common four layers are depicted in the following model as four concentric circles.
Level 1: success & sustainability measures
The highest level in your performance measurement hierarchy monitors the success & sustainability results for your business. These are the results that are implied by your vision, mission and ultimate outcomes for your stakeholders (i.e. customers, shareholders/owners, partners, communities, employees). These results are the ultimate evidence of the success of the business, and it’s likelihood to sustain that success into the long term future.
Examples of success & sustainability measures might include profit, market value of your business and customer loyalty.
Level 2: strategic measures
The measures that monitor your whole-business strategic objectives or goals are the next level in the measure hierarchy. These measures track the results implied by your business’s current strategic direction. They basically describe what the organisation is going to be like in the next 2 to 5 years.
Examples of strategic measures might include return on investments, market share, revenue and customer churn.
Level 3: tactical (or process output) measures
Tactical objectives or goals are the next level in your performance measure hierarchy, and they are derived from your core, end-to-end processes. It is these processes that have the significant impact on the business’s ability to achieve its success & sustainability results, and its strategic results. Your strategic objectives or goals provide the focus for what results matter most for these end-to-end processes now.
If you're not yet a process-oriented business, then another way to determine your tactical measures is by exploring the impact each department or division in your business has on the strategic results.
Examples of tactical measures might include product development cycle time, new leads, product sales, customer satisfaction (with specific products or services), lost time injuries, on-time delivery to customers.
Level 4: operational measures
The results implied by operational objectives or goals or specific activities are monitored by operational performance measures. They usually track the root causes of tactical performance results. They are the drivers of whole-process results and are where resources are allocated to improve process performance and ultimately improve organisational success and sustainability.
Examples of operational measures might include sales conversion rate, rework, near-miss safety incidents, inventory turn.
Mapping your measure hierarchy
A little (but not much) like the strategy mapping discussed by Balanced Scorecard authors, Kaplan and Norton, mapping relationships among the levels of your performance measure hierarchy can be surprisingly valuable. Each measure has a relationship of some kind with at least one other measure, such as cause-effect, companion, or conflict.
Seeing these relationships mapped visually across the hierarchy of your measures makes it easy to see gaps in your strategy, easy to see how each part of the business contributes to ultimate success and sustainability, easy to pinpoint improvement actions when higher level measures aren't achieving targets.
Why not give it a go?
Take a few of your business performance measures and just doodle a relationship map to get a taste for the impact it can have.
Level 1: success & sustainability measures
The highest level in your performance measurement hierarchy monitors the success & sustainability results for your business. These are the results that are implied by your vision, mission and ultimate outcomes for your stakeholders (i.e. customers, shareholders/owners, partners, communities, employees). These results are the ultimate evidence of the success of the business, and it’s likelihood to sustain that success into the long term future.
Examples of success & sustainability measures might include profit, market value of your business and customer loyalty.
Level 2: strategic measures
The measures that monitor your whole-business strategic objectives or goals are the next level in the measure hierarchy. These measures track the results implied by your business’s current strategic direction. They basically describe what the organisation is going to be like in the next 2 to 5 years.
Examples of strategic measures might include return on investments, market share, revenue and customer churn.
Level 3: tactical (or process output) measures
Tactical objectives or goals are the next level in your performance measure hierarchy, and they are derived from your core, end-to-end processes. It is these processes that have the significant impact on the business’s ability to achieve its success & sustainability results, and its strategic results. Your strategic objectives or goals provide the focus for what results matter most for these end-to-end processes now.
If you're not yet a process-oriented business, then another way to determine your tactical measures is by exploring the impact each department or division in your business has on the strategic results.
Examples of tactical measures might include product development cycle time, new leads, product sales, customer satisfaction (with specific products or services), lost time injuries, on-time delivery to customers.
Level 4: operational measures
The results implied by operational objectives or goals or specific activities are monitored by operational performance measures. They usually track the root causes of tactical performance results. They are the drivers of whole-process results and are where resources are allocated to improve process performance and ultimately improve organisational success and sustainability.
Examples of operational measures might include sales conversion rate, rework, near-miss safety incidents, inventory turn.
Mapping your measure hierarchy
A little (but not much) like the strategy mapping discussed by Balanced Scorecard authors, Kaplan and Norton, mapping relationships among the levels of your performance measure hierarchy can be surprisingly valuable. Each measure has a relationship of some kind with at least one other measure, such as cause-effect, companion, or conflict.
Seeing these relationships mapped visually across the hierarchy of your measures makes it easy to see gaps in your strategy, easy to see how each part of the business contributes to ultimate success and sustainability, easy to pinpoint improvement actions when higher level measures aren't achieving targets.
Why not give it a go?
Take a few of your business performance measures and just doodle a relationship map to get a taste for the impact it can have.
#64 Five Basic Performance Measures
If you're starting out with measurement but don't have a clearly articulated strategy - or any strategy at all - you're probably feeling stuck about what to measure to manage performance. With no goals, no objectives, and no clear priorities, everything seems important. And it's too overwhelming to measure everything.
So if you are at a loss for what to start measuring, then try these 5 basic performance measures. Spend as little time as possible tailoring them to your business; spend more time pilot testing them. You'll learn tonnes more about the best measures for your business through getting started with something, rather than waiting until you've designed the best way to measure.
measure #1 is customer satisfaction
This first is probably the most important of the 5 basic measures. It's the only measure that will connect you with the relevance of the work you're doing. If customers aren't happy, then everyone is wasting at least a portion of their time. Measure how your customer judges the outcome of your product or service, through surveys or at the end of each transaction with the customer. You can ask them directly, give them a survey form, or send them to a website form.
If you also collect data about what aspects of your product or service are most important to customers, it will give you clues about more specific things that might be important to measure also e.g. easy access to support staff or accuracy of bills.
measure #2 is product/service defects
Defects is a measure of quality, and a translation of what the customer expects your product or service to do, into something you can count to assess how often the product or service actually does what is expected.
Your customer satisfaction measure is a companion to this one. And the extra data collected about what is most important to customers about your product or service will help you define what constitutes a defect (e.g. something breaks, something doesn't operate correctly, a delivery deadline was missed, an invoice has errors).
measure #3 is cycle time
The time it takes to produce or deliver your product or service for your customer is a surprisingly useful thing to measure. It's not just about meeting the time commitments you made to your customer. It's just as importantly about focusing everyone on the things that make the cycle time what it is. And this is usually dead time between hand-offs in the process, waste and rework due to errors or lax standards, and even things that didn't need to be done at all.
An alternative or companion measure to cycle time might be on time delivery, which links it more to the customer's experience. Just remember the value of measuring cycle time for internal benefit too.
measure #4 is productivity
Productivity is a measure of your process efficiency, and is essentially the rate at which you can produce outputs, relative to the input it takes to do so. A great measure to focus you on eliminating waste and rework in delivering your products and services to your customers.
For example, one way to think about productivity is to compare how much you're producing relative the time it takes, such as number of work hours. Another way to think about productivity is about quantity versus cost - how much are you producing, relative to what it costs in resources and labour.
measure #5 is innovation (or improvement) ideas
Even if you're not ready to call it innovation (call it improvement instead), this fifth basic measure is about stimulating one of the behaviours that support a performance culture, namely making active suggestions about how to improve performance.
Particularly when the first 4 basic measures are shared and discussed among the team, actively measuring something as simple as the number of improvement ideas suggested, or the number of targeted improvements tested or implemented, encourages everyone to deepen their understanding about performance, and how they can influence it.
The 5 basic measures are a springboard, not a solution
Remember, don't try to get it perfect before you begin measuring anything. It's not until you start using measures that you discover new questions and clearer information needs. Use these five basic measures as a springboard to get used to measuring and through their use, get closer to understanding what you really do need to measure.
So if you are at a loss for what to start measuring, then try these 5 basic performance measures. Spend as little time as possible tailoring them to your business; spend more time pilot testing them. You'll learn tonnes more about the best measures for your business through getting started with something, rather than waiting until you've designed the best way to measure.
measure #1 is customer satisfaction
This first is probably the most important of the 5 basic measures. It's the only measure that will connect you with the relevance of the work you're doing. If customers aren't happy, then everyone is wasting at least a portion of their time. Measure how your customer judges the outcome of your product or service, through surveys or at the end of each transaction with the customer. You can ask them directly, give them a survey form, or send them to a website form.
If you also collect data about what aspects of your product or service are most important to customers, it will give you clues about more specific things that might be important to measure also e.g. easy access to support staff or accuracy of bills.
measure #2 is product/service defects
Defects is a measure of quality, and a translation of what the customer expects your product or service to do, into something you can count to assess how often the product or service actually does what is expected.
Your customer satisfaction measure is a companion to this one. And the extra data collected about what is most important to customers about your product or service will help you define what constitutes a defect (e.g. something breaks, something doesn't operate correctly, a delivery deadline was missed, an invoice has errors).
measure #3 is cycle time
The time it takes to produce or deliver your product or service for your customer is a surprisingly useful thing to measure. It's not just about meeting the time commitments you made to your customer. It's just as importantly about focusing everyone on the things that make the cycle time what it is. And this is usually dead time between hand-offs in the process, waste and rework due to errors or lax standards, and even things that didn't need to be done at all.
An alternative or companion measure to cycle time might be on time delivery, which links it more to the customer's experience. Just remember the value of measuring cycle time for internal benefit too.
measure #4 is productivity
Productivity is a measure of your process efficiency, and is essentially the rate at which you can produce outputs, relative to the input it takes to do so. A great measure to focus you on eliminating waste and rework in delivering your products and services to your customers.
For example, one way to think about productivity is to compare how much you're producing relative the time it takes, such as number of work hours. Another way to think about productivity is about quantity versus cost - how much are you producing, relative to what it costs in resources and labour.
measure #5 is innovation (or improvement) ideas
Even if you're not ready to call it innovation (call it improvement instead), this fifth basic measure is about stimulating one of the behaviours that support a performance culture, namely making active suggestions about how to improve performance.
Particularly when the first 4 basic measures are shared and discussed among the team, actively measuring something as simple as the number of improvement ideas suggested, or the number of targeted improvements tested or implemented, encourages everyone to deepen their understanding about performance, and how they can influence it.
The 5 basic measures are a springboard, not a solution
Remember, don't try to get it perfect before you begin measuring anything. It's not until you start using measures that you discover new questions and clearer information needs. Use these five basic measures as a springboard to get used to measuring and through their use, get closer to understanding what you really do need to measure.
#63 Got A Performance Measure Dictionary?
Many organisations have hundreds, even thousands, of performance measures. And some of the problems associated with having so many performance measures are:
* lots of measures can be unnecessarily duplicated, and dozens of people are taking dozens of hours each month independently reporting the same things
* measures that should be calculated the same way often aren't, and therefore don't have the power of consistency (aka "apples with apples" comparability)
* measures that aren't brought to life yet have no clear implementation plan or blueprint
* it's difficult to formally flag unneeded or unimportant measures for deletion or modification
One very important strategy to manage your suite of measures is to have a performance measure dictionary, a structured, single system where details about every measure you monitor is kept up to date.
The data *about* your measures
A well structured Performance Measure Dictionary contains fields where you can detail exactly how each measure is to be named, the correct way to calculate it, the appropriate data to use (and where to find it), how to report it, what signals to interpret and who is responsible for it.
This is the data about your measures, often referred to as metadata, and what types of metadata you choose to define your performance measures is important. It can't be vague or incomplete - it has to be sufficient for people to know and understand how to report each measure, so the measure actually tells you what you think it's telling you, and that it is consistent over time.
How to set up your Performance Measure Dictionary
First step in capturing and organising your performance measures is to decide what metadata you're going to use. At the very least, you'll need the measure's name, a brief description, a statement or formula for how it is calculated, where the source data comes from, and who is responsible for the measure.
Second step in setting up your Performance Measure Dictionary is to create a single system to capture these details about all your measures. You could start out using a simple Excel Spreadsheet or Word document, but it will quickly become cumbersome, particularly because it's difficult to sort and report summary measure information like their current 'bring to life' status or all the measures owned by Bob. A Microsoft Access database is a better starting point. And as you get more advanced, some dashboard and scorecard software - like SAS's SPM - enable you to record your measure definitions.
Third step is to stocktake your measures. This is time consuming, but get it done now and you'll save much time down the track that would otherwise be wasted trying to determine exactly how a measure was calculated, or whether the wrong data was used, or why two different reports show the same measure with different trends. You can get someone to go around and collect all the performance reports and details, then enter all the measures into your Performance Measure Dictionary. Or you can send copies of a measure definition form throughout your organisation or business for people to fill in and send back to a data entry person.
Fourth step is to develop some standards or policy around how the Performance Measure Dictionary should be used, and how all new measures in the organisation should be treated. Unless the measure has been documented in the Dictionary, it will be ignored by decision makers. Like all new behaviours, it's not going to be habit straight away, so give it time and encouragement to become the normal way of managing performance measures.
* lots of measures can be unnecessarily duplicated, and dozens of people are taking dozens of hours each month independently reporting the same things
* measures that should be calculated the same way often aren't, and therefore don't have the power of consistency (aka "apples with apples" comparability)
* measures that aren't brought to life yet have no clear implementation plan or blueprint
* it's difficult to formally flag unneeded or unimportant measures for deletion or modification
One very important strategy to manage your suite of measures is to have a performance measure dictionary, a structured, single system where details about every measure you monitor is kept up to date.
The data *about* your measures
A well structured Performance Measure Dictionary contains fields where you can detail exactly how each measure is to be named, the correct way to calculate it, the appropriate data to use (and where to find it), how to report it, what signals to interpret and who is responsible for it.
This is the data about your measures, often referred to as metadata, and what types of metadata you choose to define your performance measures is important. It can't be vague or incomplete - it has to be sufficient for people to know and understand how to report each measure, so the measure actually tells you what you think it's telling you, and that it is consistent over time.
How to set up your Performance Measure Dictionary
First step in capturing and organising your performance measures is to decide what metadata you're going to use. At the very least, you'll need the measure's name, a brief description, a statement or formula for how it is calculated, where the source data comes from, and who is responsible for the measure.
Second step in setting up your Performance Measure Dictionary is to create a single system to capture these details about all your measures. You could start out using a simple Excel Spreadsheet or Word document, but it will quickly become cumbersome, particularly because it's difficult to sort and report summary measure information like their current 'bring to life' status or all the measures owned by Bob. A Microsoft Access database is a better starting point. And as you get more advanced, some dashboard and scorecard software - like SAS's SPM - enable you to record your measure definitions.
Third step is to stocktake your measures. This is time consuming, but get it done now and you'll save much time down the track that would otherwise be wasted trying to determine exactly how a measure was calculated, or whether the wrong data was used, or why two different reports show the same measure with different trends. You can get someone to go around and collect all the performance reports and details, then enter all the measures into your Performance Measure Dictionary. Or you can send copies of a measure definition form throughout your organisation or business for people to fill in and send back to a data entry person.
Fourth step is to develop some standards or policy around how the Performance Measure Dictionary should be used, and how all new measures in the organisation should be treated. Unless the measure has been documented in the Dictionary, it will be ignored by decision makers. Like all new behaviours, it's not going to be habit straight away, so give it time and encouragement to become the normal way of managing performance measures.
#62 Why Measures Don't Have To Be Precise
STACEY: Doug Hubbard, of Hubbard Decision Research, is an internationally recognized expert in the field of IT value, with over 18 years experience in IT management consulting including 10 years experience specifically in teaching organizations to use his AIE (Applied Information Economics) method. But today I'm talking to him about the challenge of getting practical measures when people are overly concerned about precision.
Doug, for years now you’ve been coaxing people in the IT field to change their views from “IT is too intangible to measure” to “everything is measurable.” And I can attest that it’s not just in IT that needs to happen. Why has this been a hard transformation to them to make?
DOUG: IT often sees measurement as a choice between perfect 100% certain precision and nothing. Since they see perfect certainty as unachievable, they opt for no measurement at all. They’ve overlooked the usefulness of a third option: the “good enough” measurement. There may be three reasons why IT seeks illusory precision over something less precise but still useful.
STACEY: What have you found are the reasons this third option – and in my view often the only option – has been overlooked?
DOUG: Well, measurement doesn’t mean what they think it means. In my book, I explain that the practical scientific understanding of measurement is quite different from how IT management often uses the term. When I ask CIO’s and other IT managers at my seminars what measurement means, I often get an answer like “Assigning a specific value”. This is wrong in at least two ways. First, in science values aren’t simply “assigned”, they are based on observation. This is rarely the case in IT (when’s the last time you saw a random survey or controlled experiment used to measure something in IT?). Second, a measurement is seen as a reduction in uncertainty, almost never the elimination of uncertainty. In effect, science uses the term measurement to mean “observations that reduce uncertainty about a quantity”.
IT, on the other hand, thinks of measurement more like accountants think of it: absolutely precise, but often arbitrary and not always based on an observation. The book value of an asset, for example, is not based on any observation; just the “accepted procedure” and it may be very different from market value. IT should deal with uncertain reality, not a false sense of precision. When we make a real measurement, it is expressed as a range like a “90% Confidence Interval” that shows our uncertainty about that measurement. Further measurements should make this range narrower, but will rarely shrink it to a point value.
STACEY: So that’s one thing you can do – reframe measurement as a process that helps to reduce uncertainty, not eliminate it. Are there any more hurdles to jump over before they get comfortable to start measuring imperfectly?
DOUG: Yes, and that’s accepting the idea that the presence of noise does not mean a lack of signal. Many managers, IT and otherwise, start anticipating potential errors in any measurement and assume that any existence of any kind of error undermines the value of the measurement. A client of mine was considering a way to measure how much time employees spend in some activity the company wishes to automate. The solution I proposed was to conduct some sort of random survey of the staff over the course of a few weeks where the employee was asked to describe how much time they spent on that activity in that particular day. As soon as the idea was proposed, the mid-level IT managers were almost in a contest with each other to think of all the errors such a survey could have in it. Would the survey be truly random if people who spent more time in the activity were more likely to respond to the survey? Would some people be dishonest in their responses? And so on. Yet when the survey was conducted, they found the potential errors they identified could not possibly account for the findings. The people who had no stake in the outcome gave about the same answers as people who had a stake in the outcome (addressing potential bias in the responses). The response rate was 95% so it is unlikely that the remaining 5% could have changed the findings by much. And simple statistics showed how unlikely it would be that by chance alone, we happened to pick employees that spent more time in this activity.
The presumption the managers originally made is that merely identifying the potential error is sufficient to make the determination about whether any survey would be useless. But if we remember the definition of measurement above, we see that as long as the error is less than the previous state of uncertainty, it counts as a measurement. They were presuming that these errors must be too great to allow for uncertainty reduction but, without conducting the survey and doing the math, there is no basis for such a claim. The fact is that they have to make assumptions about how common these errors are or the effect they would have on the outcomes without having any idea of the relative frequencies of these problems. To put it another way, they have more error in their “error identification” method than the measurement is likely to have.
STACEY: Ha! I like that! It would be a really interesting experiment to find out how big the error in the measurement could get before it drowned out signals in the measure. Wouldn’t that help convince the skeptics?
DOUG: Actually, a formula for the value of information has been around since shortly after WWII. It is used to compute the monetary value of information in a wide variety of industries and government agencies. Ironically, the fact that there even is such a formula is mostly unknown to IT management. In my consulting practice I compute something the decision sciences call “Expected Value of Perfect Information” (EVPI) and “Expected Value of Sample (Partial) Information” (ESI). Of course, the cost of perfect information would almost always be greater than the value of perfect information. In fact, it is almost always the case that the “biggest bang for the buck” is the initial, small amount of uncertainty reduction in a measurement. I tell my clients to start taking a few observations, a random sample, a controlled experiment, etc. and see if the results are surprising in some way. Sometimes the initial observations are surprising enough that it can reduce the initial range for a value significantly and further observations may not be justified.
STACEY: In my previous life as a survey statistician, we’d use pilot samples in the same way, to estimate how much error there would be in the measurement. And this would help us choose a sample size only just large enough to make the measure useful without costing more than the value it would give. Doug, what’s the take-home point you’d like to leave mezhermnt readers with, regarding the imperfect nature of measurement?
DOUG: These three concepts should help IT – and anyone hung up on precision - start to make usefully imperfect measurements. Of course, they require thinking about measurement more like a statistician, scientist, or actuary would and less like an accountant normally would. Adopting these ideas not only encourage people to settle for “good enough” measurements, but they will probably cause them to focus on very different measurements in the first place. In the last 12 years, I’ve completed 55 major IT valuation studies and I’ve seen that most things IT measures have little or no information value and that the measurements with the highest information value tend to be those things IT almost never measures. This means that the measurements IT seeks, even if they achieve infinite precision, probably have no bearing on pragmatic business decisions. You should always choose imperfect but relevant measurements over arbitrarily precise and irrelevant measurements.
STACEY: Measures just need to have enough precision to give you the signals you need to make meaningful improvements to the business. Makes sense. Thanks Doug for sharing your ideas.
Doug, for years now you’ve been coaxing people in the IT field to change their views from “IT is too intangible to measure” to “everything is measurable.” And I can attest that it’s not just in IT that needs to happen. Why has this been a hard transformation to them to make?
DOUG: IT often sees measurement as a choice between perfect 100% certain precision and nothing. Since they see perfect certainty as unachievable, they opt for no measurement at all. They’ve overlooked the usefulness of a third option: the “good enough” measurement. There may be three reasons why IT seeks illusory precision over something less precise but still useful.
STACEY: What have you found are the reasons this third option – and in my view often the only option – has been overlooked?
DOUG: Well, measurement doesn’t mean what they think it means. In my book, I explain that the practical scientific understanding of measurement is quite different from how IT management often uses the term. When I ask CIO’s and other IT managers at my seminars what measurement means, I often get an answer like “Assigning a specific value”. This is wrong in at least two ways. First, in science values aren’t simply “assigned”, they are based on observation. This is rarely the case in IT (when’s the last time you saw a random survey or controlled experiment used to measure something in IT?). Second, a measurement is seen as a reduction in uncertainty, almost never the elimination of uncertainty. In effect, science uses the term measurement to mean “observations that reduce uncertainty about a quantity”.
IT, on the other hand, thinks of measurement more like accountants think of it: absolutely precise, but often arbitrary and not always based on an observation. The book value of an asset, for example, is not based on any observation; just the “accepted procedure” and it may be very different from market value. IT should deal with uncertain reality, not a false sense of precision. When we make a real measurement, it is expressed as a range like a “90% Confidence Interval” that shows our uncertainty about that measurement. Further measurements should make this range narrower, but will rarely shrink it to a point value.
STACEY: So that’s one thing you can do – reframe measurement as a process that helps to reduce uncertainty, not eliminate it. Are there any more hurdles to jump over before they get comfortable to start measuring imperfectly?
DOUG: Yes, and that’s accepting the idea that the presence of noise does not mean a lack of signal. Many managers, IT and otherwise, start anticipating potential errors in any measurement and assume that any existence of any kind of error undermines the value of the measurement. A client of mine was considering a way to measure how much time employees spend in some activity the company wishes to automate. The solution I proposed was to conduct some sort of random survey of the staff over the course of a few weeks where the employee was asked to describe how much time they spent on that activity in that particular day. As soon as the idea was proposed, the mid-level IT managers were almost in a contest with each other to think of all the errors such a survey could have in it. Would the survey be truly random if people who spent more time in the activity were more likely to respond to the survey? Would some people be dishonest in their responses? And so on. Yet when the survey was conducted, they found the potential errors they identified could not possibly account for the findings. The people who had no stake in the outcome gave about the same answers as people who had a stake in the outcome (addressing potential bias in the responses). The response rate was 95% so it is unlikely that the remaining 5% could have changed the findings by much. And simple statistics showed how unlikely it would be that by chance alone, we happened to pick employees that spent more time in this activity.
The presumption the managers originally made is that merely identifying the potential error is sufficient to make the determination about whether any survey would be useless. But if we remember the definition of measurement above, we see that as long as the error is less than the previous state of uncertainty, it counts as a measurement. They were presuming that these errors must be too great to allow for uncertainty reduction but, without conducting the survey and doing the math, there is no basis for such a claim. The fact is that they have to make assumptions about how common these errors are or the effect they would have on the outcomes without having any idea of the relative frequencies of these problems. To put it another way, they have more error in their “error identification” method than the measurement is likely to have.
STACEY: Ha! I like that! It would be a really interesting experiment to find out how big the error in the measurement could get before it drowned out signals in the measure. Wouldn’t that help convince the skeptics?
DOUG: Actually, a formula for the value of information has been around since shortly after WWII. It is used to compute the monetary value of information in a wide variety of industries and government agencies. Ironically, the fact that there even is such a formula is mostly unknown to IT management. In my consulting practice I compute something the decision sciences call “Expected Value of Perfect Information” (EVPI) and “Expected Value of Sample (Partial) Information” (ESI). Of course, the cost of perfect information would almost always be greater than the value of perfect information. In fact, it is almost always the case that the “biggest bang for the buck” is the initial, small amount of uncertainty reduction in a measurement. I tell my clients to start taking a few observations, a random sample, a controlled experiment, etc. and see if the results are surprising in some way. Sometimes the initial observations are surprising enough that it can reduce the initial range for a value significantly and further observations may not be justified.
STACEY: In my previous life as a survey statistician, we’d use pilot samples in the same way, to estimate how much error there would be in the measurement. And this would help us choose a sample size only just large enough to make the measure useful without costing more than the value it would give. Doug, what’s the take-home point you’d like to leave mezhermnt readers with, regarding the imperfect nature of measurement?
DOUG: These three concepts should help IT – and anyone hung up on precision - start to make usefully imperfect measurements. Of course, they require thinking about measurement more like a statistician, scientist, or actuary would and less like an accountant normally would. Adopting these ideas not only encourage people to settle for “good enough” measurements, but they will probably cause them to focus on very different measurements in the first place. In the last 12 years, I’ve completed 55 major IT valuation studies and I’ve seen that most things IT measures have little or no information value and that the measurements with the highest information value tend to be those things IT almost never measures. This means that the measurements IT seeks, even if they achieve infinite precision, probably have no bearing on pragmatic business decisions. You should always choose imperfect but relevant measurements over arbitrarily precise and irrelevant measurements.
STACEY: Measures just need to have enough precision to give you the signals you need to make meaningful improvements to the business. Makes sense. Thanks Doug for sharing your ideas.
#61 A Performance Measure Self-Assessment Checklist
Where do you start improving your organisation's performance measures? What kinds of things could you improve about how your organisation measures its performance? In what ways are you already good at performance measurement?
These questions may not be exactly keeping you awake at night, but certainly by answering them, you could both save a lot of time and effort in the process of getting better measures to manage your organisation's performance. That's because with the answers to these questions you can decide where to focus your efforts to make performance measurement work better.
So to give you a start in answering these questions, here is a rough-and-ready checklist of the key criteria to assess where your current performance measurement system is working well, well enough, or needs more work. Tick it if you do it well. Tally up your ticks for each section and start exploring how you might improve those sections where your tick count is lowest.
1) Selecting performance measures that are meaningful
[ ] The organisation's strategy is the guideline for what should be measured.
[ ] Each performance measure provides objective evidence of the degree to which a specific result is occurring over time.
[ ] Ownership of the measures happens.
[ ] No one is responsible for more than 7 (or so) performance measures.
[ ] All performance measures are defined using a consistent definition framework that specifies exactly how each measure will be constructed, reported and used.
[ ] Performance measures are driving the right behaviour (which has been defined).
[ ] The linkages or relationships between all performance measures are understood.
2) Collecting performance measure data that is reliable and relevant
[ ] Only relevant and useful data is collected.
[ ] There is a policy that makes explicit the degree of integrity required of data for each measure.
[ ] The data collection tools that used throughout the business are designed to collect data with the degree of trustworthiness required.
[ ] Each data item collected is defined consistently as part of a 'data dictionary' for the organisation.
[ ] Data collection processes dovetail into work processes seamlessly with minimum, if any, disruption to operational effectiveness or efficiency.
3) Storing and managing performance measure data for easy and quick access
[ ] Data capture is simple, effective and maintains data integrity.
[ ] Data can be easily accessed by those who need it, when it is needed.
[ ] Historical data is readily available when required (historical data means data that is more than a couple of years old).
4) Analysing performance measure data to reveal the data's story
[ ] All data analyses performed, whether internal or external to our organisation, are focused on answering pre-defined driving questions.
[ ] Statistical techniques are used validly and appropriately.
[ ] Variation in the performance of business processes is measured (not % differences, true statistical variation).
5) Presenting performance measures to make interpretation easy and valid
[ ] All performance reports produced have a clearly defined and understood purpose and a clear target audience (or audiences).
[ ] The physical layout of reports is simple to follow and makes finding information easy and quick.
[ ] Graphs are the preferred method of presenting performance measures (and the correct graph type is used to answer the driving question).
6) Interpreting performance measures to draw the right conclusions
[ ] The owners of performance measures are the people that interpret those performance measures and communicate their conclusions to others.
[ ] Statistical methods (such as statistical process control charts) are used to flag signals in the data (e.g. levels of stability and change in process performance).
[ ] There are consistent and well defined guidelines for interpretation of performance measures (such as a definition of the evidence of a true trend or change in performance levels).
[ ] People involved in using data and information have the appropriate level of skill in interpreting it effectively, efficiently and validly.
7) Applying performance measures to improve performance
[ ] The results of performance improvement decisions are tracked using the same measures of performance that these decisions aimed to improve.
[ ] The results of interpretation of performance measures are an input into our planning review process, taking a visible role in the formulation and evaluation of our business goals & targets.
[ ] The root causes of performance results are identified through further analysis of lead indicators and/or other data.
[ ] Performance improvements are decided upon through application of systemic thinking and are prioritised before they are taken on and implemented.
[ ] Intuition, emotion and gut feel are used to guide further collection and analysis of objective data (both quantitative and qualitative) rather than to drive decision making alone.
These questions may not be exactly keeping you awake at night, but certainly by answering them, you could both save a lot of time and effort in the process of getting better measures to manage your organisation's performance. That's because with the answers to these questions you can decide where to focus your efforts to make performance measurement work better.
So to give you a start in answering these questions, here is a rough-and-ready checklist of the key criteria to assess where your current performance measurement system is working well, well enough, or needs more work. Tick it if you do it well. Tally up your ticks for each section and start exploring how you might improve those sections where your tick count is lowest.
1) Selecting performance measures that are meaningful
[ ] The organisation's strategy is the guideline for what should be measured.
[ ] Each performance measure provides objective evidence of the degree to which a specific result is occurring over time.
[ ] Ownership of the measures happens.
[ ] No one is responsible for more than 7 (or so) performance measures.
[ ] All performance measures are defined using a consistent definition framework that specifies exactly how each measure will be constructed, reported and used.
[ ] Performance measures are driving the right behaviour (which has been defined).
[ ] The linkages or relationships between all performance measures are understood.
2) Collecting performance measure data that is reliable and relevant
[ ] Only relevant and useful data is collected.
[ ] There is a policy that makes explicit the degree of integrity required of data for each measure.
[ ] The data collection tools that used throughout the business are designed to collect data with the degree of trustworthiness required.
[ ] Each data item collected is defined consistently as part of a 'data dictionary' for the organisation.
[ ] Data collection processes dovetail into work processes seamlessly with minimum, if any, disruption to operational effectiveness or efficiency.
3) Storing and managing performance measure data for easy and quick access
[ ] Data capture is simple, effective and maintains data integrity.
[ ] Data can be easily accessed by those who need it, when it is needed.
[ ] Historical data is readily available when required (historical data means data that is more than a couple of years old).
4) Analysing performance measure data to reveal the data's story
[ ] All data analyses performed, whether internal or external to our organisation, are focused on answering pre-defined driving questions.
[ ] Statistical techniques are used validly and appropriately.
[ ] Variation in the performance of business processes is measured (not % differences, true statistical variation).
5) Presenting performance measures to make interpretation easy and valid
[ ] All performance reports produced have a clearly defined and understood purpose and a clear target audience (or audiences).
[ ] The physical layout of reports is simple to follow and makes finding information easy and quick.
[ ] Graphs are the preferred method of presenting performance measures (and the correct graph type is used to answer the driving question).
6) Interpreting performance measures to draw the right conclusions
[ ] The owners of performance measures are the people that interpret those performance measures and communicate their conclusions to others.
[ ] Statistical methods (such as statistical process control charts) are used to flag signals in the data (e.g. levels of stability and change in process performance).
[ ] There are consistent and well defined guidelines for interpretation of performance measures (such as a definition of the evidence of a true trend or change in performance levels).
[ ] People involved in using data and information have the appropriate level of skill in interpreting it effectively, efficiently and validly.
7) Applying performance measures to improve performance
[ ] The results of performance improvement decisions are tracked using the same measures of performance that these decisions aimed to improve.
[ ] The results of interpretation of performance measures are an input into our planning review process, taking a visible role in the formulation and evaluation of our business goals & targets.
[ ] The root causes of performance results are identified through further analysis of lead indicators and/or other data.
[ ] Performance improvements are decided upon through application of systemic thinking and are prioritised before they are taken on and implemented.
[ ] Intuition, emotion and gut feel are used to guide further collection and analysis of objective data (both quantitative and qualitative) rather than to drive decision making alone.
#60 When NOT To Measure Something
We're always talking about why it is so critical to have performance measures, what is most important to measure, how to design meaningful measures, how to measure the intangible things. But there is a lot of value to knowing when measuring something just isn't the best idea.
Don't measure it if you have no intention of managing it.
Is it really responsible to be measuring something you have no intention of doing anything about? If it's because you were told to measure it, then you have at least two choices.
You can talk to whoever has demanded to measure it, and in the spirit of authentic curiosity, explore their and your points of view and negotiate a more meaningful measure, or drop it entirely if your existing measures sufficiently cover the most important results you are responsible for managing.
Or you can talk to whoever has demanded to measure it, also in the spirit of authentic curiosity, ask for their help to determine what kind of response you should be taking to the measure, it's priority over your other measures, and the guidelines for how much of your resources to throw at it when it goes south.
Don't measure it if the cost of measuring outweighs the value of knowing.
Many data collection systems, like surveys, cost lots of money. Especially when you have to consider factors like measuring over wide geographic areas or measuring to high levels of accuracy or measuring very rare phenomena.
Get in the habit of checking if the likely gain of using the measure (like improvement in sales or reduction of waste) has a smaller net impact on the bottom line than does the cost of measuring it. If you can't show a decent positive return on investment for measuring something, don't bother. How else could you have used the time and money to impact your business' or organisation's success?
Don't measure it for old times' sake.
Do you take on more new measures that you let go? Letting go of measures seems to be such a psychological battle - we hang on to them because they're already being tracked and we might need them again someday. Fine. Keep collecting the data (if it doesn't cost too much), but stop reporting the measure!
It's time to test if there is something more important to put that time and resource into. Perhaps to focus on other higher priority measures, or to spend some time designing more meaningful measures for your current strategy. Unimportant measures will slow you down and waste your time and energy.
Don't measure it if it will be a big stick.
Measures have the worst reputation of being used as big sticks to beat people's performance into shape (or to at least attempt this). Measures can be very indispensable in managing people's performance, but the big stick approach means using measures to point blame or CYA.
You'll see a ripple of fear and defensiveness in every direction around the one who yields such a measure, and it will build into a wave of destruction. If you don't have a performance improvement culture, if there is a real risk that the measure will be used as a big stick, then avoid measuring it. Put the time and effort into some open and candid dialogue to explore the results that matter and how to improve them.
Don't measure it if you're already measuring too much.
Drowning in measures? Do you have more measures than you have time and resources to review and improve? Then don't take on any more! Too many measures is often worse than not enough measures. Overwhelm is so much more debilitating than scarcity when it comes to measures. At least with scarcity you have the time and energy to move in the direction of a concise set of meaningful measures. But with overwhelm, you usually feel stuck and unable to move in any direction at all.
Instead of working on more measures, take stock of the measures you have already, cull those that really aren't that important, and put your focus on just 3 or 4 measures at a time, improving performance in all results systematically.
Don't measure it if you have no intention of managing it.
Is it really responsible to be measuring something you have no intention of doing anything about? If it's because you were told to measure it, then you have at least two choices.
You can talk to whoever has demanded to measure it, and in the spirit of authentic curiosity, explore their and your points of view and negotiate a more meaningful measure, or drop it entirely if your existing measures sufficiently cover the most important results you are responsible for managing.
Or you can talk to whoever has demanded to measure it, also in the spirit of authentic curiosity, ask for their help to determine what kind of response you should be taking to the measure, it's priority over your other measures, and the guidelines for how much of your resources to throw at it when it goes south.
Don't measure it if the cost of measuring outweighs the value of knowing.
Many data collection systems, like surveys, cost lots of money. Especially when you have to consider factors like measuring over wide geographic areas or measuring to high levels of accuracy or measuring very rare phenomena.
Get in the habit of checking if the likely gain of using the measure (like improvement in sales or reduction of waste) has a smaller net impact on the bottom line than does the cost of measuring it. If you can't show a decent positive return on investment for measuring something, don't bother. How else could you have used the time and money to impact your business' or organisation's success?
Don't measure it for old times' sake.
Do you take on more new measures that you let go? Letting go of measures seems to be such a psychological battle - we hang on to them because they're already being tracked and we might need them again someday. Fine. Keep collecting the data (if it doesn't cost too much), but stop reporting the measure!
It's time to test if there is something more important to put that time and resource into. Perhaps to focus on other higher priority measures, or to spend some time designing more meaningful measures for your current strategy. Unimportant measures will slow you down and waste your time and energy.
Don't measure it if it will be a big stick.
Measures have the worst reputation of being used as big sticks to beat people's performance into shape (or to at least attempt this). Measures can be very indispensable in managing people's performance, but the big stick approach means using measures to point blame or CYA.
You'll see a ripple of fear and defensiveness in every direction around the one who yields such a measure, and it will build into a wave of destruction. If you don't have a performance improvement culture, if there is a real risk that the measure will be used as a big stick, then avoid measuring it. Put the time and effort into some open and candid dialogue to explore the results that matter and how to improve them.
Don't measure it if you're already measuring too much.
Drowning in measures? Do you have more measures than you have time and resources to review and improve? Then don't take on any more! Too many measures is often worse than not enough measures. Overwhelm is so much more debilitating than scarcity when it comes to measures. At least with scarcity you have the time and energy to move in the direction of a concise set of meaningful measures. But with overwhelm, you usually feel stuck and unable to move in any direction at all.
Instead of working on more measures, take stock of the measures you have already, cull those that really aren't that important, and put your focus on just 3 or 4 measures at a time, improving performance in all results systematically.
#59 You Can't Measure An Ill-Defined Strategy
If you're trying to measure things without first having your strategy - your goals, objectives or priorities - firmly and crisply articulated, then you're probably frustrated by where to start, overwhelmed with too many possible measures, or disappointed because you haven't found the measures that really matter.
That's what many of my consulting clients are experiencing when we first start working together: they have no strategy, or they have a strategy that is too vague, or they have a strategy that hasn't been properly cascaded. The first obstacle to overcoming their measurement problems is to make their strategy measurable. This is one of the powers that great measurement has: to make your goals so tangible, so vivid, that you can't not achieve them!
Here is a checklist of symptoms for a quick and dirty diagnosis as to whether you need a little more work on your strategy, before it will be worthwhile to start on your measures.
Symptom 1: no written record of your goals, objectives or priorities
Do you have a document - like a business plan or plan on a page - that includes a summary of the 3 to 10 priorities for your business or organisation right now? If not, then you probably haven't designed a strategy and are instead just managing day to day. Or maybe you do have a loose strategy but it's either in the CEO's head or keeps changing from week to week. Or perhaps your business plan reads more like an essay that fails to make the highest 3 to 10 priorities clear.
In any case, without a formal announcement of and spotlight on the current goals for the business, no-one has a way of prioritising what to measure, because they have no direction as to which results matter most. They're paralysed by the overwhelm of all the possible things they could measure. Not everything matters enough to be measured. A single, agreed strategic direction narrows down the choices (and streamlines the measurement effort).
So, write down your strategy, let everyone know about it, and keep reminding everyone to pursue it, above all else.
Symptom 2: the strategy is a collection of motherhood statements
If you do have a written strategy, is it expressed clearly, succinctly, tangibly, in language everyone understands and uses comfortably? Or is it written in management-speak, jargon, inert language that could be interpreted 7 different ways by 3 different people? Are you using words like efficient, productive, effective, quality, sustainable and best-practice?
If you could copy and paste your goals into another organisation's strategic plan and no-one would blink an eyelid, then you don't really have goals. Without specific, tangibly expressed goals that make it clear what efficient means, what quality looks like and how you'd recognise sustainable, your measures will fail to provide the right evidence of the right results. Remember, what you measure is what you get, irrespective of what your goals say.
So, make sure your strategy is worded clearly and very specifically so that people can easily understand and relate to the words, and all have a consistent understanding of what it looks, sounds and feels like when it becomes a reality.
Symptom 3: everyone's goals are a carbon copy of the organisation's goals
Does your business cascade its strategy in the way that if cost reduction is a goal for the organisation, then cost reduction is a goal for each and every department and team, function and process? Is every team's plan a "Mini Me"(1) version of the organisation's plan? If so, people throughout the business are likely frustrated, being asked to measure things that have no meaning to them, that don't help them manage their real and most significant contribution to the whole business' performance.
Why distract the Design Department with measures about lost time injuries just because it's a strategic priority? Manufacturing probably have the primary influence on that result. The cause-effect model of cascading will lead to more meaningful measures than the Mini Me model. The Design team's contribution to safety is not in their own injury rate (repetitive strain injury or paper cuts) but rather through the features and manufacturing steps they design into the products that Manufacturing will construct.
So, cascade your strategy not by giving every department a copy of it to scale down, but by asking the question "how does this department most impact our strategic goals?"
The process of measurement can make your strategy better!
No strategy is ever perfect, if only for the fact that the business environment changes continuously and often unpredictably. Don't strive to get your strategy perfect before you start measuring, or you'll never end up executing the strategy successfully. The starting point to measuring is a strategy that doesn't show the above symptoms in the extreme. And when you get started with designing measures, you'll find it seduces you to reflect on and refine your strategy even further!
(1) Mini Me is the tiny clone of Dr Evil, both characters in the Austin Powers movies.
That's what many of my consulting clients are experiencing when we first start working together: they have no strategy, or they have a strategy that is too vague, or they have a strategy that hasn't been properly cascaded. The first obstacle to overcoming their measurement problems is to make their strategy measurable. This is one of the powers that great measurement has: to make your goals so tangible, so vivid, that you can't not achieve them!
Here is a checklist of symptoms for a quick and dirty diagnosis as to whether you need a little more work on your strategy, before it will be worthwhile to start on your measures.
Symptom 1: no written record of your goals, objectives or priorities
Do you have a document - like a business plan or plan on a page - that includes a summary of the 3 to 10 priorities for your business or organisation right now? If not, then you probably haven't designed a strategy and are instead just managing day to day. Or maybe you do have a loose strategy but it's either in the CEO's head or keeps changing from week to week. Or perhaps your business plan reads more like an essay that fails to make the highest 3 to 10 priorities clear.
In any case, without a formal announcement of and spotlight on the current goals for the business, no-one has a way of prioritising what to measure, because they have no direction as to which results matter most. They're paralysed by the overwhelm of all the possible things they could measure. Not everything matters enough to be measured. A single, agreed strategic direction narrows down the choices (and streamlines the measurement effort).
So, write down your strategy, let everyone know about it, and keep reminding everyone to pursue it, above all else.
Symptom 2: the strategy is a collection of motherhood statements
If you do have a written strategy, is it expressed clearly, succinctly, tangibly, in language everyone understands and uses comfortably? Or is it written in management-speak, jargon, inert language that could be interpreted 7 different ways by 3 different people? Are you using words like efficient, productive, effective, quality, sustainable and best-practice?
If you could copy and paste your goals into another organisation's strategic plan and no-one would blink an eyelid, then you don't really have goals. Without specific, tangibly expressed goals that make it clear what efficient means, what quality looks like and how you'd recognise sustainable, your measures will fail to provide the right evidence of the right results. Remember, what you measure is what you get, irrespective of what your goals say.
So, make sure your strategy is worded clearly and very specifically so that people can easily understand and relate to the words, and all have a consistent understanding of what it looks, sounds and feels like when it becomes a reality.
Symptom 3: everyone's goals are a carbon copy of the organisation's goals
Does your business cascade its strategy in the way that if cost reduction is a goal for the organisation, then cost reduction is a goal for each and every department and team, function and process? Is every team's plan a "Mini Me"(1) version of the organisation's plan? If so, people throughout the business are likely frustrated, being asked to measure things that have no meaning to them, that don't help them manage their real and most significant contribution to the whole business' performance.
Why distract the Design Department with measures about lost time injuries just because it's a strategic priority? Manufacturing probably have the primary influence on that result. The cause-effect model of cascading will lead to more meaningful measures than the Mini Me model. The Design team's contribution to safety is not in their own injury rate (repetitive strain injury or paper cuts) but rather through the features and manufacturing steps they design into the products that Manufacturing will construct.
So, cascade your strategy not by giving every department a copy of it to scale down, but by asking the question "how does this department most impact our strategic goals?"
The process of measurement can make your strategy better!
No strategy is ever perfect, if only for the fact that the business environment changes continuously and often unpredictably. Don't strive to get your strategy perfect before you start measuring, or you'll never end up executing the strategy successfully. The starting point to measuring is a strategy that doesn't show the above symptoms in the extreme. And when you get started with designing measures, you'll find it seduces you to reflect on and refine your strategy even further!
(1) Mini Me is the tiny clone of Dr Evil, both characters in the Austin Powers movies.
#58 The Engine Under The Hood Of Performance Measurement
Donald Rumsfeld said, “…we don’t know what we don’t know.”
In a climate of increased competition and diminishing resources, organisations are seeking ways of creating a distinctive ‘edge’ over their competitors and identifying operational efficiencies. Organisations are adopting analytics to meet these needs.
So what does ‘analytics’ actually mean?
Despite centuries of use we all have our own interpretation or definition. Even the Roman Empire used analytics to understand their regional dominance. For example early analytics underpinned the first noted census in 443 BC which they then used as a decision making tool to understand the services required for the efficient running of their economy.
Today mathematics and enumeration are commonly used forms of analytics. They measure with accuracy activities within the economy and drive effective resource planning. Mathematics has also led to the formation of statistical analysis. This involves the science of approximation and explanation, not only how things fit together, but what will happen in the future.
Analytics is a practice of sifting through and analysing whatever data you have to reveal trends, correlations, and other patterns in the data that help you answer questions like:
* Why are we getting these performance results (as indicated by our performance measures)?
* What changes could we make to get better performance results?
* What performance results are we likely to get in the future?
What does 'analytics' do?
As businesses and governments have more data available and more complex issues to solve, the convergence of traditional enumeration and statistical analysis has occurred. Analytics underpins both qualitative and quantitative output, so organisations can describe what has happened and what will happen consistently, reliably and with validity.
These analytics techniques are applied in today’s world to determine such things as the identity of fraudulent activities or whether a specific demographic will take up a government service. Commercial organisations use analytics to market their industry presence, or to competitively determine the drivers of the market and how to acquire that market share. It helps them understand their distinction, how to drive that distinction and to maintain the edge over their competition.
Analytics is the union of rigourous statistical analysis techniques with technology that makes data more easily accessible and automates the analysis. So you don't have to have statistical or IT expertise to do it.
Why go down the 'analytics' path?
Analytics allows managers and decision makers to:
* optimise key business processes by pinpointing the factors that most influence overall process results;
* identify the best customers by understanding customer preferences and buying behaviours;
* choose the right policy by exploring the impacts of different actions on possible future outcomes;
* minimise inventory and maximise the availability in supply chains; and
* allocate costs accurately and understand how financial performance is driven.
Analytics is the engine behind real performance measurement. It gives you the information that helps you isolate the causes of poor performance, and the points of leverage to accelerate performance improvement.
In a climate of increased competition and diminishing resources, organisations are seeking ways of creating a distinctive ‘edge’ over their competitors and identifying operational efficiencies. Organisations are adopting analytics to meet these needs.
So what does ‘analytics’ actually mean?
Despite centuries of use we all have our own interpretation or definition. Even the Roman Empire used analytics to understand their regional dominance. For example early analytics underpinned the first noted census in 443 BC which they then used as a decision making tool to understand the services required for the efficient running of their economy.
Today mathematics and enumeration are commonly used forms of analytics. They measure with accuracy activities within the economy and drive effective resource planning. Mathematics has also led to the formation of statistical analysis. This involves the science of approximation and explanation, not only how things fit together, but what will happen in the future.
Analytics is a practice of sifting through and analysing whatever data you have to reveal trends, correlations, and other patterns in the data that help you answer questions like:
* Why are we getting these performance results (as indicated by our performance measures)?
* What changes could we make to get better performance results?
* What performance results are we likely to get in the future?
What does 'analytics' do?
As businesses and governments have more data available and more complex issues to solve, the convergence of traditional enumeration and statistical analysis has occurred. Analytics underpins both qualitative and quantitative output, so organisations can describe what has happened and what will happen consistently, reliably and with validity.
These analytics techniques are applied in today’s world to determine such things as the identity of fraudulent activities or whether a specific demographic will take up a government service. Commercial organisations use analytics to market their industry presence, or to competitively determine the drivers of the market and how to acquire that market share. It helps them understand their distinction, how to drive that distinction and to maintain the edge over their competition.
Analytics is the union of rigourous statistical analysis techniques with technology that makes data more easily accessible and automates the analysis. So you don't have to have statistical or IT expertise to do it.
Why go down the 'analytics' path?
Analytics allows managers and decision makers to:
* optimise key business processes by pinpointing the factors that most influence overall process results;
* identify the best customers by understanding customer preferences and buying behaviours;
* choose the right policy by exploring the impacts of different actions on possible future outcomes;
* minimise inventory and maximise the availability in supply chains; and
* allocate costs accurately and understand how financial performance is driven.
Analytics is the engine behind real performance measurement. It gives you the information that helps you isolate the causes of poor performance, and the points of leverage to accelerate performance improvement.
#57 The Ingredients Of Accountability
In a recent article in the Performance Improvement journal, William Liccione presents a model that estimates a person's motivation to accomplish their assigned goals based on the relationship between factors like goal commitment, instrumentality to attain the goal, expectancy of receiving compensation, the value of the compensation and the fairness relative to compensation given to others.
This article inspired me to think about the relationship of motivation to accountability, a word that is bandied around a lot in workplaces today, without much practical discussion about exactly what it means nor exactly how to get it. In essence, it's the pointy end of responsibility - that when you are responsible for getting something done, you will need to show account (show a count?) of having gotten it done, or bear the consequences of not.
So if we want more accountability, what are the things we need to pay attention to?
Ingredient #1: Clear, clear, clear goals
What exactly is the person accountable for? How similar is the vision in your head to the vision in their head about what it looks like when their goals are attained? Get rid of ambiguity, inert language, all-encompassing broadness and keep the number of goals manageable (e.g. 3 to 7 priority goals per person).
Ingredient #2: Personal interest in pursuing those goals
Does the person care about the goals? What's in it for them? You know how hard it is to apply yourself to a task you just don't want to do - like vacuuming under the rug, cleaning out leaves from the roof gutters, giving high pressure sales presentations to disinterested audiences. Craft goals with the person, not for them. And help them explore the most ways they can contribute the best of themselves to their work.
Ingredient #3: Belief that the goals are attainable
Has the person got (or will they get) all the resources and time and knowledge and skill to pursue and attain their goals? Do they believe they will have these things? How much fear do they have about not attaining the goals? When you are choosing and designing goals, it helps to draft the action plan at the same time to both check that the goals are attainable and to pace the person through their objections and concerns about their ability to achieve them.
Ingredient #4: Belief that attaining the goal is worth their effort
Do they want to attain the goal enough that they are willing to pay the price to achieve it? Is the size of the reward for them large enough to compensate the extra mile they'll need to go to attain the goal? Discuss and agree the rewards up front, and contrast the having of those rewards against the time, effort, frustration, fear and whatever other price the person must pay to take on the goals.
Ingredient #5: Buy-in to objective measures that will track the goal
Are they confident that the measures chosen to monitor progress toward the goal - and evidence its attainment - are fair and useful measures? Do they believe that the measures are a true reflection of their progress and that, through their constructive goal-pursuing actions, they can affect the trends of these measures? Design the measures collaboratively at same time you design the goals.
I've written here about accountability of individual people, but I wonder how different the ingredients list would be for organisational accountability?
This article inspired me to think about the relationship of motivation to accountability, a word that is bandied around a lot in workplaces today, without much practical discussion about exactly what it means nor exactly how to get it. In essence, it's the pointy end of responsibility - that when you are responsible for getting something done, you will need to show account (show a count?) of having gotten it done, or bear the consequences of not.
So if we want more accountability, what are the things we need to pay attention to?
Ingredient #1: Clear, clear, clear goals
What exactly is the person accountable for? How similar is the vision in your head to the vision in their head about what it looks like when their goals are attained? Get rid of ambiguity, inert language, all-encompassing broadness and keep the number of goals manageable (e.g. 3 to 7 priority goals per person).
Ingredient #2: Personal interest in pursuing those goals
Does the person care about the goals? What's in it for them? You know how hard it is to apply yourself to a task you just don't want to do - like vacuuming under the rug, cleaning out leaves from the roof gutters, giving high pressure sales presentations to disinterested audiences. Craft goals with the person, not for them. And help them explore the most ways they can contribute the best of themselves to their work.
Ingredient #3: Belief that the goals are attainable
Has the person got (or will they get) all the resources and time and knowledge and skill to pursue and attain their goals? Do they believe they will have these things? How much fear do they have about not attaining the goals? When you are choosing and designing goals, it helps to draft the action plan at the same time to both check that the goals are attainable and to pace the person through their objections and concerns about their ability to achieve them.
Ingredient #4: Belief that attaining the goal is worth their effort
Do they want to attain the goal enough that they are willing to pay the price to achieve it? Is the size of the reward for them large enough to compensate the extra mile they'll need to go to attain the goal? Discuss and agree the rewards up front, and contrast the having of those rewards against the time, effort, frustration, fear and whatever other price the person must pay to take on the goals.
Ingredient #5: Buy-in to objective measures that will track the goal
Are they confident that the measures chosen to monitor progress toward the goal - and evidence its attainment - are fair and useful measures? Do they believe that the measures are a true reflection of their progress and that, through their constructive goal-pursuing actions, they can affect the trends of these measures? Design the measures collaboratively at same time you design the goals.
I've written here about accountability of individual people, but I wonder how different the ingredients list would be for organisational accountability?
#56 Criteria Checklist For Excellent Measures
Not everyone wants to (or indeed needs to) throw out their existing measures just because they aren't perfect. To make sure you don't throw the baby out with the bathwater, evaluate your measures using the following simple checklist and you might be surprised at the ideas you get to improve your not-quite-right measures, and cast a keener spotlight on those measures that really should be thrown away.
Oh, and a word of warning: No list of criteria is ever complete or ever totally correct. So as you read these and apply them, tune into the purpose of the criteria if the prescription just doesn't fit.
1. Does it have clear link to strategy?
For your measure to be excellent, it must have a clear line of sight to your business direction - to your strategic goals or priorities. If you are measuring something and improving it won't make any significant contribution to achieving your strategy or goals, do you really need to measure it? (Idea: design your measures at the same time you formulate your goals.)
2. Is it owned by someone?
Unless your measure is officially owned by someone - not a department, not a team, but a person - it's super likely that it isn't being used to make performance improve. It may not even be properly reported. Measures need an owner to make sure it is reported and used for the benefit of the business. (Idea: find a person who has enough authority to respond to the measure.)
3. Can it be brought to life?
Vague ideas, surveys and kooky acronyms are not measures. A measure needs to be spelled out in enough detail that you can know exactly how to calculate it, how often and from which data. (Idea: define the details of bringing your measure to life to test its viability.)
4. Are you able to track it regularly over time?
Before and after measures (which is what annual measures usually end up being) don't give enough feedback to manage improvement efforts. Your measure must be tracked regularly enough (such as monthly or weekly) to give you clues about whether your improvement efforts are working, before it's too late. (Idea: measure more frequently or find a lead indicator that you can measure more frequently.)
5. Does it give you more value than it costs?
Measurement doesn't happen for free. But you need to be confident that the costs associated with its design, data collection and reporting are less than the benefits it brings to your business, which is usually through decision making and the resulting improvements you get for your bottom line or your stakeholder value. (Idea: remove waste and duplication from data collection and reporting, e.g. use sampling instead of measuring it all.)
6. Do users understand it?
If your measure is a convoluted index of other measures, or it's calculation is difficult to explain in everyday language, it can make using it too daunting a job. (Idea: borrow from Ockam's Razor and find the simplest measure that can convey the needed information.)
7. Does it inspire the right behaviour?
If your measure is not encouraging people to choose performance-improving behaviour over sweep-it-under-the-rug behaviour, it's a candidate for throwing out. The measures that are the most potent in improving business performance are those that make it obvious - even unconscious - the right actions to take to get better performance results. (Idea: involve staff in designing the measures so they have more understanding and buy-in.)
These seven criteria are a good basis to judge your measures. You might like to make up a grid with your measures listed down the rows and these criteria listed across the columns. You can then do a quick evaluation of your existing measures, and see at a glance which to keep, which need some work, and which should probably been thrown away!
Oh, and a word of warning: No list of criteria is ever complete or ever totally correct. So as you read these and apply them, tune into the purpose of the criteria if the prescription just doesn't fit.
1. Does it have clear link to strategy?
For your measure to be excellent, it must have a clear line of sight to your business direction - to your strategic goals or priorities. If you are measuring something and improving it won't make any significant contribution to achieving your strategy or goals, do you really need to measure it? (Idea: design your measures at the same time you formulate your goals.)
2. Is it owned by someone?
Unless your measure is officially owned by someone - not a department, not a team, but a person - it's super likely that it isn't being used to make performance improve. It may not even be properly reported. Measures need an owner to make sure it is reported and used for the benefit of the business. (Idea: find a person who has enough authority to respond to the measure.)
3. Can it be brought to life?
Vague ideas, surveys and kooky acronyms are not measures. A measure needs to be spelled out in enough detail that you can know exactly how to calculate it, how often and from which data. (Idea: define the details of bringing your measure to life to test its viability.)
4. Are you able to track it regularly over time?
Before and after measures (which is what annual measures usually end up being) don't give enough feedback to manage improvement efforts. Your measure must be tracked regularly enough (such as monthly or weekly) to give you clues about whether your improvement efforts are working, before it's too late. (Idea: measure more frequently or find a lead indicator that you can measure more frequently.)
5. Does it give you more value than it costs?
Measurement doesn't happen for free. But you need to be confident that the costs associated with its design, data collection and reporting are less than the benefits it brings to your business, which is usually through decision making and the resulting improvements you get for your bottom line or your stakeholder value. (Idea: remove waste and duplication from data collection and reporting, e.g. use sampling instead of measuring it all.)
6. Do users understand it?
If your measure is a convoluted index of other measures, or it's calculation is difficult to explain in everyday language, it can make using it too daunting a job. (Idea: borrow from Ockam's Razor and find the simplest measure that can convey the needed information.)
7. Does it inspire the right behaviour?
If your measure is not encouraging people to choose performance-improving behaviour over sweep-it-under-the-rug behaviour, it's a candidate for throwing out. The measures that are the most potent in improving business performance are those that make it obvious - even unconscious - the right actions to take to get better performance results. (Idea: involve staff in designing the measures so they have more understanding and buy-in.)
These seven criteria are a good basis to judge your measures. You might like to make up a grid with your measures listed down the rows and these criteria listed across the columns. You can then do a quick evaluation of your existing measures, and see at a glance which to keep, which need some work, and which should probably been thrown away!
#55 Three Risks Of Off The Shelf Measures
Do you go looking for measures that your organisation or team can adopt? Do you trawl through the annual reports of organisations in your industry? Do you survey your colleagues at industry conferences, do you search for KPIs in your industry on the internet? Do you ask the so-called experts what measures you should be using? Are these your only strategies for finding the most meaningful measures for your goals? Yes? Oops! You're probably about to take a tumble into one of the following traps!
The "how-do-I-actually-measure-this" trap.
You've got your list of measures that you hunted and gathered from various sources, and now you want to start implementing them. Only the information you have about them is too thin and you can't figure out how it should be calculated and what kind of data to use and how frequently to measure it! In fact, the more you think about those measures, the more confused you are about what they actually mean.
The "why-aren't-my-staff-buying-in-to-these-measures" trap.
It's true that measurement of performance is not everyone's favourite task to turn to when some free time comes up. No. Most organisations that are starting out with measurement really don't have a healthy measurement culture, where people are all about using measures as feedback for ongoing business improvement. Handing them some measures-we-prepared-earlier is like handing them the stick you're about to bop them on the head with. And you want them to happily and cheerfully own these measures!
The "hang-on-these-measures-don't-match-our-goals" trap.
Adopt someone else's measures and you're adopting their strategy. Did you know that some organisations treat their performance measures as part of their intellectual property and competitive advantage, and refuse to let anyone outside the organisation know what they are? There's a good reason for this. Measures (when they are well designed) tell the complete story of an organisation's direction and journey in that direction. They give knowledge to the leaders and decision makers that is priceless, and this is possible because those measures were designed very specifically to match the organisation's unique goals and strategic direction.
Know and understand your goals, and design the right measures.
Searching around for ideas about what measures to use is not the problem. In fact, it's a good idea to help you build your list of potential measures. But not until you first understand the results you are most needing to measure, so you have a sensible filter to discard potential measures that really aren't right for you and to keep the measures that make the most sense to your strategy, and to your team.
The "how-do-I-actually-measure-this" trap.
You've got your list of measures that you hunted and gathered from various sources, and now you want to start implementing them. Only the information you have about them is too thin and you can't figure out how it should be calculated and what kind of data to use and how frequently to measure it! In fact, the more you think about those measures, the more confused you are about what they actually mean.
The "why-aren't-my-staff-buying-in-to-these-measures" trap.
It's true that measurement of performance is not everyone's favourite task to turn to when some free time comes up. No. Most organisations that are starting out with measurement really don't have a healthy measurement culture, where people are all about using measures as feedback for ongoing business improvement. Handing them some measures-we-prepared-earlier is like handing them the stick you're about to bop them on the head with. And you want them to happily and cheerfully own these measures!
The "hang-on-these-measures-don't-match-our-goals" trap.
Adopt someone else's measures and you're adopting their strategy. Did you know that some organisations treat their performance measures as part of their intellectual property and competitive advantage, and refuse to let anyone outside the organisation know what they are? There's a good reason for this. Measures (when they are well designed) tell the complete story of an organisation's direction and journey in that direction. They give knowledge to the leaders and decision makers that is priceless, and this is possible because those measures were designed very specifically to match the organisation's unique goals and strategic direction.
Know and understand your goals, and design the right measures.
Searching around for ideas about what measures to use is not the problem. In fact, it's a good idea to help you build your list of potential measures. But not until you first understand the results you are most needing to measure, so you have a sensible filter to discard potential measures that really aren't right for you and to keep the measures that make the most sense to your strategy, and to your team.
#54 What 'Balanced' Really Means For Measures
When most of us hear the term 'balanced measures' we see the Balanced Scorecard flash before our eyes. The success of this decade-and-a-half old framework has been both a windfall and a worry. Yes, our mid-1990's fever for good measures that actually measured what mattered was somewhat tempered by Kaplan and Norton's medicine. But it's unprecedented success brought on a new fever: the expectation that a balanced suite of measures is a simple plug-and-play bolt-on to your business' performance scorecard. No thinking required, just grab some KPIs and stick 'em in the right perspective (financial, customers, internal processes or learning and growth).
Many of the organisations I work with share with me this rationale for seeking help from a performance measure specialist: the Balanced Scorecard hasn't made measurement any easier for us. They aren't using the four original Balanced Scorecard perspectives, and if they are, they aren't really comfortable with the fit to their unique organisation. The natural remedy is to turn our brains back on, and think more deeply about what balance really means to our unique organisation, BEFORE we worry about balanced measures. Here are some prompts that will help you improve the balance in your organisation's overall performance.
Stakeholder Groups
How does each stakeholder group with some investment in your organisation define success for your organisation? What's important to your shareholders, regulators, owners, customers, partners, employees, and community, important enough that doing it better would mean they feel your organisation is more successful, and they ramp up their support for it's future success?
Business Processes
How you do business is more important that what business you do. Your end-to-end processes impact very significantly on the results your organisation gets through their very design. What are the impacts of service delivery, research and development, marketing and sales, procurement, and other essential business processes on your overall organisational success? Ignoring any of the important processes is balance-heresy, and makes it too easy for parts to succeed at the expense of the whole organisation.
Strategic, Tactical and Operational
You don't have one scorecard, a single basket of measures. If any one person in the organisation wants to know all the measures throughout the organisation, they are micro-managing and thus mis-managing. Which results are strategic, which are tactical, which are operational? Better balance comes hence when there is a logical cause-effect relationship between these layers of results (and thus their measures). This balance does wonders for throwing resources at the right initiatives for success.
Lead Versus Lag
If you're like me, you are completely over hearing the "driving a car by looking in the rear vision mirror" metaphor for managing organisational performance with lag measures. But it's still a good point. Which results are the end products or ultimate outcomes for your organisation? Measures of these are your lag measures, and it's still important to track them. Which results offer clues about what those end products or ultimate outcomes might look like in the future, based on how things are now? Measures of these are your lead measures, and you need to track these too!
Short Term, Medium Term, Long Term
The Japanese apparently plan with future generations in mind, decades into the future. The Western world considers long term planning to be 5 or maybe 10 years from now, but really only manages within a 12 month timeframe. Better balance will come from sorting which results are day to day, which are month to month, which are year to year, and which are truly longer term. This balance helps put the right measures into the right decision processes.
Test your strategy for balance before you design measures.
One of the most frequent reasons (if not the supreme reason) for poorly balanced measures is starting with a poorly designed strategy. If your strategic plan reads like a case study of motherhood statements and management-speak, you're in trouble. Tease out the results you understand this strategy to be implying (dig deeper behind the jargon) and examine those results for balance using the above prompts to get you started.
Many of the organisations I work with share with me this rationale for seeking help from a performance measure specialist: the Balanced Scorecard hasn't made measurement any easier for us. They aren't using the four original Balanced Scorecard perspectives, and if they are, they aren't really comfortable with the fit to their unique organisation. The natural remedy is to turn our brains back on, and think more deeply about what balance really means to our unique organisation, BEFORE we worry about balanced measures. Here are some prompts that will help you improve the balance in your organisation's overall performance.
Stakeholder Groups
How does each stakeholder group with some investment in your organisation define success for your organisation? What's important to your shareholders, regulators, owners, customers, partners, employees, and community, important enough that doing it better would mean they feel your organisation is more successful, and they ramp up their support for it's future success?
Business Processes
How you do business is more important that what business you do. Your end-to-end processes impact very significantly on the results your organisation gets through their very design. What are the impacts of service delivery, research and development, marketing and sales, procurement, and other essential business processes on your overall organisational success? Ignoring any of the important processes is balance-heresy, and makes it too easy for parts to succeed at the expense of the whole organisation.
Strategic, Tactical and Operational
You don't have one scorecard, a single basket of measures. If any one person in the organisation wants to know all the measures throughout the organisation, they are micro-managing and thus mis-managing. Which results are strategic, which are tactical, which are operational? Better balance comes hence when there is a logical cause-effect relationship between these layers of results (and thus their measures). This balance does wonders for throwing resources at the right initiatives for success.
Lead Versus Lag
If you're like me, you are completely over hearing the "driving a car by looking in the rear vision mirror" metaphor for managing organisational performance with lag measures. But it's still a good point. Which results are the end products or ultimate outcomes for your organisation? Measures of these are your lag measures, and it's still important to track them. Which results offer clues about what those end products or ultimate outcomes might look like in the future, based on how things are now? Measures of these are your lead measures, and you need to track these too!
Short Term, Medium Term, Long Term
The Japanese apparently plan with future generations in mind, decades into the future. The Western world considers long term planning to be 5 or maybe 10 years from now, but really only manages within a 12 month timeframe. Better balance will come from sorting which results are day to day, which are month to month, which are year to year, and which are truly longer term. This balance helps put the right measures into the right decision processes.
Test your strategy for balance before you design measures.
One of the most frequent reasons (if not the supreme reason) for poorly balanced measures is starting with a poorly designed strategy. If your strategic plan reads like a case study of motherhood statements and management-speak, you're in trouble. Tease out the results you understand this strategy to be implying (dig deeper behind the jargon) and examine those results for balance using the above prompts to get you started.
#53 Measure Your New Year's Resolutions!
I love this time of year, when we symbolise through our New Year's resolutions the fact that we get another chance to renew ourselves in some way. It might be our health, or our career, or our devotion to something bigger than ourselves - we lift out one or more specific goals and pursue them with all our heart. As you now solemnly resolve to yourself to achieve these personally important things this year, why not take it seriously enough to actually measure? You know you are far more likely to achieve something if you get regular feedback about it, so here are some simple steps to help you keep your eye on this year's most important goals for you:
STEP 1: Write down each of your resolutions as a goal.
As the clock struck midnight on December 31, you may have closed your eyes and muttered under your breath "This year I resolve to..." Taking your New Year's resolution seriously means going a few steps further, and the first is to write down each resolution as a goal statement - preferably on a colourful piece of card or paper in big clear words that you can easily read.
STEP 2: Make your goal sensory rich.
"This year I promise to get healthy". Not good enough, I'm afraid. If you seriously want to achieve your goal, you have to make it so intensely real in your mind that a part of you almost believes you've already achieved it. What do you mean by healthy? Do you mean lose enough kilograms to slip easily into a size 10 pair of Levis? Or do you mean be able to run 5 kilometres in less than 25 minutes without your heart rate going above 150 beats per minute and feeling elated and comfortable the whole distance? Make your goal real in your mind so you can feel, touch, hear, see, smell and taste it - direct the movie of arriving at your goal for your mind to experience in full.
STEP 3: Choose the measures that will keep you on the path.
Select between 1 and 3 measures for your goal. Enough to keep you focused but not too many that measuring becomes a chore. You might like to have 1 or 2 quantitative measures (such as weight or % body fat or waistline measurement) and balance this with 1 or 2 qualitative measures (such as your self-confidence or how loose your clothes feel or how well you feel you're sticking to the path toward your goal). You may find it useful to measure not just your end goal (e.g. your weight), but the little changes you need to work on in order to achieve it (e.g. calories you eat and exercise frequency).
STEP 4: Set up your measurement regime.
Discipline is called for here. Quickly establish the habit of collecting the data that tracks your progress toward your goal, calculating your measures' values and charting them so you can see the entire journey toward your goal. How often should you collect the data (e.g. daily or weekly)? When exactly will you collect the data (e.g. every Monday and Thursday mornings)? What method will you use to collect the data (e.g. scales or a tape measure)? Where will you collect the data (e.g. in your bathroom or at the gym)? How will you remind yourself to collect the data (e.g. a sticky note on the bathroom mirror or a recurring reminder in your PDA)?
STEP 5: Start right now, this instant. Don't dilly-dally!
Grab some coloured paper or card. Write down your New Year's resolution goal in the centre. Write down sensory rich words around the goal (better still, draw pictures or paste photos) and create the movie of achieving it in your head right now (close your eyes, take your time). Select 1, 2 or 3 measures to track your goal. Create an Excel spreadsheet or wall chart or journal to start collecting the data and charting it. Go and collect your first set of data for your measures now.
STEP 6: Review your goal every day, at least until you achieve it.
When you wake up in the morning, one of the first things you should see is your goal. When you go to bed at night, one of the last things you should see is your goal. Look at your goal, read it, and play that movie over in your mind (you'll find the movie gets more detailed, clearer and more intense the more you play it). In addition to the actions you choose to take to achieve your goal, reviewing it daily makes you believe it, makes you unconsciously work toward it. It's very powerful, this habit!
Is reaching your goal worth achieving it?
Setting a goal takes very little in comparison to the effort you'll need to put in to reach it. This applies to personal goals like New Year's resolutions and it applies to business or organisational goals too. If my Grandad was still alive, I'm sure he'd say that one of the main reasons we don't achieve our goals is lack of discipline. Becoming more disciplined is one of my important goals for 2007, because there is much I want to achieve and time waits for no-one!
STEP 1: Write down each of your resolutions as a goal.
As the clock struck midnight on December 31, you may have closed your eyes and muttered under your breath "This year I resolve to..." Taking your New Year's resolution seriously means going a few steps further, and the first is to write down each resolution as a goal statement - preferably on a colourful piece of card or paper in big clear words that you can easily read.
STEP 2: Make your goal sensory rich.
"This year I promise to get healthy". Not good enough, I'm afraid. If you seriously want to achieve your goal, you have to make it so intensely real in your mind that a part of you almost believes you've already achieved it. What do you mean by healthy? Do you mean lose enough kilograms to slip easily into a size 10 pair of Levis? Or do you mean be able to run 5 kilometres in less than 25 minutes without your heart rate going above 150 beats per minute and feeling elated and comfortable the whole distance? Make your goal real in your mind so you can feel, touch, hear, see, smell and taste it - direct the movie of arriving at your goal for your mind to experience in full.
STEP 3: Choose the measures that will keep you on the path.
Select between 1 and 3 measures for your goal. Enough to keep you focused but not too many that measuring becomes a chore. You might like to have 1 or 2 quantitative measures (such as weight or % body fat or waistline measurement) and balance this with 1 or 2 qualitative measures (such as your self-confidence or how loose your clothes feel or how well you feel you're sticking to the path toward your goal). You may find it useful to measure not just your end goal (e.g. your weight), but the little changes you need to work on in order to achieve it (e.g. calories you eat and exercise frequency).
STEP 4: Set up your measurement regime.
Discipline is called for here. Quickly establish the habit of collecting the data that tracks your progress toward your goal, calculating your measures' values and charting them so you can see the entire journey toward your goal. How often should you collect the data (e.g. daily or weekly)? When exactly will you collect the data (e.g. every Monday and Thursday mornings)? What method will you use to collect the data (e.g. scales or a tape measure)? Where will you collect the data (e.g. in your bathroom or at the gym)? How will you remind yourself to collect the data (e.g. a sticky note on the bathroom mirror or a recurring reminder in your PDA)?
STEP 5: Start right now, this instant. Don't dilly-dally!
Grab some coloured paper or card. Write down your New Year's resolution goal in the centre. Write down sensory rich words around the goal (better still, draw pictures or paste photos) and create the movie of achieving it in your head right now (close your eyes, take your time). Select 1, 2 or 3 measures to track your goal. Create an Excel spreadsheet or wall chart or journal to start collecting the data and charting it. Go and collect your first set of data for your measures now.
STEP 6: Review your goal every day, at least until you achieve it.
When you wake up in the morning, one of the first things you should see is your goal. When you go to bed at night, one of the last things you should see is your goal. Look at your goal, read it, and play that movie over in your mind (you'll find the movie gets more detailed, clearer and more intense the more you play it). In addition to the actions you choose to take to achieve your goal, reviewing it daily makes you believe it, makes you unconsciously work toward it. It's very powerful, this habit!
Is reaching your goal worth achieving it?
Setting a goal takes very little in comparison to the effort you'll need to put in to reach it. This applies to personal goals like New Year's resolutions and it applies to business or organisational goals too. If my Grandad was still alive, I'm sure he'd say that one of the main reasons we don't achieve our goals is lack of discipline. Becoming more disciplined is one of my important goals for 2007, because there is much I want to achieve and time waits for no-one!
#52 Measurement Tips From Table Tennis
Recently I have been spending some time with my husband playing table tennis in our garage after work. I'm new to table tennis, so it's a steep learning curve. And even though a lot of my attention was on hitting the ball back and landing it on the table instead of skewing it off toward the tool rack or up into the fluorescent lights, I couldn't help reflecting on how similar the experience was to any kind of performance improvement in business. In fact, here are the six tips that learning table tennis (or trying anything new) can teach us about improving the performance of anything:
TIP #1: Be very clear what result you want.
When you start out with something new, aiming to be the best at it straight away is not what I call realistic goal. So rather than set my immediate sights on thrashing my husband by the end of our first table tennis match, my focus was more modestly on just hitting the ball back and having it land where I intended it to go. With such a clear goal in front of you, it's so much easier to reach it, one logical step at a time. (Your eyes know exactly what to look at and what to look for.)
TIP #2: If you're not good at it yet, expect high variability in your performance.
With little skill or knowledge about table tennis, I could only expect to have little control over where I put the ball, and with little control I could only expect to have little predictability in my results - the distance between where I intended the ball to land and where the ball actually landed fluctuated randomly and wildly. Understanding (and measuring) your variability is your baseline - understand this natural variability before you attempt to improve anything.
TIP #3: To really improve, change only one thing at a time.
As simple as table tennis is, there were many things that I could have changed to try for a better result. How I held the paddle, how I positioned my feet, how I moved my wrist, how hard I hit the ball, how accurately I read the spin that my clever husband put on the ball (in his wicked attempts to make my returns even more unpredictable). I found I improved best (very satisfying) when I thought about just one thing to do better, like holding the paddle consistently and at the right angle. Improvement happens so much faster when you bed down one improvement at a time. Trying to figure out the complex interactions among several changes at once is confusing, exhausting and takes many times longer to get results.
TIP #4: Performance will probably grow worse straight after you start improving something.
The moment I became more conscious of how I was holding the table tennis paddle, things got worse. The ball seemed to grow a mind of its own for the next 10 to 15 hits. Yes it did more often land where I intended it to, but it would also unpredictably ping off at the most obscure angles. However, it didn't take long to get a feel for the new grip on the paddle and - lo and behold - the ball began doing mostly what I wanted it to. I had more control! Any kind of performance improvement can have a 'bedding in' period, but then things can grow better almost in an instant.
TIP #5: Keep focused - if you take your mind off it, you lose control again.
Pumped by my quick success at bossing the ping pong ball around, I thought I could let go and relax into the game a little. Big mistake. A few fast and furious returns from my loving husband's paddle made me instantly aware that holding a table tennis paddle wasn't yet second nature. The ping pong ball 'pertwanged' out my control and was at the sole mercy of my husband. So remember, if you take your mind off an improved change before it becomes second nature, you risk losing control again and the variability widens once more.
TIP #6: Get feedback regularly, and don't misinterpret it.
"You're hitting down again!" My husband was sounding like a broken record (now there's a metaphor that's losing relevance!). So again I lifted up my swing to correct for the mistake. "You're hitting down again!" (He's a very patient man.) What?! Then I asked him what he meant and it turned out that his idea of hitting down meant my paddle was at the wrong angle, but I interpreted it to mean my swing was at the wrong angle. Assumptions! So make sure you track the changes made by your improvement frequently enough that you can correct things if they go askew - but make sure you know what the feedback is telling you.
TIP #1: Be very clear what result you want.
When you start out with something new, aiming to be the best at it straight away is not what I call realistic goal. So rather than set my immediate sights on thrashing my husband by the end of our first table tennis match, my focus was more modestly on just hitting the ball back and having it land where I intended it to go. With such a clear goal in front of you, it's so much easier to reach it, one logical step at a time. (Your eyes know exactly what to look at and what to look for.)
TIP #2: If you're not good at it yet, expect high variability in your performance.
With little skill or knowledge about table tennis, I could only expect to have little control over where I put the ball, and with little control I could only expect to have little predictability in my results - the distance between where I intended the ball to land and where the ball actually landed fluctuated randomly and wildly. Understanding (and measuring) your variability is your baseline - understand this natural variability before you attempt to improve anything.
TIP #3: To really improve, change only one thing at a time.
As simple as table tennis is, there were many things that I could have changed to try for a better result. How I held the paddle, how I positioned my feet, how I moved my wrist, how hard I hit the ball, how accurately I read the spin that my clever husband put on the ball (in his wicked attempts to make my returns even more unpredictable). I found I improved best (very satisfying) when I thought about just one thing to do better, like holding the paddle consistently and at the right angle. Improvement happens so much faster when you bed down one improvement at a time. Trying to figure out the complex interactions among several changes at once is confusing, exhausting and takes many times longer to get results.
TIP #4: Performance will probably grow worse straight after you start improving something.
The moment I became more conscious of how I was holding the table tennis paddle, things got worse. The ball seemed to grow a mind of its own for the next 10 to 15 hits. Yes it did more often land where I intended it to, but it would also unpredictably ping off at the most obscure angles. However, it didn't take long to get a feel for the new grip on the paddle and - lo and behold - the ball began doing mostly what I wanted it to. I had more control! Any kind of performance improvement can have a 'bedding in' period, but then things can grow better almost in an instant.
TIP #5: Keep focused - if you take your mind off it, you lose control again.
Pumped by my quick success at bossing the ping pong ball around, I thought I could let go and relax into the game a little. Big mistake. A few fast and furious returns from my loving husband's paddle made me instantly aware that holding a table tennis paddle wasn't yet second nature. The ping pong ball 'pertwanged' out my control and was at the sole mercy of my husband. So remember, if you take your mind off an improved change before it becomes second nature, you risk losing control again and the variability widens once more.
TIP #6: Get feedback regularly, and don't misinterpret it.
"You're hitting down again!" My husband was sounding like a broken record (now there's a metaphor that's losing relevance!). So again I lifted up my swing to correct for the mistake. "You're hitting down again!" (He's a very patient man.) What?! Then I asked him what he meant and it turned out that his idea of hitting down meant my paddle was at the wrong angle, but I interpreted it to mean my swing was at the wrong angle. Assumptions! So make sure you track the changes made by your improvement frequently enough that you can correct things if they go askew - but make sure you know what the feedback is telling you.
#51 How To Find Time To Measure Performance
"We're just so busy and have too much on our plates, but we know we have to find time to measure performance - it's too important not to."
Sound familiar? I've been hearing complaints like this more and more frequently over the last year or two. And you don't have to look too far to see the nasty consequences of trying to do too many things: half-baked strategic direction, most projects under-resourced, staff accumulating too much annual leave, flurries of activities and no-one knows which are working and which are a waste.
Performance measures are even more important when things are busy and chaotic. Well designed measures make priorities clear, give specific and definite direction to activity, and provide feedback so you can avoid wasting time.
The first tip for finding time to measure performance is about reducing the rest of your workload
What is one thing you are doing now, that is less important than getting more control over your workload and your performance?
* Is it a project that you've lost passion for, that just isn't getting the results you need or that you feel compelled to finish just because you started it?
* Are you still doing administrative work that you can easily delegate to an assistant, like typing and formatting documents, basic internet research, sorting and sending emails, organising meetings and workshops, conducting simple surveys or consultations?
* How many hours a day do you give to distractions like chatting over the photocopier, answering the phone any time it rings, checking your email every 15 minutes, starting new tasks that you didn't even plan to do?
* Are you driven by your priorities, or the priorities of other people? Which tasks are you doing that really are not your responsibility, that are dragging you off the path to your most important goals?
Once you identify just one thing less important than having meaningful performance measures, stop doing it (yes, that can be hard and will take a real serve of discipline).
Then, allocate the freed up time to designing and bringing to life performance measures for the results that really do matter most. It will help if you treat this as a project of its own, and plan it properly and resource it sensibly and schedule it in your diary with at least as much importance as anything other appointment you have made.
The second strategy for finding time to measure performance is about reducing the measurement workload itself
How can you save time in designing and bringing to life your measures right now, so you get some runs on the board, so you can start making it a natural part of your work?
* Of all the results you want to measure, which are the 3 most important results to measure now? Just measure these. Leave the rest on the back-burner until you have the first 3 up and running smoothly.
* Can you use a smaller team to draft the measures, and then consult more widely afterwards? Who are the 2 or 3 other people that can help you most in measuring the 3 most important results to you? How can you make it easy for them to help you now?
* Does the data need to be 100% accurate, or is a reliable indication of trends really all you need? What data can you already access or very easily collect to provide your most important measures?
* Where are you collecting data from entire populations when random samples could work well enough?
* Do you really need to put all that effort into an electronic reporting dashboard when some Excel charts in a Word document report will do the job for now?
Focus more on building your momentum for measuring performance, and worry about perfection on your second or third iteration through the performance measurement process. Starting small and deliberately will lay a solid foundation to build more and better measures upon, as you get faster and more skilful at doing performance measurement.
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