#87 How to Bid a Performance Measure Farewell?

There are a few reasons why you may have performance measures you just don't need anymore:

• your strategy or goals have changed, and old measures are no longer relevant to what you're trying to achieve
• you've spent some time designing more meaningful measures, better than the old ones
• you've sharpened your focus and only need a subset of the measures you currently have

In any case, you may feel uncertain about what to do with the measures you no longer need. The idea of just throwing them out entirely might feel liberating, or it might feel a bit rash. But throwing them away is just one option.

Option 1: Throw them away.

Stop collecting the data you no longer need. Stop capturing the data, and stop reporting the measures that are based on that data. Totally eliminate the measures and all the effort behind them from you business or organisation. We do have a tendency to hold onto things we don't need, and they waste time and effort that is much better spent elsewhere.

For example, many contact centres are moving away from measures of average call handling time (AHT) in preference to first-call resolution (FCR), because the former drives behaviour to rush each customer, while the latter is much more customer focused. Why measure something at all if it drives the wrong behaviours?

Option 2: Give them to someone else.

Delegate the measures you no longer want to focus on, to someone who is better positioned to focus on those measures and take responsibility for tracking, interpreting and responding to them. Of course, they still need to be measures that are relevant to the goals of the business!

We also have a tendency to hold onto things that are better done by others. It will free up your time to give to more important performance results by letting go. Just like a CEO that delegates the measurement of operational results to her operational team so she can stay focused on the strategic measures, what measures should you be delegating?

Option 3: Put them on the backburner.

If you have clear definitions for your performance measures, where their calculation and source data are documented, you can safely stop actively reporting a measure knowing that if you ever need it again in the future, you just need to turn it back on again.

It's all still there in the background - just not distracting you as you focus on more important measures. The data is still there, the process for producing the measure is still there, you just have to compute some historic values and then start reporting again should you ever need to.

Finally, mark the occasion.

When you have decided which measures you're saying farewell to, and you've sent them off to someone else, to the backburner or to oblivion, mark the occasion by removing them from your business plans and reports too. Announce the change, and then get everyone refocused on the measures that now matter most.

#86 Are You Too Busy NOT To Measure

"We think performance measures are important, yes, but we just don't have the time for it!"

You'll never hear these words uttered in a business or organisation that is truly successful. And that's because success depends on being able to make measurable progress toward your goals. It's not an accident.

Just look at Google, Marriott, 3M or even Fremantle Ports (winner of the Australian Business Excellence Medal in 2007). They have time to measure not because they're successful. They are successful because they made time to measure!

Beware the downward spiral of being too busy to measure...

If you don't measure what matters, you won't be managing and improving what matters. You'll be chasing what's urgent. And there's a big difference between what matters and what's urgent.

The more you delay getting meaningful measures that focus you on what matters, the more you're wasting time and wasting effort on things that don't matter most. The more time you give to what's urgent, the more you have to delay getting meaningful measures that help you focus on what's important. That's the downward spiral.

How do you make time to measure, when you don't have any time left?

When you're too busy to measure performance, you're actually too busy NOT to measure performance. You need to improve performance, or you'll stay too busy (and performance will just keep sliding).

So finding the time to measure performance is not about finding some spare time hiding somewhere. It's about deciding what you're going to *stop doing* to free up some time!

Aim to liberate a couple of hours a week that you can devote to selecting just a few meaningful measures and implementing them so they can highlight what matters most and help you improve what matters most.

Where can you find a couple of hours a week? Here are some ideas:

• Get very clear about the results that you simply must achieve - the essence of your role or team or department. You can't prioritise anything unless you know what the results are that truly matter.

• Curb distractions by planning your week and each day so that you've scheduled first the tasks that will make real progress toward your priority results. Schedule your 2 hours on performance measurement and performance improvement before you schedule anything less important.

• Delegate or delete administrative tasks that don't directly help you make real progress toward your priority results. Who else could do your data entry, preliminary research or meeting organisation?

• Stop reading emails that don't help you make real progress toward your priority results. It will feel wrong, but it's not wrong. Give it a try. You could easily find an hour a week with this tip alone.

• Cancel or defer projects or initiatives (however exciting they may be) which threaten the time you can give to making real progress toward your priority results. If you're running several races at once, you can't win any of them.

• Build a small buffer into each week, to handle those unexpected but essential tasks that pop up, or to handle the overrun of planned tasks that took longer than you expected. That way, they won't affect other important tasks you've planned (like performance measurement!).

The bottom line is that performance won't ever get better unless you make the time to measure and improve performance. And to make the time, you have to stop doing things that are less important.

#85 Three Measures of Personal Productivity

Most of the talk about performance measures is how they are applied to monitor the performance of an organisation, a business, staff, a project, or a process.

But have you ever used performance measures for your own personal performance? One area that really lends itself to being measured is personal productivity. This is about how well we use our time to achieve whatever goals we've set. Of course, it virtually goes without saying (but let's say it anyway), if you have no goals then you have no way of assessing your productivity!

Personal productivity is something we all have to deal with, particularly when there are personal goals we're striving for, and no end of obstacles and distractions getting in the way of our striving!

So here's a handful of measures, over which you might like to ponder with the question "would it be useful for me to know this?"

Return on time invested (nickname is ROTI)

You have to define what the "return" is for you, and how you'll quantify it. Then you just divide that quantity by the number of hours (or days or whatever) that you've invested in generating that return.

If you're a consultant or solo business owner, for example, your return might be profit. So you could measure the profit your business earns for every hour you invest in your business.

It's a measure that easily leads you to the question "which activities give me the highest return, and how can I do more of those activities?"

Percentage of time spent on priorities

Do you know what your priorities are? Can you recognise when you're working on them, as opposed to things that aren't a priority?

If you can, then by keeping simple records in your Outlook Calendar or diary, you can easily tally up the proportion of your time each week that you gave to your highest priority tasks.

It's a great measure to really appreciate the extent to which we can let distractions and other people's priorities invade our time.

Task cycle time

If there are tasks that you perform time and again, such as preparing for meetings or writing a specific type of report, or recruiting staff, then a little careful analysis might highlight where you can save time that's currently being wasted.

It happens to the best of us - we get carried away with how things are done, and forget to check for better ways of doing them. Measuring the cycle time of your regular tasks can encourage you to ask this question (and hopefully find ways to improve your personal productivity).

These aren't the only measures of personal productivity, of course. But if you're currently measuring nothing about how well you use your time to achieve whatever goals you've set, could one or more of these be a good place to start?

#84 Thirteen Things You Can't Do Without Measures

Measuring performance carries a stigma of being boring, threatening, tedious and difficult to do in a meaningful way. Often these perceptions can be enough to stop people from measuring, and even the clichés like "you can't manage what you don't measure" just don't have enough bite to get people to do it.

If you, or any of your colleagues, need some convincing about the benefits of measuring performance, that it is indeed worth the effort, consider these 13 compelling reasons as you think about one of the goals you've struggled to achieve up to now.

Reason #1: make your goals tangible and more real

Too many people have goals that are vague, motherhood statements that mean 19 different things to 7 different people. How can anyone possibly feel compelled by, or passionate about working toward a goal they cannot see in detail in their mind's eye?

Reason #2: achieve your goals faster

Feedback is the absolute essential process that systems of all kinds - airplanes, oak trees and the human body - use to keep functioning properly. Without feedback that is regular and relevant to your goals, you have no reason to expect to achieve the goal. The more regular and relevant feedback your measures give you, the faster you can act to correct your course toward your goals.

Reason #3: achieve your goals with less effort and waste

You could do the things to pursue your goal that you want to do, that you feel you should do, that others have done, or that seem like a good idea to do. But you will very likely waste effort because you don't know what is working and how much it is working without measures to pinpoint the real results of your actions.

Reason #4: keep your success far from the hands of chance, luck and superstition

Measures put you in a state of knowing what otherwise you would have guessed, assumed or simply never even considered about the progress toward your goals. Without measures, your goals are at the mercy of fear, hope, arrogance, ignorance, the latest fad, impractical theory, unchallenged assumptions and limiting beliefs.

Reason #5: where attention goes, energy flows

Earl Nightingale said decades ago, "you become what you think about". You cannot make real anything you are not giving your attention to through a very frequent routine. Having measures that you regularly monitor helps to keep your attention on the goals you want to make real (and off the things you don't want to make real).

Reason #6: find the points of highest leverage to achieve your goals

When you measure your goals, and see patterns in those measures like shifts or trends, you naturally ask why? And asking why is how you find the root causes of the results you're getting right now. Fixing the root causes (rather than treating the symptoms) gives you faster and bigger influence over reaching your goals.

Reason #7: know without question when your goals are truly achieved

Licking your finger and holding it up to the wind is not going to tell you if your goals have been achieved. Neither will the opinions of other people or your own, conveniently collected anecdotes or even other tenuously related existing measures. Measure your goal directly and deliberately, and never be in doubt as to whether or not (or how much so far) you've achieved it.

Reason #8: forecast future success objectively

Good measures will reveal to you patterns that have occurred in the past and in what ways these patterns are associated with various events, actions or circumstances. So what happens in the future becomes easier to estimate, when you plan how to influence future events, actions or circumstances (or not influence them).

Reason #9: prioritise your strengths and weaknesses

Who's got time to do it all? There will always be more opportunities, more problems, more ideas than we ever have time or energy to give to. Measures help us objectively sift out the strengths most valuable to exploit, and the weaknesses most worthwhile to improve on.

Reason #10: fail less often, and learn more when you do

Each goal your strive for, you will either achieve or not. When you don't achieve a goal, measures help you learn and understand why, so you have more wisdom in striving for future goals. And of course, measures also help you understand why you did achieve the goals you succeeded at.

Reason #11: take calculated risks, not reckless decisions

You can't really make a business successful without investing resources like time and money, and therefore you face the risk of losing these investments or not getting the return that would make the investment worthwhile. Measures help you choose the investments that will support your goals, by quantifying the return that would make the investment worthwhile.

Reason #12: learn faster through systematic testing

Because good measures of your goals give you regular and concrete feedback, you have the opportunity to test various solutions to achieve your goals. It helps you learn quickly what works and what doesn't, so you can do more of what does work and less of what doesn't.

Reason #13: find your core capability, your niche strength

Since measures can tell you what your business is good at, they will also tell you what you're exceptionally good at too. They can help you find what your biggest strength is, that possibly sets your business apart from competitors. Measured results are very convincing, so it's easier to market that niche strength to your advantage.

#83 De-Weasel Your Strategy

I went to a seminar a few years back given by Don Watson, political speech writer and author of two rather confronting and very humorous books:

• Death Sentence: The Decay of Public Language
• Watson's Dictionary of Weasel Words

Both books are a strike at how the language we use in our society is communicating less and less meaning, despite that around 20,000 words are added to the English language every year! Watson, in both books and very lucidly at the seminar I attended, described how business, politics, and even schools and religious organisations are more and more choosing to use "weasel words" to communicate their organisation's purpose, intentions, goals, products, services and performance. Productive, process efficiency, effective, decruited, high value targets, engage, key stakeholders, best value, product offering, strategy elicitation, structural adjustment, sustainable future outcomes, endeavour, and on and on and on.

The implication for performance measurement? They say you can't manage what you don't measure, but before this becomes a relevant cliché to quip, ask yourself how you can even measure what you don't truly understand.

How many words in your strategy are weasel words?

Weasel words are inert, they are incapable of producing a reaction from those that hear (or even utter) them. Especially infected with this vocabulary virus is business, where inert language has taken over almost every corporate document and meeting room like a cancer. It's too easy to find examples to illustrate this point. The first example I noticed at a public display at the airport, and the others from five minutes exploring the internet:

"This unique partnership is a joint effort to leverage the research strength and depth of [the University] to assist [our airport] in better understanding its development objectives and impacts on the surrounding environment as we seek sustainable future outcomes."

"Instilling community confidence is an ongoing objective that aims to ensure we have a sustainable revenue collection system."

"The community housing system is proficient in delivering flexible, quality, cost effective and accountable housing services."

Now, for each of these examples, try to create in your mind a clear, vivid, colourful, life like, detailed movie that tells the story each example is trying to describe. You may have to read them a few times, you may have to guess at what some of the expressions mean, but you probably can't easily get this detailed movie. It's because the language used has left you cold, failed to inspire you, put you to sleep.

Have a look at those things you want to measure - your business goals or objectives or critical success factors (more weasel words!) - and hunt for words that aren't really saying anything, aren't telling the story about what you really what to achieve. Why are those words there? They aren't communicating meaning, which is the purpose of words, so what purpose (or person) are they really serving? How can you make the improvements or differences implied by the words, if people in your organisation aren't going to understand, feel inspired by and thus respond to those words?

What are you really trying to say?

So having caught the weasel words in your crosshairs, what do you do next? Basically, replace them. Use richer, simpler, more descriptive words instead to express your goals and objectives (and so on).

Try to involve your physical senses in the act of understanding the goal better. It's through our senses of sight, hearing, touching/feeling (and smelling and tasting, too) that we take in information about the world around us, and our senses are also a great basis for describing our experiences or ideas to others in a way that they can easily understand. And understanding your goal in sensory terms makes it easier to measure!

#82 When It's Impossible To Measure It

When you're trying to measure a result and just can't seem to find the perfect measure, you're probably in need of a proxy!

What is a proxy measure?

Imagine for a moment that you're the Director for a government agency responsible for building and maintaining the roads in your state or country. And the politicians are asking you to prove that what you're doing is improving the quality of roads. How do you measure the quality of roads, exactly?

And now imagine that you're the passionate creator of an education program designed to scare the rev-headedness out of teenage drivers so they kill and mame themselves and each other far less often. What would convince you the program was working?

Imagine once more, that you own a business whose values include being environmentally friendly. Are you really going to put the effort into understanding, counting and calculating all your employee's carbon footprints?

Good proxy measures are stand-ins that can help you understand the results that matter to you, when you don't yet have the perfect way to measure them. Usually they are measures of correlated results, measures that you'd expect to behave reasonably in sync with a good measure of the real thing.

Why would you use a proxy measure?

Measuring results like those mentioned above poses several challenges that are big enough to drain your commendable intentions to objectively know, and reduce you to a feeble lump that utters "it isn't possible to measure this!"

One challenge is that the result is so broad it's almost a motherhood statement and thus near impossible to make it tangible enough to measure. What is road quality anyway? Is it how long the infrastructure lasts? Is it how comfortable and kind the road surface is for cars and their drivers? Is it a combination of these things?

Another challenge is how to get the data in a way that costs less (hopefully far less) than the value having the data would bring. Imagine the cost of following all those teenagers that attended your program, to track their incidence of road accidents. It probably costs more money they you have just to run the program!

And a third challenge is measuring a result in a way that the right people understand what it means and how they can do something about it. If you told each employee what their carbon footprint was and that they must reduce it, would they really be inspired to action?

Good proxy measures side step these challenges.

How do you find good proxy measures?

An ideal measure of the quality of roads would encompass all the dimensions of road quality - surface roughness, corner camber, corner sharpness, road shoulder condition, traction (there are loads of them). It takes a very long time to construct a meaningful measure like this. In the meantime, a proxy measure might be something like the mean number of kilometres between suspension repairs for cars registered in the locality. A well designed survey of local car owners and/or suspensions shops could inexpensively estimate this.

To get an ideal measure for the impact that a driving accident awareness program has on teenagers' road accidents would involve a study that followed participants in the program and compared their incident rate and severity with a control group of teenagers that didn't participate in the program. Costly. Instead, a proxy measure might be to track the trend in road accidents involving drivers aged between 17 and 19 years. Data readily available from police records.

And even though measuring your carbon footprint is all the rage for the green crowd, it's not nearly as practical and easily understandable as proxy measures like percentage of lunches that are take-away (think of all the packaging) or average number of days to fill the waste basket (if only full waste baskets are emptied).

Good proxy measures aren't perfect, but their trends help you know something about the result you're interested in, quickly and easily.

What are the risks of using proxy measures?

There is a price to pay for proxy measures. Often they only tell you part of the story, and often they are influenced by other forces that can bias or distort your understanding. Often you have little or no control over the data or calculation of the proxy measures.

But when you appreciate their limitations, they can still speak volumes to you about those hard-to-measure results.

Choose them consciously, from a starting point that involves really understanding the different angles or sides of the result you want to measure. Describe your result as tangibly as you can, even if it's not a complete description. Leave your worries about data availability until after you've listed and considered several possible proxy measures. And open your mind as much as possible, by involving out-of-the-box thinkers and giving yourself a few short sessions (instead of one meeting) to consider options.

#81 Five Dangerous Assumptions In Using Measures

The most common methods of analysing data in business these days, and for quite some time into the past, has included moving averages (or rolling averages), trend lines, annual trends (using as few as 3 to 5 years), stacked line charts (with each line representing data for one particular financial year), tables of "% difference" comparisons between this month and this month last year, budget and year to date.

These analyses dangerously influence the interpretation made by their users - and in fact, if each of these analyses is applied to the same set of data, the conclusions drawn are almost always different for each of the analyses!

This seeming-anomaly is due to the fact that each of these analyses are based on assumptions that aren't all that sensible when you consciously examine them.

Dangerous Assumption 1: In "same month" comparisons, last year was normal.

This is when you take a look at performance this month, and compare it to performance in the same month last year, and say, "well things seem to have gotten worse (or better)!"

But honestly, it makes little sense to expect that every November should perform the same! To expect November's variation should be within ±5% (or 3% or 10%) isn't based on any sound reasoning. Just convenience. And how do you know that last November was normal, and a sensible benchmark for this November?

Dangerous Assumption 2: If Excel can calculate a trend line for a set of data, then there must be a trend.

Trend lines are calculated mathematically in a way that places a straight line as close to the middle as possible of a smattering of points in a time series. How far away the points are from the trend line is an indication of how reliable the trend line is in explaining the variation of the points over time.

Large variation means little reliability. And little reliability means no real trend.

Dangerous Assumption 3: The world starts anew on the 1st July every year.

Many analyses of performance focus only on the data from the current financial year, often because it is the overall end result of the financial year that people set targets for and are trying to therefore manage.

But usually this year's performance is a product of last year's performance, and the year before that, and so on. And it's this big picture that we need to understand if we are going to validly interpret what's really going on with performance this year.

Dangerous Assumption 4: The only probable cause for a difference is that something changed.

If you focus on point to point comparisons and your eye picks up a difference, that difference is not necessarily real. It doesn't mean that something has changed.

It might mean that the level of data integrity is less than 100% (it's rare to find any data that has 100% integrity). It might mean that the process or system producing the performance result has less than 100% control over that result (variation is a fact of life - no two things are ever exactly the same, mostly because we can't control every single factor that affects it). Most differences are not the result of a change - most differences are the result of natural variation in stable systems and processes.

If you use time series of 4 or 5 points of data, then you are really only making point to point comparisons, as opposed to truly understanding trends over time (for which you need at least 20 points in the time series).

Dangerous Assumption 5: All changes happen gradually - at least for the data we choose to put moving averages through.

The purpose to moving averages is smoothing out variation (particularly seasonal or cyclical variation) with a view to picking up long term trends.

These analyses are only capable of picking up gradual trends - not sudden shifts. They are not capable of identifying when a shift or trend began or finished. In fact, any analysis that smoothes out or removes variation from your data is a danger to valid interpretation. You have to see all the data in order to assess if there is a real change, and what kind of change it is.

What should you do instead?

The common thread with all of these 5 dangerous assumptions is that none of them help you sort out the two types of variation in your performance values:

1. normal variation, which occurs even when there is no real change in performance (it's just random noise)
   
2. abnormal variation, which occurs when a real change has happened to make performance better or worse (such as a process improvement you've made).

So there are two things you can start doing now to make sure you can see and distinguish both forms of variation in your performance measures:

• look at a larger window of values - say a time series of at least 20 values in a row (e.g. about 2 years of monthly values)
  
• graph the performance values as they are, don't use trend lines or rolling averages or cumulative calculations

If you want to learn more, Donald Wheeler's book "Understanding Variation: The Key to Managing Chaos" is a tremendous resource.

#80 Should You Use A Performance Index?

How cool would it be to have just one, single, solitary performance measure to tell you everything that's going on with your business or organisational performance? You just have to look at this one performance index, and immediately know where you're heading, and what to do about it.

Hmmm. Sounds a bit too much like a crystal ball, the kind that a dark-haired, hoop-earinged russian gypsy would gaze into and see your future. Yet so many people love the idea of the performance measurement equivalent to the crystal ball - the performance index.

What is a performance index?

When you take a raft of performance measures and mathematically combine them into a single figure, you've got yourself a performance index.

This raft of performance measures might be a collection of customer survey questions that get rolled up into a pseudo "overall satisfaction" index. Or perhaps a department's or business group's entire suite of performance measures, cleverly combined into a "current status" indicator.

Sometimes some extra magic is woven into the performance index, in the form of weightings that are given to each performance measure involved, with the intent of allowing the more important measures (or sometimes the better-performing measures) to have more influence in how the overall index looks.

Why do you want to have a performance index?

Too many performance measures to review and analyse is one of the most popular reasons behind the pleas for a performance index. "I don't have time for all these measures! But I don't want to miss out on anything either!"

The performance index is often just some ointment applied to treat symptoms of a deeper problem that many don't realise can be solved directly.

If you have too many measures, then perhaps you're not sharing them around enough among your colleagues, or perhaps your measures aren't displayed in a way that makes for fast and easy and accurate interpretation at a glance. Perhaps you're measuring things that you just don't need to give your attention to?

What price will you pay for a performance index?

The trends of each of the underlying performance measures in your performance index cancel each other out. For example, if cycle time is improving and customer satisfaction is declining, the net effect of these two measures on your performance index is highly diluted. But these are two very important signals for you to see and respond to, that the performance index is hiding from you!

And even if most of the underlying performance measures did lean the same way, and your performance index thus showed some kind of signal itself, what would you do next? You'd probably ask "why?" and then go searching for the answer. And how do you find the answer? You have to detangle the performance measures from the index to find causes. The performance index is just giving you extra work, not saving you any.

Should you use a performance index?

In a word, no. Certainly avoid using a performance index as your first solution to a performance measure overload problem. Much better for the performance of your business or organisation will be your taking time to ensure that you're only measuring the things that matter most, that you're able to quickly and easily and accurately detect the signals in your performance measures, and that you've got readily available information to make cause analysis a natural part of using your performance measures.

Remember that performance measurement is about valuable feedback to inform your future choices and actions toward improving the performance of your business or organisation. Most performance indexes don't have the power to do this.

#79 Five Tips For Using KPI Master Lists

When you start trawling through all the lists of KPIs (or performance measures, which is the term I prefer to use) that are lurking on the internet, you'll see just how many performance measures there are. Thousands. Even within just one industry.

And many of these so-called performance measures aren't in fact measures at all. A performance measure is evidence of the degree to which you are achieving an important result, over time. And that brings us to the first tip for making the best use of KPI master lists:

Tip 1: Know how to recognise a real performance measure from a fake.

"Existence of Business Plans" is not a performance measure. It's the result of an action. "Employee Survey" is not a performance measure. It's a data collection instrument. "Monthly Average Delivery Cycle Time" is a performance measure, because it gives feedback of a result, over time. You'll need to be wise enough to pick out the real measures from the fakes.

Tip 2: Before you even go looking for KPIs, clearly define your priority business results.

To avoid swamping yourself with way too many trivial and irrelevant measures, you need to fish these KPI master lists with a net designed to catch just the types of measures you need. And that net is made from the business results that are your highest priority to achieve. After all, that's what KPIs are for: to give you feedback about the results that matter.

Tip 3: List potential measures first, then evaluate to select the best.

It will be faster and easier if you list a dozen or so potential measures for each important business result that is worth measuring. So trawl through the KPI master lists quickly, just to pull out this first list of potential measures. After that, evaluate the potentials, and decide which measure (or two) will give the best evidence of your business results.

Tip 4: Be prepared to tailor the measures to your business.

The vast majority of KPI master lists will offer you nothing more than a measure name, and if you're lucky, a short sentence describing what it means. That's just not enough for you to successfully implement the measure in your business. So be prepared to flesh out each measure in more detail, right down to the data you'll use to compute it.

Tip 5: Don't fit a square peg to a round hole.

It's entirely likely that your business or organisation is unique is some way. And that means that the complete set of performance measures it needs won't be out there in someone else's KPI master list. You'll have some results for which you'll just have to design your own measures, from scratch. It will take you an hour or so to do this, but that's much better than wasting weeks, months or years measuring the wrong things, or not measuring the right things at all.

#78 Three Tips To Reach Your Priority Performance Targets

Don't think you're being a hero by having dozens of performance measures and targets, and driving hard to achieve them all. You might say "well all these measures are really important and I just have to achieve them all". You're fooling yourself, because all the evidence says that those who prioritise ruthlessly, achieve far more of their goals, and far bigger goals.

Tip 1: Make only a few measures the priority at any one time.

Usually you're measuring a goal or result because you're NOT currently achieving it to the level you really want or need. And that means that your business or organisation doesn't yet have the innate capability to do it well. When you can't yet do something well, trying to focus on dozens of things is like trying to learn to swim in a giant washing machine.

The more priorities you have, the fewer of them (if any) you will do justice. Each month or quarter, choose just your 3 to 5 highest performance priorities and give your attention to them first.

Tip 2: Display your priority measures everywhere.

You know what they say: out of sight, out of mind. Successful athletes, business people, celebrities - they all know that you have to keep reminding yourself what matters most. Every single day. At least once, every single day.

So carry your priority performance measure graphs and targets around with you, put them before anything else on management meeting agendas, hang them up on the office walls. One CEO I worked with hung laminated poster-sized graphs of his 3 most important performance measures right outside his office door, updated daily by his personal assistant.


Tip 3: Practice focusing on your priority measures.

While keeping your performance priorities in clear site all the time can actually make some real progress toward achieving them (a phenomenon of the reticular activating system [1] in your brain), if you want to truly achieve those results, you have to take deliberate action.

Practice every day focusing on your priority measures. Read your priority goals and visualise them being achieved. Plan each day to ensure you are dedicating at least one task to close in on priority targets. Ask colleagues and staff what they are doing to improve the priority measures' performance. Check and test if actions you and others are taking are having some real and objective impact.

Performance improvement - no matter how big - starts with you.
Changes - like business performance improvement - just won't happen without clarity of thought, focus, and the discipline to act. Which changes are currently most worthy of your daily discipline and effort?

[1] see http://www.make-your-goals-happen.com/reticular-activating-system.html

#77 Stop Measuring What You CAN Control

Yes, you did read that title correctly. No, it isn't a typing error. Yes, it does go against everything you've been told about performance measures.

But, if you truly want performance measures (or metrics, if that's what you call them) to really make a difference to your business or organisation, you have to STOP measuring what you can control!

You're going to get far more improvement, far more learning, much faster progress toward your goals if you start measuring the results outside your complete control, the results you only have some INFLUENCE over. Here are 3 reasons why.

Reason 1: What you can completely control is trivial.

What do you really have complete control over? To a great degree, you can control what you think about it. To a lesser degree, you can control what you do and how you do it.

About these things, no-one really cares. Changing these things makes little difference to results that are bigger than yourself. What you can completely control is inside the boundaries of your comfort zone and what you already know, so any change is only incremental and small.

The important stuff is important BECAUSE it's outside our circle of control.

Reason 2: Performance is more than just personal.

Improving what you have complete control over reduces down to improving your own skills and knowledge and competence. In business, performance is about much more than that. Everyone having more skill, more knowledge, and more competence does not guarantee business success.

Performance that matters is mostly about the business results (like profit, stakeholder value, customer loyalty) and the processes that produce these results for the business (like sales, customer support, recruitment). And no one person has complete control over any of these. It's a team effort.

Reason 3: You are creative enough to stretch beyond control.

If you never stand face to face with a result you are passionate about but feel you can't control it, and ask yourself the question "how can I make this possible?" then you are denying your innate creativity.

Why not at least ask this question of one important result outside your control? How can you make it possible? How have others made similar results possible? What ideas do others have for making it possible?

Another implication: reward people for influencing, not just for achieving.
One of the main reasons so many people feel compelled to measure what is in their control is the fear of personal loss if they don't achieve their measures' targets. So they choose easy measures that have very easily attainable targets. This is just jumping through performance hoops, and not about the true purpose of performance measures (to improve important performance results).

So what if you could start rewarding people for how much they try to influence results that aren't inside their control, even if they don't get all the way to the target?

#76 Five Steps To An Achievable New Year's Goal

The time of year when goals are most discussed is at the turn of the New Year. We get fired up and motivated to achieve new personal New Year's Resolutions for our health, our hobbies, our spirituality and our businesses.

However, the motivation can easily wane if we lose focus on our goals, if we feel overwhelmed by the effort it really takes to achieve them, or if we don't see immediate results on our first attempt.

So it's important to realise that these New Year's resolutions are just the same as any other goal we set. If we treat them like real goals, they'll more likely become real!

Step 1: Have no more than 3 really important New Year's goals.

Too many goals means too much scattering of your attention. If you've struggled to achieve all your goals in the past, then ask yourself: "Is it better to have a lot of goals and achieve none, or have a couple of goals and achieve one?"

Step 2: Make each goal super-specific.

No pie-in-the-sky wishes (Santa should have taken care of them already). Make your New Year's goals so detailed that you can create in your mind the exact experience of them already being achieved. "I want to be fit and healthy" is a pie-in-the-sky wish. "I will attain and keep my weight at 55kg" and "I will comfortably run 5km in under 25 minutes" are super-specific goals.

Oh, and write them down in this super-specific language, somewhere you can see and read them every day.

Step 3: Check there are no problems associated with having each goal.

It's called systemic thinking, when you ask yourself questions like "what if?" or "what else?", and these are important questions to ask about any goal you set for yourself. Will achieving the goal be all good, or are there some nasty side effects that could mean it's better to rethink the goal, or abort it altogether?

Step 4: Measure each goal!

Having a goal without measuring it is like watching a movie with your eyes closed. You will need regular and ongoing feedback about how fast you're dropping the pounds or what your average 5km run time is week on week.

And because there will always be ups and downs, measuring makes certain you stay objectively focused on the overall trend.

Step 5: Know what you're going to do differently to achieve your goals.

"Action! Nothing Happens Until Something Moves" is the title of a book by Robert Ringer, and they are wise words. You will not achieve your goals without making some distinct (and usually uncomfortable and challenging) changes in what you do each day. It's not fun saying no to a chocolate cupcake, but you must. And yes, especially if you don't feel like it, you have to put on your running shoes and start moving.

Each of these steps requires discipline. Are you prepared to give the discipline in return for achieving your goals? If not, perhaps you have the wrong goals. But if so, there's no time like right now to get started!

#75 Eleven Powerful Measurement Insights

The greatest management thought-leaders in the world insist that measuring the performance of your business or organisation is essential to its succeeding. There are no qualms about that. If you want to improve the performance of your business (or anything), you must measure performance.

Fewer and fewer managers are struggling with this premise, that you have to measure performance to manage it. But what they do struggle with is how to do measurement properly. These eleven insights will guide you to improve how you do go about measuring performance.

Insight 1: Only measure what you're going to do something about.
Don't measure just because you can, just because you always have, just because you've got the data, just because someone says to. Measure only the results you are going to give your time to improving, by "working on the business, not just in it".

Insight 2: Measure drivers, not just outcomes.

It's great to know how profitable your business is, or how well you've kept to budget, or how happy your customers are. It's at least as important to know also what operational results have the most influence over these outcomes. It's those drivers that you can do something about, to get the outcomes you want. You can't influence outcomes directly. So find the drivers, and measure them too.

Insight 3: Measure not what you can control, but what you can influence.

No-one really has control over anything other than their thoughts. We do have a lot of control over what we do, but even extraneous factors can limit that control too. If we only measured what we could control, we'd be measuring useless things. So expand your thinking to what you can influence, and you'll find yourself measuring much more meaningful results. Remember, your target doesn't have to be 100%.

Insight 4: Measures impervious to change are useless.

Why do call centres continue to measure the number of calls received? It's not a performance measure - it doesn't measure how well the call centre is performing. It just tells them how many calls they're getting. And even if they could change this number in some way, what kind of change would reflect an improvement anyway? Measure only the results you know you can (and should) change for the better.

Insight 5: It is essential that your measures conflict with one another.

Everything is about balance. Cycle time versus quality, profit versus customer retention, employee satisfaction versus productivity. These things are in conflict with one another, and that's how it should be. Management is about balancing the conflicts that are important, so if your measures aren't in conflict with one another, then you're missing essential information to manage.

Insight 6: Think like a marketer to engage people in measuring.

What do great marketers do? They capture people's attention, they get the right message across, and they influence people to act in a way consistent with that message. Traditionally, we think of marketers as selling products or services. But why can't we use the same process to sell performance measurement? Consider collaborating with your marketing department, or learning more about marketing yourself, to increase the engagement your colleagues have in performance measurement.

Insight 7: There is no "set it and forget it" with measuring performance.

There is no set of industry standard performance measures you can buy off the shelf, bolt onto your organisation or business, and then sigh in relief that you've "done performance measurement". Performance measures are a reflection of the things that matter most, and the things that matter most are a reflection of what's going on in your business and it's environment. And in case you haven't noticed, this is constantly changing!

Insight 8: Reward people for local results AND organisational results.

Reward people just for local results, and you'll be encouraging them to compete internally with other departments and teams and individuals, or cause unintended consequences for them. Reward people just for organisational results and you'll be frustrating them with the expectation to influence results they can't directly influence. Reward people for both local results and organisational results and collaboration across traditional organisational boundaries toward common goals is what you'll get.

Insight 9: Use data and not opinion to determine causality.

Sitting around the meeting room table to discuss an increase in error rates (or cycle time or costs or whatever), everyone's got an opinion about why. We're so quick to find solutions that we often forget to define the problem properly. A proper cause-effect analysis has to involve scoping potential causes and using data to determine which are the most influential causes.

Insight 10: Measuring performance is not a tool, it's a way of life.

If you've been interested in performance measurement for more than a few months, you've probably already discovered that it's not all about numbers and data. Mostly it's about culture, a culture of results-orientation, feedback, learning and continuous improvement. It's not enough to learn the tools and steps of performance measurement, you need to live the philosophy.

Insight 11: Performance measurement requires humility and transparency to work.

Ego, fear, arrogance, carelessness and sloppy thinking lead to performance measurement attempts that fail because bad results are swept under the rug, data is manipulated, only good results are measured, and any kind of objective evidence is ignored in favour of intuition and experience. Those who are humble will learn from the valuable feedback measures offer, and those who aren't afraid of transparent feedback will turn their performance measures into performance improvement.

#74 Five Time-Saving Tips To Manage Performance Data

If you knew in advance how much effort you'd have to put into collecting, collating and managing the data that provides the foundation for your performance measures, you may be put off entirely. Particularly for smaller businesses, departments or teams, you don't have big corporate business intelligence systems offering you the data you need at the press of a button.

No, you're often forced to collect and organise the data you need, all by yourself, and on top of your real job! But don't give up on measuring performance just for this reason. If you're still a firm believer that meaningful performance measures make your day job better, then these 5 tips for saving time in managing your performance data may just make the difference.

Tip 1: Collect data that is useful, not just interesting.

Market researchers are used to hearing their clients say things like "It would be interesting to also know [blah blah] - can we add a question about this to the survey too?" And good market researchers will say in response, "Not if it's just interesting. It has to be useful." They know the time and cost that gets wasted collecting data that doesn't serve the purpose of the research.

If you collect performance data that strays from the purpose of your performance measures, you'll collect much more than you need, much more than you'll use, and probably enough to paralyse your performance measurement process. Be ruthless: collect only the data you know is useful to calculate and analyse the performance measures that really matter.

Tip 2: Build the data collection into work processes.

Imagine you operate a health club and you're interested in measuring how committed your clients are to their gym programs. The time-wasting way to get the data for such a measure is to devise a survey and get your staff to call as many clients as possible to go through the questionnaire. And this is over and above their everyday work, too!

A time-sensible way is to see where the data might already exist or be easier to get through existing work processes. Personal trainers already fill out gym cards for their clients, to track the sessions their clients complete. Making sure that this data is collected consistently avoids the need for a separate data collection process.

Tip 3: Use a relational database to manage data (not spreadsheets!).

A freight business has their delivery turnaround times not in one spreadsheet, but in dozens of them: one for each month. And they do little better with other performance data such as revenue, delivery misdirections and service costs. They waste hours and hours every month manually organising the data in an attempt to produce trend graphs to report performance.

Even small businesses, departments and teams can recoup the time wasted in manually managing data with an investment in a simple database application, like Microsoft Access. All the data goes into well designed tables, via easy to use data entry forms. Not only is the data all in one place, it's fast and easy to get access to for both regular performance reporting and ad hoc queries to analyse the data more closely.

Tip 4: Don't freak out over imperfect data.

A management team in a government agency routinely spends well over half of their decision time debating the quality of the performance measures' data. What is the real cost to the organisation of losing time in delaying a decision until data is perfect, compared with taking a decision with imperfect data now?

Data will never be 100% accurate, and it doesn't have to be. Imperfect data can still give you rather reliable feedback about trends in performance. Take a quick check for any systemic data quality problems, to estimate their real impact on the decisions you are taking. After correcting any vital data quality problems, your time is better spent in cause analysis and performance improvement of your business results, not perfecting your business data.

Tip 5: Use samples to estimate, instead of populations to calculate.

To measure the accuracy of their stock management process, an inventory management team were visiting all store locations and counting all stock items held. This took them many months, and almost a full time team to chew through all the counting.

When they sought some advice from a statistician, they learned (with great relief) that they could get a very reliable estimate of their stock management accuracy through stocktaking a sample of stock items at a sample of store locations. In fact, with the smaller task, the counting process had fewer fatigue related errors, and the estimate was not only cheaper and faster, it was more reliable.

Spend your time where it matters most

Take a little time to think about what data you really need, how much integrity it honestly needs to have to be useful, the easiest and fastest way to collect it, and an accessible way to store it. It will be time well spent, which will create more time down the road for the real work of performance measurement: improving your business performance.

#73 Why Balanced Scorecard IS NOT A Measurement Tool

If you haven't yet heard of the Balanced Scorecard, it's a world-renowned model developed by Robert Kaplan and David Norton in the mid 1990's to encourage corporations to realise that relying on just the financial metrics is relying on too little, too late. They wrote the landmark book, "The Balanced Scorecard: Translating Strategy Into Action" to demonstrate how to measure corporate performance in a more balanced way, that aligns everyone in the corporation to its strategic direction.

But does it?

The Balanced Scorecard has well-known implementation problems.

There has been much criticism of the Balanced Scorecard by organisations that have attempted to implement it. They hoped to quickly manifest a meaningful suite of performance measures that has everyone focusing on what matters most in fulfilling the mission, vision and goals. But didn't.

Implementers of the Balanced Scorecard find they end up with too many measures in the tangible parts of their scorecard, not enough measures in less tangible parts of their scorecard, and altogether not measuring meaningful results. Why does this happen?

The Balanced Scorecard doesn't put enough emphasis on results versus strategies.

The primary building blocks of the Balanced Scorecard are 1) it's four perspectives of financial, customer, internal business process, and learning and growth; 2) the strategies that populate and link through each perspective; and 3) the measures that link to each strategy.

Most people express their strategies as vague, jargon rich actions, and struggle to tease out the specific and tangible results implied by these strategies. So they measure what is easy to measure: progress against planned activity, the reaching of milestones and whatever else they have data for. The measures focus on activities like "develop target markets" and "upgrade staff competencies", not outcomes.

The Balanced Scorecard doesn't offer the steps to measure design.

Bordering on prescriptive, the Balanced Scorecard literature offers ideas for measures to use, for specific strategies typical of each of the four perspectives. Functionality. Brand Image. Relationship.

But these terms mean such different things to different organisations and people, so to measure them meaningfully takes more thought than brainstorming or copying from a book. It takes a thinking process that extends from an intimate understanding of the result that needs measuring, and this often requires climbing out of mental ruts like "this isn't measurable" and "we don't have the data".

The Balanced Scorecard doesn't show the process of measure implementation.

Populating a balanced scorecard with measures assumes that the populating process is obvious and straightforward. Select some measures, then give the IT department the brief to report them. "Add customer retention to the scorecard, thanks!" is just too brief.

You can't ignore the many details that can (and do) make the difference between measuring what's easiest versus measuring what was meant to be measured. There are many subtleties to measuring something like customer retention, which need to be drawn out into a full definition, from which the measure can successfully be brought to life.

So is the Balanced Scorecard all bad?

No, the Balanced Scorecard is not all bad - it will go down in history as the serious beginning of non-financial performance measurement in the corporate world. And its heart is really the roadmap for linking what happens from day to day in a corporation to its strategic, longer term direction, through deliberate conversation about strategy design. But it's not about performance measure design and implementation.

It's just not specific enough to stand alone as a performance measurement tool.

To select truly meaningful measures for your scorecard - beyond the traditional profit, customer satisfaction and employee turnover - you need to learn a way of thinking about measurement that Kaplan and Norton didn't address. To make your scorecard a success, couple the strategic design and translation power of the Balanced Scorecard, with a deliberate performance measurement process like PuMP.

#72 Four Performance Improvement Set-Backs To Avoid

You know the ultimate reason why we measure performance - why we have metrics and KPIs - is to improve performance, don't you? But has just the thought of the time, money and effort you'll need to improve performance, over and above your day job, almost got you running for the hills?

This is why pilot testing is such an invaluable practice to adopt, each time you discover a performance result that you believe is important enough to improve. Pilot testing is a small scale implementation of an improvement initiative, to learn how to make the full scale improvement get the best return on the time and money and effort you invest.

The power of pilot testing lies in minimising the effect of "Gumption Traps", what Robert Pirsig, author of Zen and the Art of Motorcycle Maintenance calls the set-backs that throw us off our focus on Quality, on producing meaningful results.

So here are some tips for how pilot testing can help you prevent the set-backs of performance improvement:

Set-back 1: the wrong hypothesis about what really improves performance

If you have picked just one improvement idea, you've put all your eggs in one basket. You run the very high risk of that idea not in fact being the best idea to improve performance.

Instead, consider a range of ideas and test them as alternatives on a small scale. Then, after you pilot test them, look objectively at the impact each idea actually had on your results. You can then more confidently choose the best idea to implement on a full scale.

Set-back 2: not enough support to agree to a performance improvement

A decision maker is going to support improvement initiatives that are much more than just good ideas. Before she's going to allow resources to be taken away from something else and given to your performance improvement idea, she'll want to know it's going to work.

Rather than expecting decision makers to agree to an improvement idea because you think they should, demonstrate the impact of the idea with the results of a successful pilot test. Don't forget, a measure of return on investment (ROI) is a convincing way to measure success.

Set-back 3: loss of momentum when improvement takes too long

Some performance initiatives can take months or years to implement, and almost always the time people have to give to improvement is over and above their full time job. It's no wonder the momentum can wane.

Using the pilot test approach of keeping the timeframe and the scope small, you can make performance improvement initiatives happen as fast and focused as possible. When people see results happening quickly, their energy and motivation grows and adds to the momentum for continued improvement.

Set-back 4: when implementation goes awry

Any change you make to a process is going to be fraught with implementation bugs: incompatible systems, people misunderstanding, a step taking too long, hidden costs, and so on.

Pilot testing is tremendous for finding and ironing out implementation bugs in a controlled environment - where cleaning up the mess they create is no big deal. When you find the bugs, and decide how to fix them, then you can unleash your improvement initiative to its full scale.

#71 Are Your Graphs Wasting Everyone's Time?

Software these days can do heaps of exciting and creative things with your data, including summarising it, graphing it and making it flash and ding to get your attention.

Because all this can happen at the touch of a button, it's often hard to remember that software can't reason and therefore can't decide what is a meaningful and useful thing to do with your data.

These principles of useful graphs will guide you so you can decide what is a meaningful and useful thing to do with your data.

Principle 1: answer your question

When you choose a graph to convey information for a specific purpose, be clear about what the purpose is and choose measures that are relevant to that purpose. For example, make sure your graph title explains the measure presented, and make sure the measure presented really is the relevant measure for your decision.

Principle 2: highlight comparisons

Graphs are a visual representation of objective comparisons. When you graph measures, it is important to use techniques that help the user make comparisons in the information you are graphing. For example, use line charts for time series measures, use bar charts to compare departments or segments or other categories with one another, avoid pie charts altogether.

Principle 3: optimise simplicity

Keep graphs simple and easy to interpret by avoiding superfluous symbols, laborious legends, dispensable decorations and volumes of information that take the audiences' attention away from comparisons. For example, remove gridlines, don't bother with data labels and forget the artwork (like little dump trucks instead of data points).

Principle 4: maintain integrity

Help the data tell its story. If this story is unclear, then say so (as opposed to putting the data through contortions and manipulations for the sake of having an answer to your question). For example, be careful how you scale the axes, don't use 3-dimensional effects and don't assume every trend is a nice straight sloping line.

Principle 5: be visual

Pattern, colour and space are the fundamental characteristics of graphs. These characteristics are processed and given meaning through a visual process, so use them in ways that human eyes (and often photocopiers) best respond to. For example, avoid patterns that don't start to move the more you stare at them, use colour to highlight signals in the data and size your graph only just large enough to convey its message.

Tips to transform your graphs, easily and quickly

How easy is it to transform your graphs? Very easy! You just need to know the practical tips that show you how to change parts of your graph's anatomy to make your graph more relevant, informative, simple, trustworthy and easy to interpret for decision making!

#70 How Many Measures Do You Need?

If you're starved of any decent performance measures at all, or you're drowning in the overwhelm of too many, then you're also likely not making any decent progress on improving your business performance, or achieving your goals.

As mere mortals, we seem to get the best results when we can focus on just a small number of priorities. Remember this as you make that important decision about exactly how many - and which - performance measures will focus you to achieve your priorities, as properly and promptly as possible.

TIP #1: Prioritise your goals, and just measure the priorities.

Each quarter, I review my business goals and Results Map to set the 1 to 3 most important themes to focus on for the coming few months. I don't monitor everything in my business plan all the time. The data is being collected for these measures, yes, but I'm not reviewing those measures. Not until and unless they become a priority.

So it can help to think of your entire business plan as a rolling evolution. Your focus is always just on the most important goals, and as those goals are achieved, your focus moves to the next most important.

TIP #2: Expect that for each goal, you may need 1 to 3 measures.

Rarely does a single performance measure give you a complete enough picture of a goal or result you're chasing. For example, I use two measures to monitor a goal I have, that my customers spread the word about the value of my services: Net Promoter Score and Number of Customers Referred by existing customers. It means I can measure my customers intentions to refer and how this manifests into reality.

So make allowance for this when you prioritise which goals are the priorities to measure: each goal could have a few measures attached to it.

TIP #3: For any one person, 3 to 5 measures is enough.

Reaching performance targets, as with any form of change, takes effort over and above the doing of our everyday tasks. It takes thought, learning, analysis and experimentation, and time. If you try to improve everything that matters all at once, the effort is exponentially greater.

So at any one time, having just 3 to 5 measures with targets on your radar is enough. Get some real improvement in even one area, and you're streets ahead of making insignificant improvements in many areas.

TIP #4: Be disciplined to focus on the priority measures first.

Especially if you are reporting more than just the priority measures, the priority measures should be at the top of your performance review agenda, if not the entire agenda.

For example, my weekly reviews focus just on the priority measures for a single performance theme until I've achieved my targeted improvement. The theme comes from my quarterly review of priorities, such as growing the number of subscribers, growing revenue from a new product, or improving my customers' service experience.

TIP #5: Use monthly and quarterly reviews to check for new priorities.

With a strong focus on a few measures, you can make some great progress quite quickly. And as this happens, those few measures can become a lower priority relative to others. So a regular review of your complete business plan or set of goals is useful to choose new priorities.

But remember to let go of old priorities, take them off your radar. Your monthly review will pick up if they ever need your attention again.

A tool to prioritise your measures

The first step of measuring the right things is to define the results that are worthy of being measured. We use the technique called Results Mapping to do this with our clients. And I use it personally too, for my own business goals and measures.

Results Mapping lays out all the results that are implied by your business plan or goals (what's important to your business or organisation) and the cause-effect relationships among them. Each result can have 1 to 3 measures to monitor it.

It's all on a page, and this makes it easier to choose and visually highlight which results are the priorities right now. And it's these priority results we measure and monitor, until improvement targets are achieved. After that, the priorities are reassessed, and the highlighting changed accordingly.

Here's how to get the Results Mapping tool for yourself, go to: http://www.staceybarr.com/pumpshop/howtokitP1001.htm

#69 What Does 'KPI' Really Mean?

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.

#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.