BULLET # 43
MEASUREMENT: KEEPING SCORE
Performance measurement is as dear to our hearts as a stethoscope to a doctor. Our thoughts on the topic go beyond the MIS and EIS systems and applications to an entire framework of game theory for the business organization. The tools and techniques of performance measurement are simply the score cards. The game is to win. Here is a compilation of our observations, learned on the front line of management.
1. A large part of the first two decades of our lives was spent earning grades. Report cards were the yardstick by which we measured our success in school. This is the university model. Why should business be any different?
2. The quickest route to mediocrity is to adopt a pass/fail grading system. Excellence requires the challenge and competition to get the A+.
3. Measuring success creates the opportunity for excellence.
4. Everyone wants to know where the goal posts are. Can you imagine football without them? Is business less competitive?
5. Business performance measurement is as necessary as the score card of sports or the vital signs of medicine.
6. What's rewarded gets done; what's measured gets done; what's noticed gets done. Pay attention!
7. If what gets noticed gets done, what gets measured gets noticed.
8. Without measures, progress is meaningless.
9. People can only retain up to seven random pieces of information. Increase the meaning of the numbers or reduce the measures.
10. There is no such thing as not needing to measure performance. It may be the wrong measure rather than the right measure, but never no measure.
11. The act of keeping track of something in itself increases productivity. Ever notice in a tennis warm-up what happens when the players start keeping score?
12. Focus on the vital signs. Look under the covers only if one or more of these go south. Most of the data should be kept down in the drill-down pyramid.
13. The nearer the scores are to the activity, the bigger the impact. What good is a report that comes out three weeks after the close of the month? The game is already over.
14. An excellent measurement reporting system identifies brewing problems before they are failures. It also sniffs out the budding successes.
15. It is as important to figure out which data to ignore as it is to identify what's critical. Ask any doctor.
16. Knowing whether the score is a win or not is not sufficient. Discerning the momentum, or the trend, is needed.
17. Measure results versus objectives; make the trends clear. A simple graph tells the score and the trend in a snapshot.
18. Two goal lines are important to identify: the minimum acceptable level of performance, and the outstanding level. A performance objective usually falls between these goal posts.
19. Before you can set the objective target, you need a base line. Collect the current performance data first.
20. Ask often if a performance measure has ceased being be a key variable. If it's no longer vital, shoot it.
21. Measurement for the sake of measurement grows the status report rather than the business. Be clear about what the yard markers are. Save a tree.
22. Boil statistics down to one page summaries wherever possible. Better yet, use a graph.
23. Every measure needs an owner. Be clear about who has the responsibility for scoring the points.
24. The best score cards are the ones you can keep yourselves. But the measures that have greatest impact, are the ones that get published.
25. Think Translux ticker tapes, United Way thermometers, Diamond Vision score boards. Make it visible to make it meaningful.
26. The easy things to measure are the counts and amounts. Deadlines and duration are two additional types. The survey is a handy measure for the softer items.
27. How will you compete: by quality of product, quality of service, speed of execution, reliability, low production cost? What will distinguish you in your marketplace? Measuring these things should be the priority.
28. The line from strategy to measurement to adjustment (or celebration) is not serial. The results of measurement will inform strategy, identifying new questions and changes in priority. It's a feedback loop. Use measures to inform strategy and revise actions.
29. Don't wait on the ideal measurement system or technology. Start gathering the data now. There is nothing inherently less accurate in the paper and pencil report. It certainly is easier to revise, and less costly. Automate the tested and accepted.
30. The points on the board are more productive and motivating than the penalties on the field. Focus on the positive numbers that build a sense of winning the game.
31. Celebrate the wins.
© Copyright 1996, 2019, HP Management Decisions Ltd., All Rights Reserved.