Measure Up

#39 Have You Got What It Takes To Be A Performance Measurement Leader?

2010-02-01T12:55:00.000-08:00

There are no professional guidelines (yet) which define what it means to be a Performance Measurement Practitioner - not like there are for Accountants, Project Managers, Finance Officers and Engineers. So there's little wonder that there are so many talented and capable performance measurement practitioners out there who are underselling themselves.

Are you one of them? Find out with this quiz:

Q1: How much of your time do you spend - or should you spend - on performance measurement activities?

Performance Measurement Practitioners routinely spend at least 40% of their work time devoted to a broad range of performance measurement activities, including the selection of measures aligned to strategy, collection and collation of performance data, analysis and reporting of performance, interpreting and using performance measures to improve performance.
If you spend a good deal of your time on at least half of the following activities, then you very likely should be calling yourself a Performance Measurement Practitioner:

data collation
performance report production
designing or developing performance dashboards/scorecards
performance data analysis
helping people choose KPIs/measures
linking KPIs/measures to strategy
explaining or teaching performance measurement concepts to colleagues
using performance measures to guide performance improvement projects/activities

Q2: Have you had some exposure to structured performance measurement methodologies?

Performance Measurement Practitioners will have at least a rudimentary working knowledge of one or more formally structured and tested performance measurement approaches, such as the Balanced Scorecard, the Six Sigma Scorecard, the Performance Prism, PuMP® or the Performance Measure Blueprint^(TM).
This means that you:

have read the book or done the course to learn the approach
have lead, been involved or witnessed close-hand the implementation of the approach
can successfully describe how this approach works to a colleague

Q3: Can you design and implement simple business projects?

Performance Measurement Practitioners need to have reasonable project management skills and experience, because managing a performance measurement implementation, and a corporate performance management system, needs planning of tasks, milestones and resources.
You'll have gotten this skill if you have:

been a project manager
worked in a small project team on a project that was well-managed
taken a project management course
lead a group of people through the steps to define, analyse, design, implement and successfully achieve a solution to a problem

Q4: Are you confident with your presentation and facilitation skills?

Performance Measurement Practitioners need to feel confident with presenting to groups, and also managing group interactions and dynamics in workshop settings, because they run a lot of meetings with teams to plan and implement various aspects of the performance measurement system.
There are several ways you'll know you have these skills too:

taken a presentation skills course
learned how to engage an audience through the failures and successes of your personal experience
role-modeled a manager or other colleague with great presentation/facilitation skills
get regular feedback from people in your "audiences" on your great presentation style

Q5: Can you speak about performance measurement in a way that engages your colleagues?

Performance Measurement Practitioners work with internal client teams to design and implement the organisation's performance measurement system - they don't do it on their own! So they must be able to engage their colleagues to commit to implementing the performance measurement process with them.
You get a 'yes' to this quiz question if you have:

offered advice on performance measurement that your colleagues acted on
opened people's minds to what good measurement means, and why it matters, through your conversations with them
offered to facilitate meetings with people to help them with measures, and they accepted
given feedback to colleagues on their measures, which was openly received and considered
often been sought out for advice or tips or resources to do with performance measurement

Q6: Do you feel passionate about performance measurement?

Performance Measurement Practitioners have a passion for performance measurement and the profound transformation it can effect for an organisation. They also have a passion for learning and refining their capability, as a significant component of their career path.
You know you have the passion when you:

collect books, articles, newsletters and websites on performance measurement for your personal library (and read them!)
find yourself automatically asking people when they talk about goals, "And how will you measure your success with that?"
feel a surge of motivation and inspiration when you are reminded of how organisations have been transformed by measuring the right stuff
develop your own little systems to help you with measuring performance, like your own KPI library, templates and ready-to-go PowerPoints

Just like any quiz, the value is not in right or wrong answers. The value comes from considering the questions and seeing what comes up for you. So, how do you feel NOW about having what it takes to be a performance leader, or Performance Measurement Practitioner?

TAKING ACTION:
What value would being a Performance Measurement Practitioner have for your career? Start with describing yourself in your ideal role 3 to 5 years from now, and then describe how you got there. You'll be surprised how powerful it is to plan from the end-point looking backward, compared with the traditional approach of planning from the start-point looking forward! (And you may want to take another look at the PuMP Certification Program for 2010 - perhaps you ARE ready!)

#38 Do You Really Need A Corporate Performance Office?

2010-01-18T02:33:00.000-08:00

They're popping up like mushrooms after ground-soaking rains: the Corporate Performance Office, a small team of people devoted to developing, coordinating, and facilitating their organisation's performance measurement and management system, from top to bottom, left to right, and back to front. But do YOU really need one too?

Let's take a look as some of the most compelling "pros" to have a Corporate Performance Office, and trade them off against some of the more deterring "cons" not to.

PRO: Credibility. A CEO endorsed venture like a Corporate Performance Office puts meaningful performance measurement on everyone's radar. Coupled with a team that has respected qualifications and experience in performance measurement, and an official and clearly articulated role in coordinating and facilitating performance measurement organisation-wide, this gives performance measurement lots of healthy credibility.

PRO: Organisation. A single place to go looking for useful templates, time-saving tools, up to date information on strategic goals and current measures, the latest performance data - imagine that! A good Corporate Performance Office will be the single port of call for all things measurement, conserving the blood, sweat and tears of managers and employees to pour into operational priorities instead.

PRO: Efficiency. When the performance measurement system has a central hub like a Corporate Performance Office, the potential for erradicating duplication of effort in measure design, data collection, analysis and reporting is grand. Who's going to complain about having to spend less time copying and pasting data from one spreadsheet into another, and reformatting the monthly report every month? Their time is better spent improving performance, not reporting it.

PRO: Consistency. When the Corporate Performance Office facilitates a consistent process for designing, implementing and using performance measures right across the organisation, it makes it heaps easier for everyone to link to strategy, collaborate across functional and departmental boundaries, and no one is left behind to struggle with outdated measurement methods.

PRO: Cost Decrease. The hidden costs of mountains of data management, maintaining myriad dashboard systems, and manual performance reporting aren't to hard to expose, and when you do expose them, you can see how potent a Corporate Performance Office - focused on organisation, efficiency and consistency - would be in stripping back these costs.

CON: Cost Increase. Employing people in performance measurement roles full time has a cost. But this cost needs to be seen in the context of the hidden costs that are already there, like duplication of reporting, rework and wasted time in finding meaningful measures, missed opportunities to improve performance due to measures not being linked to strategy and operational priorities.

CON: Threat. Some people won't like having the joys and freedom of ad hoc performance measurement taken away from them. They won't buy in to new methods of measuring and managing performance, even if they work better. If that's the attitude, then maybe you really do need a Corporate Performance Office to change the performance culture!

CON: Finding People. It's true that the field of performance measurement hasn't been professionalised yet, and that makes it hard to find people with convincing skills in performance measurement and management. This can be a setback for creating a Corporate Performance Office, but there are programs out there for acquiring these skills, and many people whose experience means they're at least part way there already.

TAKING ACTION:

Grab some coloured pens, unlined paper, and a coffee (or beverage of choice) and fantasise for a while: How would YOU design your Corporate Performance Office if you got the green light and a clean slate?

#37 The Third of Three Things I Don't Like About The Balanced Scorecard

2010-01-07T15:29:00.000-08:00

In the first part of this three part series, I posed the first challenge that I face with the Balanced Scorecard: it is hard to cascade meaningfully. And in part two was the second challenge: the Balanced Scorecard perspectives are too limiting.

The third thing I don't like about it is this:

CHALLENGE 3: The Balanced Scorecard is not a performance measurement methodology.

How dare I utter such a blasphemous suggestion!

But I truly beleive it. The Balanced Scorecard is, in my book, far more a strategy design methodology than a performance measurement methodology. And here's why: A performance measurement methodology has to go much further than just suggesting how to determine a balanced and cause-effect linked strategy.

A performance measurement methodology has to help you design and implement and use performance measures, too:

It has to help you find meaningful measures, particularly when the strategies seem at first to be immeasurable. There are many Balanced Scorecards that are filled with lame, vague measures when they don't have to be.
It has to help you nut out the details of your measures, so they can be implemented as intended. Too many of our performance measures are poor substitutes for what we originally intended them to be, because not enough thought went into the appropriate calculation and data requirements.
It has to help you analyse and report your measures so they clearly and engagingly tell the story of actual performance.
It has to help you engage people to measure performance willingly and honestly, and as easily as possible so the measures have the best chance of truthfully telling the story of performance.
It has to help you validly interpret the quantitative information that the performance measures are providing, so decisions are based on patterns and trends instead of knee-jerk reactions to individual points of data.

The Balanced Scorecard does nothing to help you with these challenges. It isn't a performance measurement methodology - it's a strategy design methodology.

But before you think I'm on a one-woman mission to bag the bejesus out of the Balanced Scorecard, let me say this: I don't advocate you don't use it, I just want you to be aware of its limitations despite its popularity, and make sure you take from its strengths and compensate for its weaknesses.

TAKING ACTION: 
Do you have a  step-by-step performance measurement process to populate your Balanced Scorecard  with meaningful measures, and then implement and use those measures to execute  and achieve the strategy implied by your Balanced Scorecard?

#36 The Second of Three Things I Don't Like About The Balanced Scorecard

2009-12-15T19:23:00.000-08:00

In the first part of this three part series, I posed the first challenge that I face with the Balanced Scorecard: it is hard to cascade meaningfully.

The second thing I don't like about it is this:

CHALLENGE 2: The Balanced Scorecard perspectives are too limiting.

The four perspectives that comprise the Balanced Scorecard are Financial, Customer, Internal Business Processes, and Learning and Growth. And these four perspectives work in a cause-effect flow, from Learning and Growth up through to the Financial perspective.

The idea is that you design your strategy across these perspectives, and you choose measures (KPIs) aligned to this strategy, and hence you have your Balanced Scorecard.

Do Four Perspectives Developed Over 15 Years Ago Still Apply?

In an age where social responsibility, environmental responsibility and systems thinking are driving much of our thinking about what matters in managing organisational success, I struggle to accept that all that matters in a strategy can fit into the Balanced Scorecard's four perspectives.

And indeed, in the numerous situations where I've seen the Balanced Scorecard used, that's exactly the way people behave: they try and fit their strategy into it. Alternatively, they create their own perspectives, often around Critical Success Factors that emerged from their business scanning and SWOT analysis.

Alternative Ways To Design A Corporate Strategy.

One model I really like is designing perspectives around key stakeholders (like customers, shareholders/owners, strategic partners, employees, and the community) and their definitions of the value the organisation or company provides them. It's a great model if social responsibility is important to, at least as much as profit is.

The Performance Prism is one such stakeholder model.

Another model that's quite common is TBL or Triple Bottom Line, which moves away from profit as sole definition of organisational or company success and brings in a new idea of balance with the People and Planet bottom lines companioning the Profit bottom line.

Perhaps if you apply some systems thinking, examine your internal and external business environments, and take your SWOT analysis seriously, you will see what really matters for your organisation's or company's success. And if you then explore how each business process and function impacts those strategic results, you'll more naturally cascade the strategy.

One More Challenge...

In part three of this series, I'll discuss the final thing I don't like about the Balanced Scorecard, and again will suggest some tips for compensating for this challenge.

TAKING ACTION:

In using the Balanced Scorecard, what important results are you ignoring because they don't fit? What results are you focusing on and measuring, because you think you should have something in each of the four perspectives of the Balanced Scorecard? Let's continue the discussion, at the Measure Up blog!

#35 The First of Three Things I Don't Like About The Balanced Scorecard

2009-11-30T02:48:00.000-08:00

We have to applaud the Balanced Scorecard for the evolution it triggered in organisational performance measurement and strategy execution. But no model is without its limitations.

Certainly, on account of the Balanced Scorecard, we're now seeing the measurement of non-financial results rather than just the financial, and we're seeing strategies laid out in logical and cause-effect linked plans designed for execution rather than shelving.

But a few challenges continue to baffle those that embrace the Balanced Scorecard way. One of the challenges is easy and quick to remedy within the current Balanced Scorecard theory. But the other two, I believe, require a more radical re-think.

In this first part of a three part series, we'll look at one of those challenges that does indeed need a more radical re-think.

CHALLENGE 1: The Balanced Scorecard is hard to cascade meaningfully.

You might argue with me on this point, because part of the Balanced Scorecard's claim to fame is it's focus on strategy execution and cascading strategy to operational levels. But those famous four perspectives that were the revelation of this framework are also the limitation on meaningfully cascading strategy.

What Happens Is "Mini-me" Syndrome.

I call it the "Mini-me" syndrome (inspired by the Austin Powers movies), where what ends up being cascaded are localised scaled-down copies of the corporate scorecard. Each department or team has the same perspectives as the corporate scorecard, almost the same strategy map, but tailored to the scope of their work.

If injury reduction is in the corporate scorecard, then every department and team has injury reduction in their scorecard: even those departments where injury risk is infinitesimal. If cost reduction is in the corporate scorecard, then every department or team has cost reduction in their scorecard: even those departments (like Human Resources or Process Improvement, whose costs must increase in order for other areas' costs to decrease.

That's not true cause-effect thinking, and it leaves many managers and employees bemused and cynical about having to measure things that don't really matter to them, and that don't really focus on their specific and unique contribution to the corporate direction.

Additive Thinking Is Not Cause-Effect Thinking.

When the focus is on maintaining the four perspectives in everyone's scorecard to link up to the corporate scorecard, the attention has moved away from where it needs to be: focusing on the performance results and process improvements that have the highest leverage to achieve the corporate strategy.

What happens instead is a collection of additive scorecards, where you can add up or combine the metrics from scorecards across the departmental tier, and end up with the values for the corporate scorecard. Likewise, you could add up the add up or combine the metrics from scorecards across teams within a department, and end up with the values for the departmental scorecard. This isn't cause-effect thinking. It's additive thinking.

Cascade True Cause-Effect, Not The Scorecard.

To apply true cause-effect thinking, we have to let go of structure. We have to openly explore and analyse how the performance of a part truly does impact on the performance of the whole. The four perspectives of the Balanced Scorecard don't encourage that open exploration and analysis, and that's why we have the Mini-me problem.

I haven't found a sensible and easy way to help departments and teams cascade the Balanced Scorecard in a way that's sensible for them and truly aligned to the corporate direction. Instead, we use a more open approach called Results Mapping, which encourages them to start with a conversation about the corporate direction (or scorecard) and explore the question "How and where do our results and our processes most impact on the corporate direction?"
Two More Challenges...
In parts two and three of this series, I'll discuss two more things I don't like about the Balanced Scorecard, and suggest some tips for compensating for these challenges also.

TAKING ACTION: 
Where are you trying to  cascade the Balanced Scorecard? Is it making sense to the teams it is cascading  to? Is there anything in their scorecard that isn't really that important, or  anything missing that actually is important? What questions are you asking to  guide the way that strategy is cascaded in your organisation or company?

#34 The 8 Steps to Build Buy-in to KPIs

2009-11-16T12:05:00.000-08:00

You're not truly implementing performance measurement - nor getting the gains it will deliver - if you don't have your staff, your colleagues and your managers engaged. Nor do you have to wait until they are engaged before you get started!

Adapting John Kotter's process for leading change, which he details in his book "Leading Change", here are 8 steps you can follow, as the performance leader that you are, to engage people in measuring performance:

STEP 1: Find an Urgent Performance Problem

Usually people won't give their time to measuring performance because it's never seen as urgent enough, even if they do think it's important. So create a burning platform: find, point out and fan the flames of a performance problem that needs fixing, like NOW!

STEP 2: Create a Powerful Measures Team

Don't try and lead it alone. You need a support team of influencers in your company organisation to give the performance measurement initiative credibility and fuel.

STEP 3: Describe Your Vision of Performance Measurement Success

People don't care about measures, they care about results. So what are the results you want to get by measuring? How will yours and their world be different if you succeed?

STEP 4: Sell the Vision of Success

You cannot succeed as a performance measurement practitioner unless you have marketing skills. It's one of the most challenging topics to excite people about, and marketing is the means to reframe it to something more enticing than just numbers and graphs.

STEP 5: Expect Resistance, and Be Persistent

You won't get everyone engaged, and there will be people and circumstances that try to slow your progress. Tenacity and persistence (with a smile) is what you'll need along the way. Don't give up!

STEP 6: Start Small & Punchy

Don't aim for a complete corporate performance measurement system if the vast majority of people don't feel engaged in measuring. You'll move faster if you start smaller, on individual performance problems or goals. Momentum will build exponentially as you make progress.

STEP 7: Sell the Performance Wins

Marketing again: and this time it's to make sure you keep showing people the benefits of performance measurement. Talk about the real (measurable!) improvements that have been made by measuring and focusing on what matters. Create hunger for more.

STEP 8: Make Measuring Performance Business-As-Usual

Measurement is actually everybody's job, so make it easier for that to happen. When engagement levels pick up, start making training and templates and other time-saving resources available to support people to measure and improve performance for themselves.

TAKING ACTION: 
Look our for a new course  coming up soon, where we'll go deep into these steps so you can develop and  implement your very practical and very realistic performance measurement  engagement plan. Post a COMMENT on this article, to share  your experiences with building buy-in.

#33 Three Types of Performance Measure Relationships

2009-11-03T05:38:00.000-08:00

If you think about when organisations work well, it's because all the parts are coordinated together and managed as an integrated whole. And that's a very good reason why we ought to treat our performance measures the same.

By understanding how measures are related to one another, you increase their power to help you understand and diagnose performance, and thus how you can report those measures together to make performance understanding and diagnosis easier.

RELATIONSHIP TYPE 1: Cause-Effect

As the most commonly talked about relationship between measures or KPIs, the cause-effect relationship isn't too hard to understand. It simply means that when one measure improves or deteriorates in performance, it causes another measure to improve or deteriorate in performance as a consequence.

For example, reducing rework can cause costs to reduce; improving recruitment of talent can cause workforce capability to improve; if employee engagement slides then it can cause customer satisfaction to slide too.

RELATIONSHIP TYPE 2: Companion

Measures have a companion relationship when they each tell a part of a complete story of performance. If you relied on just one of the measures, you wouldn't have a full enough picture to take the best action.

For example, number of new prosects and prospect conversion rate are companions to track a marketing process; customer lifetime value and number of active customers are companions to understand drivers of profit.

RELATIONSHIP TYPE 3: Conflict

Because you can't have your cake and eat it too, you often can't maximise the performance of any one measure. Other measures of performance can pay the price, and that's where you get conflict relationships between measures.

For example, improving workplace safety can conflict with on-time delivery to customers; reducing call handling time (in a call centre) can conflict with first call resolution; improving product quality can conflict with cost reduction.

TAKING ACTION:
Look at one of your organisation's performance reports, and the suite of measures or KPIs it includes. How are these measures related to one another? Does this appreciation of the relationships suggest any opportunities to improve the way your report the measures, so they are more useful?

#32 What's So Special About Lead Indicators?

2009-10-18T19:30:00.000-07:00

Most performance measures or KPIs tell you what happened. But if we're really going to manager company or organisational performance, we need to know something about what's going to happen.
And that's what lead indicators do. They are a special breed of performance measure or KPI because they have predictive power.

They always have a relationship to a lag indicator, which is your typical performance measure or KPI that tells you what has happened already. Lag indicators track performance outcomes or end results that your business or organisational goals are based on.

When a lead indicator starts to improve, your lag indicator will likely improve too. And if your lead indicator starts to show poor performance, you can expect your lag indicator will follow suit.

Now this relationship is not quite the same as any other cause-effect relationship. There's usually a time lag, so when your lead indicator behaves differently, the lag indicator won't start changing until some time in the future. And that's where the power of the lead indicator lies!

You can use your lead indicators to give you advance warning of likely future performance, so you can do something about it before your lag indicators - your performance outcomes or end results - are affected.
So an increase in building permits now could be a lead indicator of a boost in the economy in the future. Or an increase in the number of other websites linking to your website now could be a lead indicator of increased traffic to your site in the future. Or higher than average rainfall could be a lead indicator of bigger sugar harvests and thus demand on sugar mill processing rate in the future.

The stronger the correlation - or quantitative relationship - between a lead indicator and lag indicator, the better the predictive power of the lead indicator. So a great way to find good lead indicators for the lag measures of your performance outcomes is to first consider some potential lead indicators, and then to gather some historic data to measure the correlation.

Finding really fabulous lead indicators takes time and practice, so the sooner you get started, the sooner you'll have more control over performance!

TAKING ACTION: 
Choose one of your  company's or organisation's KPIs, and spend some time discussing and thinking  about potential lead indicators, that could have some useful predictive power  for that KPI. Gather some historic data and check the correlation of each  potential lead indicator, and if you find a good one, start tracking it!

#31 Milestones Do Not Make Meaningful Performance Measures

2009-10-05T02:18:00.000-07:00

"Complete business process review by June 2010" and "Implement customer relationship management system by December 2009" and "New workplace safety policy in place" are NOT performance measures, despite how often they appear as such in business and strategic plans and despite what many performance measure practitioners and experts might say.

They're not performance measures because they fail a few essential tests of what makes a meaningful performance measure.

1. Milestones are about action, but measures are about results.

Meaningful performance measures track business results, because achievement of business results is what defines performance. Completing a task or activity, such as reaching a milestone, doesn't define performance. Just think of all the examples in your own business or organisation where projects or initiatives or actions have actually worsened performance! That's why milestones aren't meaningful measures.

2. Milestones are hypotheses, not proof.

A milestone is a point in time when a particular project has reached an important stage that indicates it's progressing as planned. Projects, and their milestones, are our best guesses (hopefully informed guesses) about what's going to improve business performance. Not all projects succeed in this quest, and that's because we don't know what's going to work until we try it out and learn from it. Milestones need measures to test if they're working or not. That's why milestones can't themselves be meaningful measures.

3. Milestones are too little, too late.

You reach a milestone or you don't. It's that simple. If you use milestones as measures, then you're really saying if we don't meet it, we've failed. But that's too trivial, and it also drives the wrong behaviour (people fiddling with the project schedule or scope, rather than making sure the project is making the improvements in business performance it was designed to). With continuous feedback that meaningful measures can give us over time, we can easily adjust our projects and activities as and when we learn what works and what doesn't. That's why milestones aren't meaningful measures.

Are you convinced that milestones aren't measures?

Where ever you have milestones in place of measures, you very likely need to go back to your intended results. What improvement are you trying to achieve? What difference are you trying to make? Why does reaching this milestone matter? Then focus on finding measures to track those results, through time, as feedback on how well your projects (and their milestones) are working in bringing those results into reality.

TAKING ACTION: 
Look over your own  business or strategic plan and check if you're using milestones where measures  need to be. If you are, a great way to find a meaningful measure is to ask "What  result do we want from successfully reaching this milestone?" And then develop a  measure for that result.

#30 Measure Once, Cut Twice: How To Remove Duplication and Distrust From Your Performance Measures

2009-09-14T16:50:00.000-07:00

It happens all the time: we inadvertantly measure the same thing, more than once in our businesses and end up with two or more different versions of the truth.

Not only does it waste effort in the measurement process, but it wastes time in decision making. Which version of the truth do you trust?

Whenever this nasty problem shows up, here are 5 ways you can cut it back down to size:

1. Make sure the two (or more) measures aren't in fact rightfully tracking different results, and if they are, rename the measures to reflect their difference.

2. Get clear who owns the measure: who is the right person to use it, the right person to decide the technical definition, the right person to report it. Everyone else can probably save their time and end their involvement with the measure.

3. Adopt the habit of including the measure's calculation where ever it is reported, to at least avoid the confusion that comes about when two seemingly identical measures tell different stories.

4. Automate reporting of the measure, so it's always sourcing the right data in the right way, and can be sliced and diced for those who want a tailored version of it, with controlled consistency.

5. Create a single definition of how the measure should be measured, and add it to your corporate performance measure dictionary.

Don't tolerate the wasted time, effort and missed opportunity that multiple versions of the truth spawn in your performance measurement process.

TAKING ACTION:
One of the most useful things you can do, to quit duplicating your measures, is get organised. And this means having a corporate approach to defining and documenting your measures. One version of the truth, in a single point of reference. Create a Performance Measure Dictionary for your organisation, and internally market its benefits so more and more people will use it.

#29 Three Ways to Toss Those Time-Wasting Measures

2009-08-31T17:04:00.000-07:00

We almost all do it: hang on to performance measures that we really don't need.

Believe me, measuring what doesn't matter does more harm than good! When you're measuring what doesn't matter, you're using up resources better spent analysing and improving, rather than reporting. And people's focus will be fractured by the sheer volume of data that's put in front of them.

So, what to do to toss those time-wasting measures away?

#1: Stop Reporting It And See What Happens

Decide, this month, to simply not include all the usual measures and statistics in the performance report that you suspect no-one refers to. You'll soon work out, by trial and error, which measures really do matter, because they'll be missed. It will help everyone else work out what really matters, too.

#2: Test Its Alignment To Strategy

Grab a flipchart page, or whiteboard, some pens, your business plan, and a list of all the measures you currently report. Along the top of the page or whiteboard, write each of the business goals. Then one goal at a time, list the measures that really, truly are fabulous evidence of the achievement of that goal. If the measure isn't fabulous evidence, then flick it.

#3: Have A Single Version Of The Truth

Don't measure the same thing in 12 different ways. Decide the one true way to calculate and report the measure, and standardise on that. I've seen immense amounts of time wasted in measuring something as straightforward as cycle time over a dozen different ways by almost as many different people, simply because no-one drew a line in the sand and said "Here's how we measure this."

Remove The Causes Of Cynicism

All the wasted time and effort and distraction from measuring anything else other than what truly matters is one of the reasons so many people are cynical about measuring performance. So go spring-clean your measure collection and everyone will be able to see what matters, much more easily.

TAKING ACTION:
If you know your measure collection needs some spring-cleaning (or severe control burning), pick one of the 3 suggestions in today's article and commit to doing it before the end of this month.

#28 Tackling 7 Common Objections to People Engaging in Performance Measures and KPIs

2009-08-18T00:07:00.000-07:00

We want people to buy in to KPIs, metrics and measures, because it's through people that measuring performance becomes improving performance. But they don't buy in because it's boring, it's often used as a big stick, and it's not easy to meaningfully measure what matters.

What can you do?

Short of overhauling the culture, you can be an Assumption Smasher. Listen to what people say about measuring, note the assumption they're making, and then diplomatically smash that assumption into smithereens! (Delicately, of course.)

Here are some of the most common excuses, rebuttals and ignorant truisms that people make about measuring, and how you can identify the assumption, and get the smashing underway.

"I don't need to measure because I already know what's going on."

The assumption is that what they are getting is an unbiased, complete and detailed snapshot of current performance and enough detail to detect small but real shifts in performance. Unbiased, complete and sufficiently detailed. Can anyone really get that without data? How exactly do they know?

"I've got real work to do!"

The assumption is that everything they are doing now is more important than measuring the performance of what they are doing. Interesting. Why are we busier than we know we should be? Doing things less than optimally or doing things that don't need to be done at all are often the culprits. That's what measuring helps us diagnose and test.

"The only measure I need is the bottom line."

The assumption is that you only need to measure the end result, and not the drivers of that result. The bottom line is information that's too little, too late. What performance measures do is give you the warnings and the clues about what's likely to happen, so you can make sure the results you need are the results you create, without wasting any time or resources.

"Measuring? Ick, how boring."

The assumption is that measuring is about monotonously collecting data and compiling spreadsheets swimming with numbers, then reporting all that to someone else. But when people set a few measures of what matters to them, create some simple and clear time series graphs, and collaborate to make the line on the graph move closer to the target, they experience purpose, motivation and satisfaction in a job well done. Do they value the measures they're producing?

"But we don't have the data!"

The assumption is that the data you have is the only data you should ever need, or can ever have. Rest assured, no organisation gets the data right, first go. You get the right data when you ask the right questions. And well chosen measures are an expression of the right questions.

"It's never worked in the past."

The assumption is that the past ways of doing measurement are the only ways. Ask them what about the process failed before, and what they would have done differently in hindsight. When the causes are clear, they can be fixed.

"This measurement thing is just another management fad."

Honestly! This assumption is that measuring hasn't been around that long, and is likely to pass because it's just for fun and giggles. Um, have they heard of Noah? Measuring was one of the earliest tools developed by humans, from cubits used as a unit of measurement to track the heights of Nile floods in ancient Egypt, to motions of the planets and moon to measure time. Humans have always wanted to measure what matters because it makes work easier.

Beware What Lurks Beneath Some of These Excuses...

You need to raise and test people's assumptions about performance measurement delicately, because beneath the surface can be some touchy nerves. They may be fearful of the transparency, of losing their jobs or losing status or resources. But be prepared to test these assumptions too, if they do bubble to the surface, but tread carefully.

TAKING ACTION:
Look out for the very next time someone says something that reveals an assumption they're making, which could be holding them back from buying in to measuring performance. Practice asking respectful questions to understand their assumptions and offer them another way of thinking about it.

#27 Should Performance Measurement Go On The Backburner When Times Get Tough?

2009-08-04T00:46:00.000-07:00

Measuring performance takes time, effort and money. You have to stop your "real work" to figure out what's worth measuring and set up the data capture and reporting to measure it.

So in times like these, when everyone's cutting budgets, downsizing and cancelling non-core projects, should performance measurement go on the backburner too?

Imagine that you do stop investing in performance measurement now, because times are tougher.

You've cut your training budget back, so you're not developing people's measurement skills. You've cut back staff numbers, so everyone's too busy doing real work to measure anything. You've turned your attention to doing something (anything) to adapt, and measuring feels like it's slowing you down.

Companies and organisations that think this way apparently must also think that performance measurement is not urgent, not core, and not essential to making the best of bad times. They must see measuring as a cost and not as a lever.

Here's why they're wrong:

1. In tough economic times, companies and organisations have more constraints, so they need to perform better to get the same results. Everyone knows, just like they know the sun rises in the east, that you can't improve performance unless you measure it (and measure it properly).

2. There's waste in everything, whether it's a core function or not. When times get tougher, it's the waste that has to go, not the highest costs. It's the fat that must be shed, not the muscle. Only by measuring to pinpoint the waste can you be sure you're not shedding important muscle.

3. What becomes urgent in economic downturn is the speed with which companies and organisations can adapt. The faster they can take control of performance, and identify and strip out the waste, the less they allow the downturn to take away from them. When you measure, you reach your goals faster.

TAKING ACTION:
What are your own opinions about this? Should performance measurement take a backseat until times get better, or not? Let's get some discussion going on theMeasure Up blog, leave your comment below.

#26 How to Isolate the Effect of Your Strategy and Test its True Impact

2009-07-20T15:19:00.000-07:00

Don't even try and work out how much time, effort, money and opportunity we waste by investing in business strategies that don't truly work. Let's instead talk about how exactly we can go about executing our strategies in a way that tests if they're working, by isolating their effect on our desired performance results.

These effect-isolating methods have been around for donkey's years, and they're really quite simple too, but sadly under-used as part of an organisation's or company's strategy execution.

Method 1: Before, During, After.

Time series analysis is the simplest and weakest form of isolating the effect of your strategies on their targeted performance results. Other factors can come into play over time also. But at the very least, it really helps to know what level performance is at before you execute your strategy, regularly throughout the process of executing your strategy, and for some time after it's fully executed.

If you see changes in your performance result that correlate with when you expected to see such changes, and you can rule out other obvious factors, then it's looking like reasonably good news for your strategy.

Method 2: Controlled Experiments.

No, you won't need to go buy a lab coat and pocket protector. Controlled experiments are simply designs for how you execute your strategy, where you execute your strategy in one area, but deliberately not in another area. For example, imagine your strategy is a new marketing campaign to encourage people to recycle more of their domestic rubbish. Your measure is the percentage of tonnes of domestic rubbish that is picked up by recycling rubbish trucks.

With a controlled experiment, you'd divide up your rubbish collection zone into two groups, let loose the marketing campaign in just one of these groups, and track your measure for both groups separately. You're looking for a signficant difference between the two groups after the campaign.

Method 3: Multi-variate Analysis.

You don't need a 4-year degree in statistics to get this - Microsoft Excel is enough for the basics. In its simplest form, multi-variate analysis is a collection of time series graphs you can visually examine to look at correlations and patterns among a range of factors that affect an outcome.

If you have a new strategy to increase sales revenue, like a customer loyalty program that offers discounts for repeat purchases, how will you know it's working? Particularly if economic downturn is affecting your industry, your marketing department is launching a new product, you get some fantastic but unplanned media attention, and you're concerned about several other factors that might confound the impact of your strategy.

If you track and measure that range of factors each month, say - like average industry sales, sales of new product, media mentions/hits, and so on - then you can build a multi-variate analysis using graphs that could highlight the impact of these factors on your outcome: sales revenue.

The Way to Stop Waste

Even if these methods sound like more effort than you're willing to go to, the truth of the matter is that in relation to the effort you'll be putting into executing your strategies, they're a drop in the ocean. And if you don't use some method of isolating and testing the impact of your strategies, you're making like an ostrich and burying your head in the sand rather than face the cold hard fact that your strategies could be a complete waste of time and money.

TAKING ACTION:
What's your next oppotunity to test a strategy to find out if it's truly working or not? Which method could you use to do this?

#25 Five Reasons Executives Support Performance Measurement

2009-07-06T14:09:00.000-07:00

There are some very good reasons why managers and executives DO give time and resources to performance measurement. And understanding these reasons is your key to reframing the value that performance measurement can have for the manager or executive who so far has no interest in supporting it.

REASON 1: Strategy is easier to communicate and cascade.

Todd is a CEO of a not-for-profit organisation. And one of the reasons why he supports performance measurement is that it helped him to clearly define what success meant for this organisation. Measuring success makes it far easier to communicate, and have people understand, the organisation's strategy and purpose.

REASON 2: Feeling a sense of control over the destiny of the organisation or company.

Rod is a CEO of a mid-sized company, and in his own words, performance measurement is important to him because he wants to take his company's destiny into his own hands. Measuring and tracking success helps leaders to feel in control - and sleep soundly at night because they know what's going on and how they're addressing it.

REASON 3: Stronger cohesion and clarity among their management team.

Paul is a Managing Director of a mid-sized company, and one of his strongest reasons for supporting (and championing) performance measurement was the power it gave him to build cohesiveness and clarity among his team of General Managers. Developing measures of success together, he saw how easy it was to check the level of shared understanding of goals and priorities, and each of his executive's roles in executing these within their own departments.

REASON 4: Easier for them to manage upwards.

Col is a CEO of a government owned organisation, and one of his reasons for supporting performance measurement in his organisation was that it makes it much easier to give his Board of Directors confidence that the direction is clear, and progress is really being made. Using measures to communicate clear direction and progress is far easier than reacting to every question or concern the Board has, when they have no objective feedback about priorities or progress.

REASON 5: Improving their own career prospects.

Peter, the manager of a procurement department, was able to demonstrate his management capability through achievement of some very aggressive performance targets. He was able to save the organisation $40M in a couple of years, and objectively demonstrate this saving, by diligently measuring and tracking his procurement strategy. This looks great on any manager's resume when they're applying for a senior executive position.

The point is that if you want your manager or executive to support performance measurement, to give time and resources to doing it and doing it well, telling them about Balanced Scorecards or dashboards or mantras like "you can't manage what you don't measure" simply won't work. You must frame the benefits of measuring what matters, which mean something to *them*, rather than trying to sell them the features.

TAKING ACTION:
Which of these reasons do you think would resonate most with your managers and executives? How can you start talking about performance measurement differently, so you're emphasising the benefits they care about, rather than the features you care about?

#24 Your 9-Point Performance Culture Change Management Plan

2009-06-15T23:46:00.000-07:00

Most performance measurement systems are never fully brought to life because of poor change management. The following prompts are a framework to design your performance measurement system, acknowledging that it is a change process, just like any other initiative your organisation faces in the spirit of continuous improvement and adaptation.

POINT 1: describe the difference your performance measures will make

What will it mean to have performance measurement working well in your organisation?

POINT 2: check who has control over initiating & maintaining this difference

Can you control the entire process of developing and using performance measures in your organisation? (Not likely.) Whose leadership, help and commitment will be important? Can you access, inspire and influence these people?

POINT 3: describe the differences in rich sensory detail

How do you want people to respond to developing and using performance measures? What will people be doing when then have performance measures? How will your organisation be different when it has and uses great performance measures? What old artifacts will be gone, and what new artifacts will replace them?

POINT 4: reflect on why you want performance measures

What is the ultimate reason why you want performance measures, why your organisation should have them? What can't your organisation achieve without performance measures? Will performance measures really be an important way to achieve these things? What else will you need to do?

POINT 5: define the evidence that will let you know performance measures are making the difference they should

What are the signs of the kind of performance measurement culture you want to nurture and mature? What will convince you and others that you have the "right" measures? How will you know that people are producing and using the measures properly? What are the indicators or flags of unwanted unintended consequences, or performance measurement "going bad"?

POINT 6: explore how performance measures will affect other things and be affected by other things

How are people likely to respond to the changes that come with developing and using performance measures? Which organisational systems, processes or structures help or hinder developing and using performance measures? For each effect you ponder, how can you avoid, overcome, work around, work with or compensate for it?

POINT 7: articulate the principles that will guide the change you are trying to make

What will be important to role model as your develop measures for your organisation? How should people all throughout the organisation be involved in the process? What philosophy about the role of performance measures will be important to weave through everything you do?

POINT 8: plan what needs to happen, when & where and who'll be involved

How will you engage the right people at the right times, stimulating their awareness, desire, knowledge and action? How will a framework that links measures to all levels of planning & decision making in the organisation be designed? How will those measures be brought to life, so they are regularly reported to the right people at the right times? How will you be certain that the measures will continue to be used, reviewed and replaced when no longer relevant?

POINT 9: work out the resources you will need to get from plan to reality

What amounts and types of funding, time, technology, space and knowledge do you need? Where will these resources come from? What will have to stop, be delayed or change to make this possible?

TAKING ACTION:
Are you treating performance measurement as an event, or as the process that it truly is? To build your performance measurement process, it helps to have a plan, just like any change project. Outline your plan using the prompts in this article. And if you want the step-by-step process to get you well and truly underway, read more about how the Performance Measure Blueprint can be your self-paced guide at http://www.staceybarr.com/PMBT.html.

#23 Five Steps to Find The Right Measures

2009-06-02T16:49:00.000-07:00

How to find the right measures is the most asked question in the field of performance measurement. And it's little wonder, because the more meaningful measures track outcomes which tend to be less tangible than the traditional things we've measured, like how many widgets we produced.

How do you translate results so intangible as employee morale or service quality or corporate image into solid, robust measures?

The framework described here is an excerpt of the How-to Kit: How to Design Meaningful Performance Measures, which provides a systematic approach for taking almost all of the pain out of the challenge of finding the right measures.

STEP 1: Begin with the end in mind.

Performance measures are objective comparisons that provide evidence of an important performance outcome. It is of the utmost importance to decide which outcomes are most worth tracking right now. As the first step in deciding how to measure an outcome, write down what the outcome is, what the difference is you are trying to create (and thus want to track using a measure). Focus on one outcome at a time.

STEP 2: Be sensory specific.

When you have the end in mind, you are ready to get a handle on what specifically about your outcome you will measure. This is where you take care in your choice of words to describe the outcome as concretely as possible. Use "sensory" language - the language that describes what you and others would see, hear, feel, do, taste or smell if your outcome was happening now. Avoid those inert words that we so often see in our goal and objective statements, such as: efficient, effective, reliable, sustainable and quality.

STEP 3: Check the bigger picture.

Check the bigger picture for what could happen if you measure your outcome. What level of control do you have over achieving it? What might the unintended consequences of measuring the outcome be (both the positive and the negative)? What behaviour would the measures drive? Which other areas of performance might be sabotaged or limited? This is your first chance to change your mind about what's most worth measuring.

STEP 4: What's the evidence?

Now, get ultra specific and figure out what the potential measures are that could let you (and everyone else) know that the outcome is being achieved. For each of your sensory rich statements from step 2, what could you count to tell you the extent to which it is occurring? Which of these potential measures would be the optimal balance between objectivity and feasibility?

STEP 5: Name the measure.

Naming your performance measures marks the point at which you know exactly what you will be measuring. Be succinct and informative and deliberate, as you need to be able to continually and easily identify each measure as it moves through the steps of being brought to life and being used in decision making.

TAKING ACTION:
Create your own measure design template based on these 5 steps (or save time and use mine, which includes examples and more detailed instructions, in the How-to Kit: How to Design Meaningful Performance Measures). Now use your measure design template to start designing measures for the tricky goals and objectives and results and outcomes you've struggled to measure thus far. Practice makes perfect!

#22 Why Won't People Commit To Their Goals?

2009-05-18T19:21:00.000-07:00

There are many reasons why people won't stay committed to their goals, but it's much easier to work with the reasons why they will stay committed. Here are four of those reasons, expressed as tactics you can deploy to make it much easier for people to keep to their goals.

TACTIC #1: Involve people to create goals that they value.

We're not robots, that unquestioningly do whatever our programmer tells us to do. We are humans, with the power of free will and choice. And no-one in their right mind is going to blindly give their time and energy (let alone their blood, sweat and tears) to achieving a goal they don't care about.

One of the best ways to get people to value their goals is to very actively involve them in choosing goals that are clearly relevant to the work they take pride in and to their personal values. For example, goals to do with trainee satisfaction and learning would matter to a trainer who took pride in their delivery.

TACTIC #2: Help people understand why their goals matter beyond their role.

We all know we work as part of a larger system, and want to know what we do is valuable in that system. So linking personal goals to company or organisational success is worth taking the time.

This means making obvious the cause-effect relationship of achieving our goals and the company acheiving its goals. For example, by trainers achieving high levels of trainee satisfaction and learning, the company vision of being a world-class training provider becomes the truth and not just a motherhood.

TACTIC #3: Allow people some sense of WIIFM from their goals.

WIIFM: what's in it for me? The WIIFM will be different for different people, but tapping into it will be the same as tapping into an endless supply of fuel to pursue the goals.

But don't think you can decide this for them! Only they can find a meaningful WIIFM for themselves. For example, by achieving goals to do with trainee satisfaction and learning, a trainer has evidence of how good a trainer they are which is great for their career, and they get the intrinsic satisfaction of knowing they've helped others.

TACTIC #4: Consistently remind people that their goals are important.

But don't just do a monthly rant about goals being important. Remind people of how important their goals are by celebrating progress toward the goals, inquiring about how progress is going, giving continual attention and energy to helping them achieve their goals.

For example, if a trainer receives higher satisfaction ratings for 3 workshops in a row, celebrate by buying them a decadent cupcake. If progress has plateaued, brainstorm with them for ideas to get moving again.

Humans are not assets.

Contrary to popular terminology, people are NOT the organisation's or company's greatest assets. People ARE the organisation or company. If we treat them like any other asset, however valuable, we miss out on the power that comes from their free will, engagement and passion in pursuing goals that simultaneously matter to them and to the organisation.

TAKING ACTION:
What's the process of setting personal and team goals in your organisation or company? Is it based on these tactics? Next time you're involved in setting personal or team goals, give deliberate attention to each of the above tactics and notice how differently people feel about their goals. Are they confident or cautious, excited or indifferent?

#21 Measuring For Collaboration, Not Competition

2009-05-04T02:24:00.000-07:00

We all know that what you measure influences people's behaviour. So if you want people to collaborate to improve corporate performance, rather than compete to improve personal performance (often at the expense of corporate performance), think carefully about what you measure!

Here are 5 practical steps to help your team to measure in way that will encourage collaboration to improve corporate performance, and help put an end to measures that trigger fights about who's right and who's wrong, rather than dialogue about how to achieve shared goals.

STEP #1: Forget about measuring individual people's performance. You read it right. And yes, I know it's common practice in many organisations to do this. They believe that organisational performance is the sum of individual people's performance. But take a closer look at those organisations and you'll see that people will be doing all they can to get good personal performance reviews at the expense of what's best for their team or the organisation.

STEP #2: Make regular time each week for the team to talk about shared goals. These might be part of your existing team meetings, or you could create a quick and easy stand-up meeting to check on progress of a goal, or discuss the meaning of a new goal, or explore ideas to achieve a goal more collaboratively.

STEP #3: Never blame people for performance shortfalls - always look to the process for clues about how to improve performance. Blame threatens the dignity of the people it is thrown at, and that takes personal power away from those people. If we seriously want people engaged in improving performance, they need to feel more empowered, not more disempowered. The majority of people want to do a good job, so make it easy for them!

STEP #4: Reward people for using measures to improve performance, for looking for causes of performance shortfalls, finding potential solutions to improve performance, for learning from their performance-improving experiments. And one of the best rewards is public recognition and celebration of what they've achieved. Encourage a culture of tracking, testing and tuning together.

STEP #5: Invite and encourage people to work together to design new and more meaningful measures for the goals they share. Creating new measures through discussion helps people converge on the same understanding of the goals they share, and helps them understand each others' points of view about those goals. With a democratic process to decide what to measure, the resulting buy-in will help the measures be used for collaboration, not competition.

TAKING ACTION:
Think of a team in your organisation where more performance improvement collaboration is needed. Which of the above 5 steps do you think will help them the most? Is there an opportunity for you to talk to them about this step, or to suggest how they can make some constructive progress toward better performance?

#20 The Story In Your Performance Data

2009-04-20T01:32:00.000-07:00

Your performance data is trying to tell you something. Something deeper and richer and more insightful than just whether or not you're on track to hit your target. Can you hear it? Probably not, unless you're already doing these six practices to hear your data's story.

PRACTICE #1: Use two or three related measures, not just one measure to understand a specific result. Staff Turnover is not a sufficient indicator of staff engagement, but combine it with measures like the percentage of staff intending to leave within the next 6 months and staff satisfaction with their worklife, you get a less biased picture.

PRACTICE #2: Don't tick & flick - consider all your measures as important characters in the same performance story. Don't you think that optimising on-time running and safety performance is much wiser than trying to maximise each of these, independent of the other?

PRACTICE #3: Consider qualitative indicators as well as quantitative measures to add more life to the story of performance. Just like a series of video case studies or photos of smashed up cars give sensory context to improvements over time indicated by road crash severity metrics.

PRACTICE #4: Look at your data in more ways than one - the average is only one small part of the plot. A fuller understanding of customer satisfaction comes from examining the variation in satisfaction ratings, the change in satisfaction levels over time, the correlation between satisfaction levels and revenue - not just the average satisfaction rating.

PRACTICE #5: Report causal analysis and hypotheses along with the performance results, to give the story somewhere to go. If cycle time is blowing out, then find out the events that likely triggered the shifts in cycle time, or find out on which activities most of the cycle time is being spent.

PRACTICE #6: Ask your data questions to draw out more of the story. Why aren't costs staying within budget? Which parts of the budget are blowing out most? Where is budget being managed well? What if we cut back spending on this?

When you think about putting your performance measures to use to improve performance, think systemically: do what you can to draw out the story in the performance data. Stories engage people, and when it comes to numbers and statistics and measures, we usually have to do all we can to get people engaged!

TAKING ACTION:
Think of one performance measure for which you have plenty of historical data. Collate that data, and start looking at it using different tools, to uncover its story. Try a time series graph to see if it's changed over time, a histogram to see its variability, a scatter plot to see how strongly it is associated with other measures.

#19 Don't Waste Time With Trivial Measures

2009-04-06T06:20:00.000-07:00

You hear it a lot, don't you? That you should only measure what you can control. Hogwash! The most powerful measures are those that track what you can only influence.

Let's take a closer look at how to measure to expand your influence - and get much more meaningful results.

Stephen Covey Started It...

In his landmark book, The 7 Habits of Highly Effective People, Stephen Covey talks about our circle of concern and circle of influence. The idea is that we shouldn't spend our time and energy worrying about things in our circle of concern. We've can't do anything about results we might want that are out there in our cirlce of concern.

But by the same token, we don't have to spend all our time focusing just on the results within our circle of control. If we do that, we measure trivial things only, like how much work we're doing.

The real power comes from what we do about the results we want in our circle of influence.

Focus On And Measure The Results In Your Circle of Influence

The kinds of results in our circle of influence include the impacts that our work has on our customers, colleagues, managers and suppliers. These results are the true purpose for turning up at work. Working hard and doing our tasks is *not* the purpose for turning up at work.

Measuring results in your circle of influence starts with examining the interface between your work and your customers and other stakeholders. And to understand what these results truly are, you're going to have to ask those customers and stakeholders. In their answers are the clues about what difference you can be making for them, and therefore what results you should be measuring.

It can also help to flowchart your work processes too, to make it more visible what exact outputs you provide to your customers and stakeholders, as a trigger to talk with them about the outcomes they experience. ('Outcomes' is just another word that means impacts or results.)

Exercise Your Influence To Improve Performance

When the performance measures of the results in your circle of influence show you where things are really at, you can focus more easily on what you can improve.

Remember that in your circle of influence, you're never aiming for 100% perfection. You're just aiming to move the results closer to where you (and your customers and stakeholders) want them to be. And you'll get better and better at this, but only if you keep at it over time.

Strategies to exercise your influence, to improve your performance results, include:

1. analysing your work processes, to find ways you can redesign or streamline how you produce those outputs for your customers and stakeholders

2. collaborating with others you work with, such as your colleagues or suppliers, to find ideas that might improve your performance results

3. raising awareness or knowledge of the desired results among others who have more influence than you do, and inviting their help

The idea is to not give up on measuring the results that matter, just because you're not sure you have enough control over the results that matter.

TAKING ACTION:
Is there an important result that you're not measuring because it's outside your circle of control? Take another look at that result, and if it's in your circle of influence, start measuring it and exploring how you can expand and exercise your influence in moving it closer to where you want it to be.

#18 Twenty-one Ways To Make Time For Measurement, Part 2

2009-03-16T22:12:00.000-07:00

Measuring what matters is more important than most things we give our time to. In Part 2 of this article, we're looking at even more ways for how to become more conscious of what you can stop doing, in order to make the time for performance measurement.

12. Write yourself a compelling vision for measurement. Be clear about what you want to achieve with performance measurement by painting a picture of success, in sensory rich detail. Read this vision every day.

13. Outsource or delegate your low value tasks. Stop doing your own document formatting, internet research, meeting organisation and filing. If you can write a simple instruction for how to do it, then delegate it to graduate assistants, administrative assistants or even outsource to a virtual assistant.

14. Scale back your scope of what to measure. Just start by meaningfully measuring one area of performance, or one team's goals. You don't need to start with the utopian corporate measurement framework.

15. Motivate yourself and others with success stories. Research organisations that have done measurement well, and are successful on account of it. Try Harvard Business Review, Balanced Scorecard Institute, APQC and Australian Business Excellence Awards case studies.

16. Practice saying no. Take a chance and just try it. Say no to something you don't believe is a good use of your time, or that is of lower importance than measurement of performance.

17. Avoid the office photocopier and water fountain. Avoid getting caught up in office chit-chat by avoiding the locations where it happens, and by practicing escape strategies that release you quickly if you do get caught. There are better ways to build the relationships that matter.

18. Deter interruptions with crime scene tape. Physical markers are a fun way to let people know when you really want to focus on what you're doing. Remember to turn off your phone and automatic email checking too.

19. Save time on existing tasks by using blocks. Group related tasks together - like writing, or making phone calls - and block out chunks of time in your diary to get through them. It's faster and easier to stay focused.

20. Negotiate with your manager on the relative priority of measurement. Make it clear with your manager how important measurement is relative to your other tasks, and remind and help them to actively support this decision.

21. Share these tips with others you want to involve in measurement. Just send them a copy or share them in conversation, so they too can find more time for the important performance measurement activities.

BONUS TIP: Learn how to do measurement right, the first time. Don't waste more time by doing measurement in the old ways of brainstorming and making do with traditional measures and existing data. Create and follow a performance measurement process that works.

TAKING ACTION:
From Part 1 and Part 2 of this article, choose 5 things you can do now to stop doing what is less important than measuring performance.

#17 Twenty-One Ways To Make Time For Measurement, Part 1

2009-03-02T13:21:00.000-08:00

Stop reporting measures that no-one uses. Be daring - stop reporting what you know isn't being used, and if anyone notices, use it as an opportunity to start a conversation about how to decide what is worth measuring and reporting.

2. Reduce your time in meetings. Meetings always take longer than they need to. The big time wasters are tangents, people arriving late and violent agreements that mistakenly sound like useful debates. Start on time, finish early and diplomatically manage the discussion.

3. Reduce the number of meetings you attend. Agree only to meetings that have a clear purpose that is aligned to your role and responsibilities. Don't go to meetings out of obligation or interest alone.

4. Rank your priorities and drop the bottom 10%. List your tasks, both what you are doing and what you should be doing, and rank them in order of importance. Simply stop doing the bottom 10% - they are likely to have consequences far less than failing to measure what matters.

5. Design your weekly schedule to make time for measurement. Set a regular time in your diary that you block out for measurement related activities, then put the remainder of your tasks around that. Like Stephen Covey explains, put the big rocks (the important stuff) in first, and you'll fit more of the smaller rocks in anyway.

6. Bring up measurement in corridor conversations and existing meetings. Don't wait for measurement time. Use natural conversations that have even minor relevance to performance and results as an opportunity to talk about measures that matter.

7. Hold yourself accountable. Set yourself progress goals for choosing, creating and using measures, and reward yourself when you achieve them.

8. Get others to hold you accountable. Agree progress goals with your manager or colleagues or customers for choosing, creating and using measures. Set regular check-in time with them to pat yourselves on the back - or face the music.

9. Stop initiatives that are only treating symptoms. If you're giving time to projects or initiatives that aren't working, or aren't fixing root causes of performance problems, stop the process and design a new one that incorporates measurement of root causes.

10. Save time by stopping when it's good enough. Stop overprocessing whatever you do, and get clear about the point at which you've done what will work, and don't waste time gold-plating it.

11. Create a measurement mastermind group. Find like-minded people in your organisation and meet for lunch once a month to move through each other's measurement challenges by sharing ideas and experiences.

TAKING ACTION:

Can you choose just one of the first 11 ways to make time for measurement, and practice it over the next two weeks?

#16 Accelerate The Buy-In With A Measures Team

2009-02-15T15:57:00.000-08:00

One of the things that separates organisations who race ahead with their performance measurement from those that spin their wheels is the cross-organisational Measures Team.

A Measures Team is a group of representatives from the various groups within your organisation, who are the leaders or facilitators or coordinators of performance measurement in their group.

The Measures Team is usually led by someone in a corporate role, such as the Chief Performance Officer or someone in the corporate strategy, planning and performance group. And their mission is unify, coordinate, support and learn how performance measurement happens across the entire organisation.

This group is essentially a mastermind. And with the power of them all working together, you can accelerate the progress your organisation makes in measuring what matters, and get that much sought after buy-in right across the organisation too.

But for a Measures Team to work well, there are a range of conditions that you ought to strive for in setting up and managing them:

CONDITION 1: Include volunteers only. You want your Measures Team to be positive and enthused and engaged and not hold up progress with their cynicism and procrastination. I've worked with Measures Teams where some members were nominated by managers and because their heart wasn't in it, everyone else had to make up for it with extra work, and wider buy-in suffered greatly.

CONDITION 2: Make sure Measures Team members' managers support their involvement. Talk with managers to make it clear what the commitment involves and get their promise that this time will be freed in their Measures Team representatives' schedules. You can't "bolt on" performance measurement - it has to be a priority higher than something else, which they will stop doing to make the time.

CONDITION 3: Meet with your Measures Team regularly. Weekly is ideal but meet certainly no less than monthly, so you can keep the momentum and team dynamics very strong. With some of the Measures Teams I've coached, we've had two teleconferences and one live meeting each month.

CONDITION 4: Focus your Measures Team meetings on supporting each other. That's the mastermind concept: sharing insights, learning from each other, solving problems together. We often spend time with a status check, followed by an open dialogue for everyone to reflect, then get to action planning to solve any problems or bring any great ideas to fruition.

CONDITION 5: Encourage your Measure Team members to collaborate with each other. They will learn a lot and help to bridge those gaps between the organisational silos when they can support each other during measure workshops or meetings within their own divisions. It will accelerate their learning, their progress and build a stronger Measures Team too.

CONDITION 6: Have a single, organisational approach to performance measurement. It's so important that everyone in your Measures Team is pursuing the same vision, the same way. You'll move faster and waste a LOT less time with debates about how to choose a measure or what to include in a performance report.

CONDITION 7: Train your Measures Team members in performance measurement. Virtually all the Measures Teams I've worked with have started out attending my Performance Measure Blueprint Workshop, and some even continue their development through my more advanced PuMP Facilitator MasterMind program. But the point is, don't assume they have the performance measurement knowledge they need. Experience shows this is a bad assumption to make.

CONDITION 8: Train your Measures Team members in group facilitation. The people in your Measures Team will be spending most of their time helping their colleagues in their own group to develop and use better measures. They'll do this more confidently, more easily and more quickly if they know how to facilitate group dynamics and group processes. And they'll get much more buy-in that way too.

CONDITION 9: Celebrate your successes, including failures you've learned from. Your Measures Team, like any other group of people in your organisation, will find their motivation wane unless they get some intrinsic value from being a part of performance measurement. So design celebration into your charter.

CONDITION 10: Use a plan for performance measurement implementation for your organisation. Don't let the Measures Team plod aimlessly along, or you'll find your meetings turning into therapy sessions rather than powerful thinktanks that propel performance measurement forward. Have a big picture direction and an action plan all will follow.

CONDITION 11: Nurture the buy-in of your Measures Team members. Give them ownership too of the approach to performance measurement that you're taking, the way they work together, the way they document and coordinate their performance measurement work. But that said, I know many do appreciate having a starting point so they don't have to create everything from scratch. Sometimes they just need to have say, and be heard.

TAKING ACTION:
If you don't have a Measures Team yet, give some serious thought to how you could get one started, using the tips in this article. If you do have a Measures Team, do any of these tips give you ideas to help them work better?

#15 Activities, Outputs and Outcomes! Oh My!

2009-02-02T18:06:00.000-08:00

As practitioners in the Land of Performance Measurement, we have our own version of Dorothy's 'Lions and tigers and bears' in the Land of Oz.

We have activities, outputs and outcomes. Creatures that seem so much more frightening than they truly are, and mostly because we don't really understand whether and how we are supposed to measure them.

The truth is, we should measure all three.

But don't go skipping down the yellow brick road too quickly, measuring every activity, output and outcome you make friends with along the way.

Let's look first at the relationship between the three, because it's in that relationship that you'll find the answer to how to measure them meaningfully.

Outcomes Are Your Ultimate Performance.

Outcomes are important to measure because it's important that we deliberately define and focus on fulfilling our purpose. Every team should have a purpose, otherwise their talents and energy and the resources they consume are wasted.

The trick with measuring outcomes though, is you have to start with your customer or stakeholder - those people that use your service or product. Only they can define the outcomes that really matter enough to measure.

Outputs Are The Drivers Of Outcome Performance.

Outputs are also important to measure, because they are the drivers of the outcomes. The better your outputs align with your stakeholder outcomes, the better those outcomes will be achieved. It has to be a conscious connection.

Measuring outputs is often easier than outcomes, because unlike outcomes, you can directly see what you are delivering to your customers or stakeholders. And if you can see it, you can measure it. But a word of caution: still take the time to define what those outputs are before you choose measures.

Activities Are The Drivers Of Output Performance.

Activities are also worth measuring, because how well you perform those activities drives the quality of outputs you produce and how well those outputs can create the outcomes your customers and stakeholders want and need.

But the important things to measure about activities are not just how much of them you are doing, but how well you are doing them. And not all activities are worth measuring: only those that have the biggest impact on your outputs and outcomes.

Sketch A Cause-Effect Chain

It's much easier to visualise and communicate the relationship between activites, outputs and outcomes when you can draw the cause-effect relationships between them. With my clients, I use a tool called a Results Map, but you can use a simple flowchart to get started. And before you can click your heels together three times, you'll be on your way to a more meaningful balance of performance measures!

YOUR CHALLENGE:
Take a look at a sample of measures your organisation has now, and work out which are tracking activities, which are tracking outputs and which are tracking outcomes. See if there is a sensible cause-effect relationship between them.

#14 WOW! What a Cool Performance Report!

2009-01-19T02:09:00.000-08:00

How fast you can get from "We need some measures," to "Wow, what a cool performance report!", the better.

We all know that one of the big reasons people will fight tooth and nail to avoid measuring performance is that it's hard and boring (at least from a newbie's or cynic's perspective).

And it's no help that people see performance measurement taking so damn long to get implemented.

So it's probably no surprise that my PuMP Performance Measure Facilitators say the best part of their program is when they produce the first properly designed performance report with their teams.

One PuMP Facilitator said it was the point that it all came clear to his team just why they were putting the effort into measuring.

As a performance measure practitioner yourself, one of your own measures ought to be the cycle time to get from "We need some measures," to "Wow, what a cool performance report!" And track that cycle time for each performance measurement implementation assignment you undertake within your organisation.

So how can you reduce this cycle time from the typical year or more, to mere weeks? Try these ideas on for size:

1. focus your team on measuring just one goal or one performance result first time through
2. treat it as a pilot test - don't try to perfect and complete it all, just get a first cut measure established
3. give a deadline to each step in the measurement process, and get as good as you can within the deadline rather than waiting for perfection before starting the next step
4. make sure your measures team has allocated enough time to work on measures each week
5. have the measures team's manager regularly pop in for updates

The sooner you have your colleagues using measures they value, the faster you'll ramp up the performance culture and the faster everything else will improve!

YOUR CHALLENGE:
Reflect on how long, on average, it's been taking your colleagues to get from wanting measures to actually having those measures ready to use, in performance reports. Then set a target to reduce that time by 50% and set about streamlining your measure creation process!

#13 Five Goals For The Performance Measure Practitioner

2009-01-06T15:13:00.000-08:00

It's time to take performance measurement and management seriously.

We've wasted too many years playing around at the edges of measuring performance in our organisations. Debating over what kind of scorecard framework to use. Investing in dashboard software because of the bells and whistles and flashing traffic lights. Measuring things just because we always have or just because we can or just because someone asked us to.

If we want better results from performance measurement, and there's no doubt that most of the potential of performance measurement is yet to be tapped, we have to take it seriously. And that means treating it as a process that needs to be formalised, managed and improved.

This is the job of the Performance Measure Practitioner. It's an emerging role in many organisations now, that have recognised that it will happen well when it's lead and managed well. And one of the first things a Performance Measure Practitioner should have is a set of clear goals for where they will improve their organisation's approach to performance measurement.

Given that most organisations are still struggling with the early stages of implementing performance measurement, the following 5 goals are a realistic place to start:

GOAL 1: Improve managers' and employees' perception of the value and importance of measuring performance.

GOAL 2: Lift the skill level of managers and employees in selecting meaningful measures and using measures to support their decisions.

GOAL 3: Increase the active involvement of employees in selecting and implementing performance measures.

GOAL 4: Reduce the cycle time of implementing new performance measures, from choosing them to using them.

GOAL 5: Increase the proportion of strategic and operational business objectives that have meaningful measures identified.

Certainly these are not the only worthwhile goals for a Performance Measure Practitioner, but they are a very worthwhile place to begin, if you don't currently have any serious goals to focus how you'll lead your organisation to improve how it will measure and master what matters.

YOUR CHALLENGE:
Choose just ONE goal to start 2009 with, to advance your organisation's use of performance measurement, and decide how you will measure this goal. Share your goal with us at the Measure Up blog!

#12 How Would Santa Claus Measure His Performance?

2008-12-15T13:22:00.000-08:00

Santa Claus is one amazing character.

To avoid disappointing any of the estimated 380 odd million Christian children in the world on Christmas Eve, Santa Claus needs to be capable of some pretty spectacular performances:

Santa's memory is so good, he can recall 380 million childrens' Christmas wish lists.
Santa visits about 970 households per second.
To achieve this, his sleigh has to travel at over 1000 kilometres per second (3000 times the speed of sound).
The sleigh's payload (that is, the sack of toys) is estimated at being about 500,000 tonnes.
Santa's reindeer are each 40,000 times stronger and faster than the average ordinary reindeer.
Santa's reindeer, due to air resistance created by the astronomical speeds they travel, each absorb up to 14,300,000,000,000,000,000 joules of energy every second.
Each time the sleigh takes off, Santa is subjected to 17,500 g of force (apparently the average human will black out at about 4 or 5 g).

This is an engineer's perspective on Santa Claus, (you can read more at
http://www.baltimoremd.com/humor/santaengineer.html) and it has been suggested that these calculations might be proof that Santa Claus doesn't really exist. But that's not the point of this month's Handy Hint. These trivial statistics illustrate a few interesting points about performance measures...

Measuring Capability

Measuring what your organisation or process or team is capable of (modelled from past performance) can help you anticipate how likely you are to meet changing stakeholder needs. As the Christian population in the world grows, how much faster will Santa have to travel, and how much more will the sleigh have to carry, and how much more energy will the reindeer have to absorb? How many more toys will the elves have to make?
What kinds of toys will most influence the children of tomorrow to be nice and not naughty?

Measuring Outputs

Santa's outputs are the results of his activities, what he produces. And what he produces is gifts delivered to Christian children that have been nice and not naughty. Measures of his outputs might include: the % of nice children that did receive a gift, the % of children that received the gift they requested, the % of children that received a gift they loved, the safe return of Santa and the reindeer to the North Pole sometime on Christmas morning.

Outputs are produced over and over again by our business processes, but for the purpose of making some bigger, ultimate set of outcomes happen.

Measuring Outcomes

Measuring activities and outputs might be interesting and easy, but we need to measure the ultimate set of outcomes of our activities and products if we care at all about what we are doing. Santa doesn't do the Christmas Eve thing because it's a challenge. He actually really wants to encourage children to be nice and not naughty (source:
http://www.northpole.com/Clubhouse/Q&A/Santa.html) and he rewards those children being nice with gifts on Christmas Eve.

Santa's ultimate outcome measure might be the percentage of children that always behave nicely. He might analyse trends in this information - he has years and years of history, as he's been at it for around 1600 years (source: http://www.oldandsold.com/articles01/article762.shtml).
Santa might also benchmark this measure against the motivators for non-Christian children to be nice and not naughty, to see how well his gift strategy is working.

Linking Outcome Measures to Capability Measures

There is a logical connection among these three types of measures. The capability measures predict the quality of the outputs, and the quality of the outputs predict the quality of the outcomes. If Santa's elves make the right kinds of toys, then more children will get the gift they want and thus, more children will be influenced by Santa's message to be nice and not naughty.

YOUR CHALLENGE:
Have a very safe, incredibly happy and gorgeously relaxing Christmas Holiday Season! And hopefully that *won't* be a challenge!

#11 How Often Should You Track Your Measures?

2008-12-01T02:55:00.000-08:00

Are you still measuring performance results annually?

And do you wonder why people aren't really getting much value from measuring performance?

Because performance measures are feedback, you need to track them often enough for the feedback to be of any use in guiding your decisions and actions to improve performance.

So here's a checklist to help you decide whether you should measure a result on a weekly, monthly, quarterly, or annual basis:

__ How SENSITIVE is the performance result to change? If you were to go make an improvement now, how long would it take before you saw the effect? For example, if it takes years to see change happen, like a staff safety culture or community attitudes to water use, you can probably get away with measuring six monthly or annually.

__ How URGENTLY do you want to know if the performance result has shifted? Is this a result that needs to be improved in the next six to 12 months? If so, it probably needs to be measured at least monthly!

__ How COSTLY would it be to measure the performance result more frequently? Is this worth the benefit of having more frequent feedback?
Could you improve performance so much that the cost of measuring more frequently is far outweighed by savings or added value?

__ How ACCURATELY do you need to measure the performance result? By taking smaller samples more frequently, you can reduce the cost of measuring often. But with smaller samples comes less reliability, so take care. If you just need a good indicator of the trend or change over time, smaller samples can work a treat.

YOUR CHALLENGE:
Think about the kind of response or action you designed your measure to inform. Are you measuring it frequently enough to inform you before you act, or only frequently enough to tell you after you act?

#10 Selling The Value Of Measuring Performance

2008-11-17T13:21:00.000-08:00

Selling The Value Of Measuring Performance

Are you struggling to get executives, managers and colleagues to want to measure performance?

Do you keep telling them how important it is, how it's essential to high performance, but they still don't care?

It's time to get good at something that, as someone who values objective information and informed decision making, you may not like.

You have to become a good marketer.

If your executives, managers and colleagues aren't convinced that measuring performance is a fabulous idea, then your getting better measurement skills isn't the priority right now. You need a quick course in Marketing 101, and it's here in the form of "the five Ps" of
marketing:

PEOPLE -- Who *exactly* are you trying convince that measuring is a good idea?

Knowing and understanding who you want to have embrace performance measurement is your first step. That's because how and when and what you do to get the attention of a Senior Executive is going to be very different from a front-line worker.

Name each "target market" of stakeholders who you know need a better appreciation of the value of measuring performance.

Then write a story about each one, describing their pains, their visions, their priorities, their biases -- so you can start your campaign from a respectful appreciation of where they currently stand.

PRODUCT -- What *exactly* do you want them to do about measuring?

If you're starting from ground zero, where your executives, managers or colleagues really don't have any interest in measurement, then don't expect them to suddenly sign up for a year-long, six-figure investment in transforming the measurement system for your organisation! At least not after one interaction with you, however inspiring that might be.

Decide what is a fantastic step forward for them to make, what it is you want each target market to "buy" from you. Perhaps it's to let you lead them through pilot to measure just one performance result or problem. Or maybe it's to have them summon up the curiosity to hear how other organisations have flourished by measuring what matters.

PRICE -- What must they "pay" to get the benefits of measuring?

Everything has a price! And a big part of what's probably holding back your executive, manager or colleague is their perception of what they have to give up to embark on measuring performance.

The price they have to pay is certainly more than a slice of their budget. It's their time, their staff's time, their perceived risk of it failing or being a complete bore, a project that to them is a lot more exciting or valuable. Understand this perceived price for each target market, and you're half way to being able to clearly lay out the return on investment of performance measurement.

PROMOTION -- What's the message that will get their attention?

Be very clear about the benefits of measuring performance, not the features. Your message has to be almost entirely about the "why" of measuring performance, not the steps, not the technology, not the methodology. And this will vary for each target market. If you can describe the sparkling benefits of measuring performance, you've got the other half of a clear return on investment of performance measurement.

Knowing rather than assuming or guessing. Reaching goals faster.
Improving performance with less wasted effort. Making strategy tangible and actionable for staff. Create your list of benefits as the basis of the message you want at the centre of your Performance Measurement Marketing Campaign.

PLACEMENT -- How can you reach the people you want to convince?

When, where and how you'll deliver your message to your target market needs some careful thought. You're competing with a gazillion other things screaming for the attention of your executives, managers or colleagues. The quicker and more conveniently you can communicate your measurement message to your target market, the higher the chances they'll hear it.

Think about opportunities like upcoming meetings, your company newsletter, a well-crafted email or memo, even brief moments where paths cross in corridors and elevators. And a word of advice: deliver your measurement message authentically, naturally and with your honest passion, so you won't sound salesy.

Now go DELIVER your measurement message!

There are various versions of the marketing Ps, but these five make fine bones for you to flesh out with your tailor-made Performance Measurement Marketing Campaign. Sure, you'll need to practice and hone and practice some more. But action learning like that is the fastest way to go.

Go get 'em, tiger!

#9 How To Make Measuring A Little Bit Sexier

2008-11-02T23:29:00.000-08:00

Question: What words do people use to describe performance measurement?

Answer: Boring. Dull. Bureaucratic. Effort. Nerdy. Challenging. Threatening. Irrelevant. Failure. Fad.

Words we'd rather hear describing measurement: Curious. Insightful. Relieving. Motivating. Focusing. Priorities. Improvement. Success. Achievement.

For many reasons, people are more likely going to have negative feelings about measuring performance. And before you're going to win their enthusiasm to take measuring performance seriously, you have to spin those feelings around.

A great way to do that is to give them a very different experience of what measuring performance is all about. And a successful "run on the board" can do just that.

Forget about trying to convince everyone that measurement is important. Forget about telling people their current measures suck. Forget about designing that corporate-wide, top-down, aligned-to-strategy measurement framework. Think small, think fast, think impact!

Somewhere in your organisation you'll be able to find an opportunity to put practical performance measures to work to make a fast impact. You might already know of one manager who needs no convincing that measuring matters. Or maybe you know of a recurring problem one team has, that everyone knows about, like the maintenance team taking too long, or the IT team handling help desk calls badly. Think laterally about where an opportunity might be.

Then go and talk to the people who own that opportunity. Ask them if they'd appreciate some help to solve the problem, to get to the bottom of it and nail it once and for all. Don't ask them if they need some performance measures! Yes, you'll create and use a few performance measures to help them fix the problem, but the emphasis has to be on solving the problem.

It's going to be easier for you if the people who own the opportunity are keen. If not, keep looking for other opportunities. You're after a small, fast run on the board that shows the impact that comes from using measures to assess, diagnose and fix problems people don't want to have.

When you find your opportunity, treat it like you would a small, pilot project. Focus on a single result you will improve, and schedule it such that inside of 2 or 3 months, you've created a few useful measures, and used those measures to diagnose the problem, to find a solution to the problem, and so show improvement in the end result.

And there's one more thing, something wierdly powerful. Write up the project as a story. No, no, no - don't use your project documentation template! Create something more akin to a scrapbook, with photos, quotes, anecdotes, learnings, mistakes, funny antics. Make it as human as possible.

And show and tell this story to anyone to whom you'd like to give a different experience of measuring performance.

#8 Three Types of Powerful Process Measures

2008-10-20T17:28:00.000-07:00

Imagine that you're the manager of a department in a railway that rails sugar from the mill to the port. Your department takes orders from the mill for trains when they're needed, to come and load up with sugar at the silos, and chug them along the tracks to dump the sugar at the port for export.

And you've just had a call from the manager at the sugar mill: "Where are those *%$# trains we ordered?! We've had to shut down production AGAIN because the silos are full. You know how much that costs us! When are you guys going to get your train problem sorted?!"

It's not too far from the truth. Many years ago I worked with a pretty forward-thinking manager in the railways, and one of his processes was the flow of sugar from mill to port. And he probably had not too dissimilar words with the sugar mill manager on the odd occassion.

The problem was in the white space. The hand off points between parties in the sugar process, as sugar flows from the mill to the port. Actually, even as it flows from the canefields to the ships.

And how this railway manager solved the problem was basically looking at the whole process and using three types of measures to find the bottleneck and fix it.

#1: Process Outcome Measures - these set the priorities for the process.

A really important outcome of the sugar process was that it flowed without causing the sugar mill to have to stop production on account of not enough trains to keep emptying the mill's silos. Stopping production is a HUGE waste of time and capital and labour costs. So this was a very important outcome measure for the sugar train process - the hours of mill downtime caused by insufficient train capacity.

#2: Process Output Measures - these help in diagnosing and testing improvements to the process.

The sugar train manager flowcharted the entire process from when the mill ordered a train to when the train left the port after unloading the sugar for export. An important output for the sugar train system is the number of tonnes of sugar delivered to the port on time. In a way, it's a measure of the capacity or throughput of the train system.

#3: In-Process Measures - these are the powerful measures!

One of the problems in the sugar train system was that the trains, in fact, were not keeping up with production. And the railway's first response - by tradition - was to put more trains into the system. Very expensive. But our forward-thinking sugar train manager looked deeper into the problem.

He discovered that increasing the number of trains or the number of wagons on each train would improve capacity at too high a cost. By modeling the sugar system, he found that he could increase capacity by using the same (or less) rollingstock in a way that was very different to traditional thinking: create trains that were a fixed length that cycled more frequently through the sugar system. No trains needed to be ordered, no need to change the number of wagons on the train each time. The unit-length trains just kept cycling through the system.

And to add insult to injury to traditional railway thinking, they made sure they had enough wagons on these fixed length trains so that one wagon would stay empty because it wasn't needed. Sacrilege! Fancy running an empty wagon - that's not earning the railway any revenue!

But that's the key to the transformational measure: when that empty wagon was actually needed to empty the sugar silos, it was a lead indicator that production was beginning to exceed the railing capacity.
So the railway could ramp up capacity before the mill ever had to stop production.

Transformational measures are almost always the in-process measures. But you have to really understand your process to find them!

#7 Using Targets to Set Your Success Trajectory

2008-10-06T22:06:00.000-07:00

Some people talk about stretch targets. Or BHAGs (Big Hairy Audacious Goals). They represent a very large and significant improvement in performance. Pretend, for example, you were measuring On Time Delivery, the percentage of times you delivered your product or service to your customers on or before the agreed time, each month. And let's say that currently your On Time Delivery averaged around 45%. A stretch target would be to average around 95%.

Usually stretch targets scare the living daylights out of people. They have no idea how or if it can be achieved and they don't want the pressure of failing to meet the stretch target. Occassionally stretch targets can be motivating and inspiring, but rarely without careful leadership, a strong improvement culture or a damn good reason!

Many people prefer to talk about chievable targets. They represent a very doable, but small, improvement in performance. An achievable target for your On Time Delivey measure might be 50%. People believe in achievable targets. They usually have a pretty good idea of what it would take to reach them, and don't have any qualms about giving it a go. It's inside their comfort zone.

So which type of target should you have? Or can you have your cake and eat it too?

Clearly, the size of your target depends on the size of your organisation's belief in their ability to improve things, to make change happen, to decide on what to fix and execute that decision. But you don't have to have just one target.

For any performance measure, you can lay out a path into the future using a series of targets paving the way to the level of success you want. For our On Time Delivery example, it might work like this:

current level: 45%
6 month target: 50%
12 month target: 60%
18 month target: 80%
24 month target: 95%

The target series follows the trajectory from now to the ultimate place you want performance to be, by starting out small and building momentum that will make each successive target easier to achieve.

You've heard that quote from Sir Isaac Newton, "If I have seen farther than others it is because I have stood on the shoulders of giants", haven't you? Well the idea with target trajectories is the same. You will see the way to the next target from the vantage point you achieve through reaching the previous target.

#6 Do Your Results And Measures Need A Divorce?

2008-09-17T14:30:00.000-07:00

One of the most common reasons people hate their measures is not that the measure is bad. It's that the measure is the wrong one for the result they're trying to monitor.

A performance area you see this happening a lot is customer service performance. There are a raft of customer related measures around these days, each with its own promise of driving business growth. And don't think that the research will lay it out clearly for you. Depending on what you read, you could be a believer in the Net Promoter Score's "power on one" image, or a trigger-happy defender of the good old customer satisfaction index.

But we forget something vitally important, as we too eagerly dive into debates about which is the best measure.

We forget to start with the result we're trying to monitor.

Let's use the very trendy Net Promoter Score as an example. Managers love it for its simplicty and the exciting claims that NPS is a strong predictor of business growth. But recent research - like an article in the Summer 2008 issue of MIT Sloan Management Review - is challenging the superiority of NPS over other customer measures to predict growth. How could this be, and what should we do? Should we throw it out like bath water?

The calculation of NPS comes from asking your customers the question "How likely is it that you would recommend us to a friend or colleague?" It's simply measuring the customer's intention to recommend. And that's a few steps removed from the result of getting more profitable customers and more from existing customers.

But the NPS is a good predictor of whether customers will actually recommend your product or service or company to others. And this is certainly deemed one of the important behaviours that will contribute toward business growth. The problem is not with the measure, but with the result it's married to.

Always check and revisit the result you're wanting to monitor!

You want to make sure you don't fall into the proxy trap too often, and use the wrong measures as evidence of important results. In the case of NPS, you should ideally be measuring NPS, plus the actual percentage of your new customers that are referred by existing customers, plus how much business growth this adds in terms of profit. Then you have a more complete story.

Whether it's customer service performance or any other area of performance in your organisation, you can only find meaningful performance measures when you start from, and stay well aware of, the meaningful results you're trying to measure! Always design or choose your measures through a deep understanding of your results.

#5 Measuring What You "Need" Versus What You "Can"

2008-09-01T14:38:00.000-07:00

There are all kinds of reasons why so many organisations have performance reports that are bursting at the seams with measures that mean nothing, impact nothing or lead to nothing. They're measures that some will say "that's interesting" and others will bark are "a waste of time".

Often it's because they are the measures that have always been reported, or some manager once wanted the measure for a project that ended five and a half years ago but it's still being report just in case, or because something is better than the nothing that would exist if we left it up to decision makers to decide what should be in the reports.

Irrespective of why, this is for certain: if a measure is not informing a decision or choice, it's wasting space and time and most certainly money.

But how do you start the move from measuring what's easy to measuring what matters?

You may not be able right now to engage all your report users in a process to decide the most meaningful measures to include. It's not as simple as a measures brainstorming exercise! So try these simple tactics in the meantime:

Start asking report users which measures or pages they always look at first, and why. Chances are their attention will go to what matters most, first.
Similary, ask report users which measures they virtually never look at or never use to inform their decision making. Listen out for whether they use the word "interesting" versus "useful"!
Start dropping out the measures that report users rarely use or say are just interesting. Don't ask their permission if you don't have to, as their reactions will tell you if the measures need to be there. Often people don't notice or miss what they don't value.
Ask report users what decisions they use the report to inform or assist with. I'll bet it's a question they've never asked themselves and your giving them the opportunity to become conscious of that may just help them get clearer about what information they do need.
If you have to molly-coddle your report users because they'll freak if their reports change, then next month try producing two versions of the report. One as per usual, and the other a pared-down version without the least valued measures or information. Give them the latter first, and only use the original version as a backup pacifier!

#4 Engaging Managers To Measure: What Don't They Know?

2008-08-19T22:55:00.000-07:00

It's always going to be harder, longer and more painful to embed good performance measurement into an organisation whose leaders don't champion the effort.

Sure, you can get some great traction by introducing performance measurement here and there, to assist a team in measuring the impact of a project, or to solve a known problem in their processes, or to demonstrate the impact they create for the resources they get. But truly embedding performance measurement as an accepted and valued part of doing business is an uphill battle without management support.

You already appreciate that performance measures' power is helping us to know. Helping us to know objectively and confidently what is *really* happening with our business performance so we can stop wasting time and effort doing the wrong stuff when we show up at work each day. No crystal ball needed!

Do your cagey managers appreciate this too?

If you're not sure, then here are three tips to strike up a chat that might just plant the seeds for them to see measurement as a fertile idea:

Tip #1: Find out a problem that's bugging them right now. And ask them, "Is there something you don't know yet, that if you did know it, you'd be able to do something about this problem?" This problem may be easier to solve if you could measure the thing they don't know yet.
Tip #2: Ask them, "If you had more time to walk around and find out how our [division] is really performing, what would you want to look for first?" A good performance measure could show them, without the need for them to walk around and see for themselves.
Tip #3: Check if they are getting any pressure to validate their actions or performance to their own managers or stakeholders. Rather than them having to feel defensive or give "hearsay" validation, a couple of good measures can do the job far more convincingly instead.

Can you see that the key is to start with what is relevant to them now, and *not* with anything about measures?

Of course, try variations on these ideas. But the important thing is to try. You have more influence than you think!

#3 How To Make Your Performance Measurement Plan Realistic

2008-08-05T02:29:00.000-07:00

Haste makes waste, they say. And you can see it plain as day in how many organisations go about measuring performance.

They tack a brainstorming session onto the annual planning workshop and wonder why the measures they end up with aren't relevant to their goals, why no-one really has ownership of the measures, why the measures don't bring insight to decision making. Measurement is a process, not an event! It's a process that takes time and effort to do properly. And it's one of those things that you're better off not doing at all if you don't do it properly.
Make your performance measurement plan realistic, by allowing time for the most important parts of the experience:

Tip #1: Allow time for people to discuss and translate the organisation's strategy into measurable results. Usually people don't have a shared and sensory understanding of the strategy, and need to talk about it in language that helps them see it, hear it, feel it. Language is the difference between a goal that is measurable and one that is immeasurable.
Tip #2: Keep the momentum flowing by focusing on practice, not perfection. What matters much more than precise measures is how people feel about measuring. When they feel more confident and engaged in measuring, then the choice of measures will improve a little further down the road.
Tip #3: Forget consultation. Instead, schedule meetings or mini workshops for people to circle around a table and have a real dialogue about what matters enough to measure. Unprecidented buy-in is the great reward you'll get for your trouble.
Tip #4: Remember that it takes time to clearly define how each measure should be implemented. It takes time to find where the data is, to set up new data collection processes, to extract data from systems, and to analyse it. Technology can make it faster and easier, but it can still only do what it's told.
Tip #5: Let it be iterative. You won't get a complete and perfect set of measures first time through. Practice, not perfection. Did I say that already? Hmm - it must be important.

Performance measurement, done properly, is transformative. But getting to that place where you are doing it well is a transformation in itself. Allow time for people to move through that transformation.

#2 Four Keys to Cascading Company KPIs to Individuals

2008-07-17T14:01:00.000-07:00

If safety, customer loyalty, cost reduction and innovation are important goals for the company, does that mean they are important goals for EVERYONE in the company? Should personal scorecards be "mini-me" versions of the corporate scorecard?

Consider safety. If reducing lost time injuries is a corporate goal, imagine what it would be like if everyone had to measure lost time injuries. What sense would that make? Does everyone in the organisation have the same impact on or exposure to lost time injuries? Is it the best use of everyone's time to work to improve safety? Of course not.

Rather than over-simplifying the KPI cascading process, follow these four keys to make sure that what gets measured at the individual level is meaningful to the individual at the same time as having a strong "line of sight" to corporate goals:

Key #1: Don't cascade by duplicating the measure, cascade by building the cause-effect chain.

If a corporate goal is loyal customers, then ask "what makes customers loyal?" to determine the first level of cascading. You might end up with things like attracting more ideal customers, keeping promises to customers, and solving customers real problems. Cascade to the next level (say, teams), ask "what makes it possible to attract more ideal customers?". Keep this line of questioning until you reach individuals and their contribution to the cause-effect chain.

Key #2: Only cascade to where it counts, to where there is highest leverage to achieve the corporate goal.

Only a few parts of the organisation will truly have a worthwhile impact on a corporate goal. Operations generally has the biggest impact on safety and timely delivery, for example. Marketing generally has the biggest impact on which customers you attract. Keep asking "where is the greatest leverage?"

Key #3: Document the cascading cause-effect links, to build a map or story of the organisation's strategy.

It will make it easier to test the logic of cause-effect, and to communicate throughout the organisation what matters and why. Maps bring everything together, so you can see the whole, not just the parts. And you can start seeing something more than the cascading - you can see the collaboration!

Key #4: Involve people in the process of determing their "line of sight" to corporate goals.

We find the most meaning in things we take part in discovering and creating. People throughout your organisation will not only have the best idea of how they contribute to company goals, but they will also have many times better buy-in if they take part in the cascading process.

#1 Seven Comebacks to "That's no measurable!"

2008-07-07T14:36:00.000-07:00

Admit it - you've uttered these words yourself at some point, when you were faced with a goal or result that was rather intangible or fluffy and no measure immediately came to mind for it:

"It's not measurable!"

And then you move onto the next goal to see if that's easier to measure. But don't give up so soon! I face this challenge with almost every client I work with. The problem is not that their goal is not measurable - it's that the language they've used to express their goal is not specific enough.

So when someone tells me something's not measurable, here are seven of my favourite retorts:

1. If that goal were happening now, what would be different?
2. How would you know if you've reached that goal or not?
3. How would anyone else be convinced whether or not you've reached this goal?
4. Imagine you've already reached that goal - what would you be looking at to convince you of this?
5. What exactly is this goal trying to change or improve?
6. What problem is this goal going to solve or fix?
7. If you don't have this goal, are your or others going to miss out on?

Now you've got some more productive alternatives to giving up, next time you here those words, "That's not measurable!"