Measurement Answers the Question: Are Your Strategy and Processes Working?

November 3, 2008 | by Deborah Bigelow Crawford

Without proper performance measurement, there's no way to know. That's why we need to measure performance. Yet the question persists:  Does the cost of measurement pay for the value?  My response is a classic one … it depends.  It depends on who's asking you to measure…and why?

For example, if you feel that your process is not working and want to validate a new one, then yes, by all means … measure your performance!  You need to remember, though, a measurement program takes commitment, resources, and time. First, you have to know what to measure and always keep in front of you WHY you are measuring…what your objectives are, and what you are going to do with the information once obtained. Then, assuming you have the support and the resources, you’ll need a measurement model to be consistent in the planning, collection, and analysis of your measures.

Developing Performance Measures

While there is general agreement that “you can’t manage what you can’t measure,” the actual measurements themselves can prove to be a source of conflict. What will you measure and why? What’s the connection between the performance measures we collect regarding individuals and their tasks and the ultimate performance of the company—if any?

Measures are the easy part—knowing what you want to measure, and why, is hard.  Therefore, following a structured process helps to develop less fuzzy measures, while engaging a wide variety of the people who actually do the work in the process prevents the chosen measures from diverging too far from reality or ease-of-use.

There is no single set of measures that universally applies to all companies. The appropriate set of measures depends on the organization’s strategy, technology, and the particular industry and environment in which they compete. Like any aspect of any “living company,” measures cannot be static: they cannot be chosen once and locked into place. Along with strategy, they evolve and are refined as the organization becomes more focused on and skilled at meeting strategic goals.

Again, if you commit to a measurement program, you will need to have appropriate sponsorship and know what your ultimate objectives are; you’ll need a model to begin implementing. The PEMARI model (Planning; Establishing Measures; Measuring; Analyzing; Reporting, Improving) has proven to work well in dozens of organizations. (This model is discussed in more detail in our white paper here.)

Pilot your program using this model.  Show success and value to the organization, and then expand the program to a larger audience.  Performance measurement can transform your organization and reap huge rewards when done properly.  Basically, I’m an advocate.  My only advice is, don’t start it if you can’t finish it.  And, if it is a politically sensitive area, bring in external staff to facilitate so that there is no perception of an “agenda” from the stakeholders or senior management.

What have been your experiences--good and bad--with implementing measurement programs?

About the Author

Deborah Bigelow Crawford

Deborah Bigelow Crawford has more than 20 years of experience in business management and handles the operational and administrative functions of PM Solutions. Ms. Bigelow Crawford also serves as President of the PM College®, PM Solutions' training division, where she is responsible for the fiscal management and quality assurance of all training and professional development programs. Prior to joining PM Solutions, she served as the Executive Director of the Project Management Institute (PMI), and was instrumental in providing the foundation and infrastructure for the exponential growth that the Institute has maintained over the last 10 years. In addition, she served as the Executive Director of the PMI Educational Foundation. Over the last decade, she has authored numerous articles in PM Network, Chief Project Officer, and Optimize magazines. Ms. Bigelow Crawford is also co-author of the book Project Management Essentials. She has presented a variety of papers as a speaker at international symposia and conferences, and is a member of the National Association of Female Executives and the Project Management Institute.

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10 Comments on Measurement Answers the Question: Are Your Strategy and Processes Working?

Jeannette Cabanis-Brewin says:

Great post, Debbie. I recall when Jim Pennypacker was first “test-driving” our Value Measurement System at various companies, he shared with me how amazed he was to find that even large, successful companies had very little in the way of baseline measurements in place. Answering the question “have we improved?” was impossible lacking the knowledge of what the starting point had been.
Yet—I just want to underline what you’ve said above about being careful WHAT you choose to measure, since metrics drive workplace behaviors, and measuring the wrong things can be more harmful than blissful ignorance. Any metric that, when measured, would not drive workplace behaviors that are in tune with organizational mission or strategy is a mistake, and can even be catastrophic ... my prime example is of a state human services agency that set up a metric for success in child protective services that rewarded number of cases closed. This caused workers to close cases, no matter what ... not a behavior likely to serve the mission of protecting children.
Any other examples of misfiring measures out there?

Posted on November 18, 2008 at 4:43 pm

Debbie Bigelow Crawford says:

I actually use an example in the Meausuring Performance workshop which seems to ring true to many organizations.  A call center started a measuring program and what they used to measure the success of the program was the amount of calls they could get in an hour.  Unfortunately, this caused them to hang up quickly and not really provide the services they were originally chartered to do!!  They increased their number of calls per hour but lowered their quality ratings as well as follow-on sales, which was another goal, but takes time on the phone to explore.  As I mentioned earlier, an organization has to really think through WHAT they are measuring and WHY…and understand what some potential impacts might be once you get started!

Posted on November 19, 2008 at 11:43 am

Karen RJ White says:

Here’s one from the world of software development, where lines of code used to be a standard metric. Some very astute programmers realized they could
create
a
lot
of
lines
like
this
smile

Karen

Posted on November 28, 2008 at 10:03 pm

Jeannette Cabanis-Brewin says:

That’s a perfect example, Karen.
A recent conversation with my daughter while she was studying for the GRE pointed out to me that most Americans are easily bamboozled by statistical information because statistics isn’t a part of the ordinary high-school education (or even college, for many majors). I never took it until graduate school, myself—and I was a journalism major! Considering how we are awash in statistics at work and in the news, this is hindering us, I think. And, I think it plays a role in the difficulty businesses have in creating, and getting buy-in to, metrics programs.

Posted on December 13, 2008 at 8:49 am

Charles Johnson says:

Another interesting scenario occurs when measurements can be open-ended.  Fresh out of college I ran into this with our maintenance section.  They got their performance bonus based on %of jobs completed in under 90 days.  In researching my new duties, I found a number of requests over 120 days.  When I inquired as to when they’d be done, I was told, basically never.  Once a job was over 90 days old, it didn’t matter how old it got.  To get the jobs completed I had to cancel them and resubmit them.  They were worked immediately because “material had already come in for them”.  The new job was easily completed in under 90 days and helped offset the old one that went over 90.  Needless to say, they got their bonus every year.

Posted on December 15, 2008 at 9:37 am

Paul Lombard says:

Debbie
  One of the lessons I have learned working with a large client is that they have had marketing folks leading projects for as long as anyone can remember. However, a shocking event occurred five years ago, the performance of the company dropped dramatically. As part of the review process to understand why, the company learned the following;
1. The marketing people were not rewarded for the project work they were leading they were rewarded for the marketing work they did. As a result, a measurement of the time they dedicated to different parts of their work showed that they tended to avoid project work and focus on the things that yielded rewards.
2. Project effectiveness measures were “marketing and commercialization based” in other words, did the product get to the market and there were no project process effectiveness measures.
3. When they compared their project results against a new acquisitions project results they were shocked to see that projects were delivered more effectively be EVERY measure. The acquisitions rates for innovation, time to market, on time delivery, etc. were substantially better. This realization has caused them to engage us to help them develop a competency of project managers who will lead multi functional teams (including the marketing folks) to deliver innovative products, faster, and more efficiently. One aspect of our work is to help them identify the measures that matter which are substantially different from what they have measured previously. I agree with you that what matters gets measured, and I would extend that to say, Does what we are measuring really matter in terms of what we are trying to do?

Posted on December 31, 2008 at 11:10 am

Paul Lombard says:

Debbie and Measurement team
  How do you see the current economic circumstances affecting organizational measurement approaches?

  Thanks

  Paul

Posted on February 20, 2009 at 9:37 am

Debbie Bigelow Crawford says:

Absolutely what we are measuring really matters in terms of what we are trying to do!  That’s one thing I try to reinforce                     “always keep in front of you WHY you are measuring…what your objectives are, and what you are going to do with the information once obtained”        in the second paragraph of this article.

Posted on February 20, 2009 at 11:21 am

Debbie Bigelow Crawford says:

Paul, With regards to your question as to how the current economic circumstances will affect organizational measurement approaches….my answer is immensely!!  The ARRA (American Recovery and Reassessment Act) REQUIRES strict accountability.  More and more companies need to show Value in the use of their budget dollars.  You can’t get to value without starting with performance measurement.  Value is actually the cumulative performance change. What we will all need to do is to convert that value into dollars.

Posted on March 9, 2009 at 3:03 pm

Debbie Bigelow Crawford says:

I’m curious as to how far reaching this requirement of measuring performance and value is permeating our corporate world?  Are those of you in the corporate space being required to show value?  ARe you strategizing to show value to “defend” your role/position within your organization?  Have you found support in your organization to take measuring performance on?

Measurement takes time and committment but does provide a ton of value for decision making.  I’m curious to how many of you are doing it?  And what kind of obstacles…or rewards…are you finding?

Posted on March 26, 2009 at 10:07 am

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