Metrics – They’re only good if you use them

 

Peter Drucker’s famous quote, “What gets measured gets managed” has been a mantra for process improvement folks (like me) for years.  How can you possibly know you have made an impact unless you can measure it with some metric?  Organizations spend lots of time and effort to determine and gather these metrics (which is why my preferred method when approaching a process improvement activity is to try to use metrics that are already being tracked to measure impact).  We can debate whether or not the metrics selected appropriately measure the process we are analyzing, and the differences between correlation and cause and effect, but I digress.  The assumption we’ll go with is that we have selected the proper metric.

Great!  Now we have a metric.  We measure it.  We track it.  We put it on pretty graphs.  But do we ever use it?  We can collect mountains of data faster than ever before, but unless we use it, why bother?  Data can only become information if it is used.   But let’s take this a step further.  The data must be used to become information, and it must be shared with others.  Too often, a department collects data, then, in their mind, make decisions with it (turned it into information for them), but they do not share it with others impacted by the process or the decisions.  This creates huge waste in organizations.

Here’s an example:

A couple of weeks ago, at a client meeting, the following story was shared.  The client, a director at a large organization, was in a meeting with several other directors and they were discussing the organizations change management process.  The manager over this process made the statement, “Changes take too long to get implemented, we need to fix this.”  So, our director left the meeting concerned about the changes her group was putting through, and determined to fix it.  After spending several hours talking with her team, she was struggling to see how her group was delaying the process.  She then went to the manager of the change management process to get more information.  The response was, “Oh, you’re changes aren’t the problem, they usually only take 15 minutes or so, it’s another department.”  Our director left, first relieved, then frustrated.  She had just wasted 4 – 5 hours trying to fix a problem that wasn’t a problem – pure waste.  The rationale she was ultimately given was, “We didn’t want to single anyone out in the meeting.”

Sure, the manager could have shared the data in very vindictive and accusatory way, attempting to completely embarrass and humiliate the director of the area that was causing the problem; seen it done – very nasty.  OR, the manager could have presented the data in a way that would encourage an ad hoc brainstorming session to help identify and improve the problem; seen it done – very nice.  But to choose not to present it to the group, then wonder why the problem doesn’t improve – mindboggling.  Who wants to bet the director of the area that is the issue has no idea they are the issue?

Yes, metrics are important (the right metrics, of course).  Just make sure if you are going to take the time to collect them, you use them and share them in a way so your organization can improve. 

Let me know your thoughts!

 

Glenn Whitfield

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One Response to Metrics – They’re only good if you use them

  1. Andrew Meyer says:

    Glenn,

    I agree with you, what is measured is managed and what is managed has a way of improving. As someone who came out of the heavily Ed Deming influenced world of Industrial Engineering, I’ve had that drilled into me and struggled to find ways to implement it. With my company, I think I’ve found a way.

    We essentially do technology based BPR, but rather than charging a fixed or hourly fee, we agree on a metric and then split the improvement. In some cases, like cost savings for printing and UPS, the split is 50-50. In other cases, like improving aging accounts receivable, the split is 90/10 (we get the 10, sniff…sniff)

    The contracts ensure that we are aligned with our customers in achieving measured goals. Our alignment and focus on metrics ensures that certain things are enforced over periods of time. It allows business owners to focus systems around achieving ROI quickly and maintaining constance of purpose, for many reasons our contracts are fairly long term.

    When I hear your story about the director spending 4-5 hours fixing a problem that wasn’t a problem, I remember why I left the corporate world, that feeling of arranging deck chairs on a titanic.

    The time has come again for tracking and improving productivity through metrics. The last 15-20 years were really about new marketplaces, growing opportunities and land grabs. There’s no place for productivity improvement, metric measurement or better operations in that environment. But that time has passed. For the next 10 years, success will be measured by improved productivity and cost control. Understanding, refining, measuring, acting upon and improving metrics will make you successful. A little fear and a few examples of corporate Titanics will go along way towards removing some of the politeness that prevents projects being eliminated or succeeding.

    The world is changing.

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