“What gets measured gets done”
If you watch any sport on television these days (or the IBM adds linked to the Rugby World Cup) you could be forgiven for thinking a degree in statistics, or having a calculator to hand may be useful. It doesn’t matter whether it is the percentage of aces served, or number of first serves in, how much time a team has been in procession of the ball, or what part of the field they have spent most time in; you will probably find yourself with plenty of data to consider. The key thing is – do you think this adds to your viewing experience?
Your answer may vary depending on the quality of data you have been given and how interested you really are in the sport you are watching. I find it very useful when I feel my team are not really playing well and get some good insight into which aspects of the game is letting them down (England rugby – take notes). It’s also great when you are winning and can clearly see how you are dominating the opposition.
Vital performance measurement
So, with all this great evidence available about how useful good performance data is, you might expect businesses to know exactly how their business is performing at any given moment. If only. Many managers and business owners find it difficult to know what to measure and how to identify the key metrics. It will be different for each business, but there is a good simple starting place.
Where is your focus of measurement?
Put simply, you have two key areas to focus your business performance measures; Results and Effort. Results measure the end results of your efforts.
Results are really what you are trying to achieve. Examples of result areas might be net profit, return on capital, customer satisfaction, staff turnover, cost reductions, productivity increases. They are the sort of measures that form key performance indicators for many businesses and can be challenging to measure, depending on the sophistication of the management data available.
Effort measures are frequently task type measure or activity levels. They are measuring the input side of the equation. Examples of effort measures might be introducing a new process, number of sales calls made, how many customer complaints are handled in a set period. They are useful to get a sense of how much effort is being made, but give little or no information about the real business value added by the effort.
Whilst this may appear to be a major over simplification, the real test comes when you assess the focus and balance of your performance measurement. For many managers, the effort side of the equation is much easier and more tangible to measure. Frequently, the balance of measurement is skewed in favour of effort. Objectives agreed with staff at annual appraisals are a dead giveaway about the measurement focus. Even for management level staff they are often heavily effort based. At the end of the period it is easy to ‘tick off’ as done a long list of activities. Sadly, there may be little or no discussion about the success or value added by the activity. I regularly meet people who are working very hard, work long hours and feel very worthy, and yet are potentially adding little value to the business. Luckily, they and their manager are blissfully unaware of this fact so all is well!
Take action now.
How is performance managed in your business?
What is the balance of your result and effort measures?
How can you get your people more focused on effective performance measures?
If you need help improving your performance management contact us and tell us more
or CALL 0845 2177 071
Engaging trainer, facilitator, coach, and presenter. Pioneer of socially responsible learning. Cause Related Learning provides high impact, high emotion learning experiences and challenges that motivate, improve communication, challenge thinking and inspire people to make a difference.
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