Around this time of year, it is not uncommon to see clients challenging and refining the metrics that they will use to evaluate performance as the year progresses. Actually, it is quite a timely and productive exercise to go through, as many of us have just come out of our year-end planning cycles where a number of our goals and objectives may have been modified from previous planning cycles. And while one might argue that metrics should be an outgrowth of the planning cycle itself, we all know how often those processes get short circuited. So doing a quick inventory of our business metrics is always a healthy practice to get into.
In talking with one of my clients last week, we got into a fairly lengthy discussion about the value of having measures that don’t change very often. In his view, certain measures at his company were in fact “getting stale” and were hard to do anything meaningful with from a motivational or incentive standpoint because they really lacked any interesting “movement” from a reporting standpoint. Was he doing harm by keeping them on his scorecard? Was it time to bring some more “interesting” or “challenging” metrics to the table?
Anytime I get a question like this, I try and go back to asking how well their metrics line up with “where value is created” within their business…a sometimes obvious and trite, but often very valuable question. Going through a challenge like this can reveal a lot about where changes might be necessary. A few things to consider along these lines:
– Most of the time, the measure itself is not what has gotten “stale”, but rather the target against which you judge success. I had a client recently tell me that his target for a particular metric was to “improve” or “get better” year on year. Quite frankly, I believe this is a clear recipe for lackluster improvement. Most sports teams that have achieved greatness (consistently) usually started with some pretty bold and specific turnaround or improvement aspirations. Resetting the bar with a healthy dose of ambition can really bring life back into what might appear to be a stale set of business metrics.
– Sometimes, its not the measure or the target that is the problem, but rather how the measure is positioned. Simple metrics such as safety incidents, outage statistics, etc… can look stale especially since success is evaluated based on the “absence” of something happening. Simply changing the way the metric is positioned, however, can have a huge impact on visibility and motivational value. Repositioning these metrics into things like “days since last incident”, “near misses”, “time between failures” can turn a sleepy metric into something that grabs more attention.
– Some measures, however are meant to fade into the background over time. From time to time, we add metrics to the scorecard because of a problem that needs fixing. A good example of this is in corporate services functions where things like “help desk response times”, “recruiting cycle times”, etc. have become the centerpieces of their metric reporting. In fact, most of these areas have gone so “cycle time happy” that, while I’m not sure anything is getting done, I am certain its getting done FAST! Sure, these metrics were born because at some point in the past, I’m sure cycle times in the associated areas were really, really bad!!! But at some point, you need to acknowledge when a gap has been closed and put a metric into what I’ll call “maintenance mode”. It might not have to “go away” altogether, but perhaps it should fade into the background a bit so that a new source of value can gain visibility and be exploited. A good example of this is how many call centers have decreased the importance of things like speed of answer and abandon rates, and have put more emphasis on the role reps can play in shifting customer behaviors and service channels utilized.
– and yes, there are times, where the metrics we use are simply crappy metrics, and while they may have made sense at the beginning, they either no longer motivate the right behaviors, or worse, incentivize the wrong ones. Don’t be afraid to trash some metrics periodically so that you don’t end up creating layers of dead weight in your scorecard and Performance Management activities.
So if you are one of those managers in the throws of self reflection, happy hunting. Just make sure you go through the process a little more deliberately and methodically so that you don’t end up throwing the proverbial “baby out with the bathwater” (which incidentally is a metaphor that I hope is not based any real history!!!).
Seriously, the key is to ALWAYS TO MAKE SURE THE METRICS YOU USE MATCH UP WITH HOW YOUR FUNCTION, BUSINESS UNIT, OR COMPANY INTENDS TO BUILD VALUE FROM ITS EFFORTS during the current planning and reporting cycle.
Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at firstname.lastname@example.org