Metrics_ How to Improve Key Business Results - Martin Klubeck [123]
Standards and benchmarks, in the realm of metrics, are strongly interconnected. Standards, from the Industrial Age through today, are invaluable for providing a means for interoperability. Standards in the industrial world allow you to use a light bulb that you bought at Walmart in a lamp that you bought at a high-end designer furniture store. Standards allow you to get gas for your car from any station in the United States, without worrying if the gas pump nozzle will fit into your gas tank. From the ingredients label on a can of soup to the technology that allows you to tune your radio, standards give consistency and interoperability for manufacturers, distributors, builders, and customers alike.
Unlike the manufacturing industry, performance measures are more akin to an art than a science. The use of standards for how we measure things for improvement is arguable. What need is there? If our questions are unique, and thus our answers are unique, why do we need standards for our measures?
Since I advocate creating measures to answer your specific questions, I have trouble taking up the other side of the debate. Why indeed?
I would love to have standards for how you develop metrics; as in the use of expectations over targets, for example. Or for the definition of the data owner. But, standards for performance measures as a whole? Why?
Before I answer this question, let's look at benchmarks and why I think the two are interrelated.
Benchmarks: Best Used to Provide Meaningful Comparisons
Benchmarks are best used to provide meaningful comparisons for your metrics. Outside of defining expectations, you usually want to know how well you perform against your peers. If you're ambitious, you'll want to know how well you perform compared to the best—the best in your industry, the best in your country and, perhaps if you're really ambitious, the best in the world.
Benchmarks are a blessing and a curse.
Benchmarks are also useful for drawing a “line in the sand.” You can establish a baseline from your own measures so that you can compare your present performance to your past performance. This is critical when your goal is to improve.
Establish Baselines
One of my joys when working with clients on metrics is helping them establish a baseline; mostly because it forces them to put the metrics upfront in their improvement-process thinking. I almost always run into goals to improve effectiveness, improve efficiency, improve productivity, or improve customer satisfaction.
“Improve” is a lousy verb to use in a goal statement. You have to qualify it with more information—as in “how much” of an improvement? By a certain percentage? By a certain number?
My favorite recollection of the poor use of an “improve” goal was in my parish council. I was hoping to bring organizational development expertise to the council. I was teamed with a retired police officer, a successful business owner, a nurse, our priest, and a retired grandmother. The goal? Improve membership in the church. I wasn't perturbed because I had seen this type of goal (increase, decrease, etc.) many times before.
I said, “Improve membership—by how much?”
“What do you mean?” asked the ex-police officer.
“I mean, if it's our goal to improve membership, how will we know that we achieved it?”
The business owner said, “Oh, you're trying to get us to set a goal.”
I countered, “I thought that was the intention—to come up with goals for the year?”
“Yes,” said the business owner, “but you're trying to set us up for failure. We'll set a number and if we don't reach it, we will have failed.”
Now I sat in stunned silence. I may have actually opened and closed my mouth once or twice. “Uh. Well. Would you be happy with just one more family joining?”
“Sure,” said the nurse.
“Anything more than that is gravy!” said the ex-police officer.
I turned to the priest, still in shock. “You'll feel we've achieved this goal if we add just one family?”
He shook his head no. As the leader of the team, and our parish, his input carried the equivalent weight of a CEO.
“How many families