How to find the right measures is the most asked question in the field of performance measurement. And it’s little wonder, because the more meaningful measures track outcomes which tend to be less tangible than the traditional things we’ve measured, like how many widgets we produced.
How do you translate results so intangible as employee morale or service quality or corporate image into solid, robust measures?
The framework described here is an excerpt of the How-to Kit: How to Design Meaningful KPIs, which provides a systematic approach for taking almost all of the pain out of the challenge of finding the right measures.
STEP 1: Begin with the end in mind.
Performance measures are objective comparisons that provide evidence of an important performance outcome. It is of the utmost importance to decide which outcomes are most worth tracking right now. As the first step in deciding how to measure an outcome, write down what the outcome is, what the difference is you are trying to create (and thus want to track using a measure). Focus on one outcome at a time.
STEP 2: Be sensory specific.
When you have the end in mind, you are ready to get a handle on what specifically about your outcome you will measure. This is where you take care in your choice of words to describe the outcome as concretely as possible. Use “sensory” language – the language that describes what you and others would see, hear, feel, do, taste or smell if your outcome was happening now. Avoid those inert words that we so often see in our goal and objective statements, such as: efficient, effective, reliable, sustainable and quality.
STEP 3: Check the bigger picture.
Check the bigger picture for what could happen if you measure your outcome. What level of control do you have over achieving it? What might the unintended consequences of measuring the outcome be (both the positive and the negative)? What behaviour would the KPI drive? Which other areas of performance might be sabotaged or limited? This is your first chance to change your mind about what’s most worth measuring.
STEP 4: What’s the evidence?
Now, get ultra specific and figure out what the potential measures are that could let you (and everyone else) know that the outcome is being achieved. For each of your sensory rich statements from step 2, what could you track to tell you the extent to which it is occurring? Use KPI Library to find potential measures to add to your list. Which of these potential measures would be the optimal balance between objectivity and feasibility?
STEP 5: Name the measure.
Naming your performance metrics marks the point at which you know exactly what you will be measuring. Be succinct and informative and deliberate, as you need to be able to continually and easily identify each measure as it moves through the steps of being brought to life and being used in decision making.
Create your own measure design template based on these 5 steps (or save time and use mine, which includes examples and more detailed instructions, in the How-to Kit: How to Design Meaningful Performance Measures, at http://www.staceybarr.com/howtokitP1002.html). Now use your measure design template to start designing measures for the tricky goals and objectives and results and outcomes you’ve struggled to measure thus far. Practice makes perfect!
About the Author:
Stacey Barr is a specialist in organisational performance measurement, helping corporate planners, business analysts and performance measurement officers confidently facilitate their organisation to create and use meaningful performance measures with lots of buy-in. Sign up for Stacey’s free email tips at www.staceybarr.com/202tipsKPI.html and receive a complimentary copy of her renowned e-book “202 Tips for Performance Measurement”.