A good metric must be measurable, easy, and economical to capture and store.
- Companies have all sorts of questions. Who's the best employee? Which segments of the industry are likely to grow? Which cars are the most reliable? In each of these cases, a company probably uses a metric or multiple metrics to try and answer the question. The bigger question is: how do we develop a metric? Perhaps two of the most basic things to consider in developing a metric are, is the metric measurable? And, if it is measurable, how would the data be gathered? In some cases, these two things are easy.
Let's take a simple example. Let's try and figure out, who is our fastest runner? Our metric will be the person's speed in a 50 meter sprint. Is this measurable? It is, simple, easy, no problem, right? But, let's consider, how would the time be tracked? Another human with a stopwatch? When and where will the reading be taken? What happens if there's an error in measurement? Does the runner get one or more attempts? Does the runner's fastest, slowest, average, or median attempt get recorded? How many times per year is this metric tracked for each runner, and what happens if there are 25,000 runners? Measuring can be expensive, and one single measurement may not be enough, but having more than one measurement could bring about conflict, and, obtrusive measurements, measuring in a strange environment, can provide results that are not 100% realistic.
Plus we have to ask ourselves, was it really important to know everyone's exact speed? What will we do with this data? Are we just going to make a list, or do we plan on using the data to get better outcomes in the future? So many times, we measure without ever really considering the value of the metric. That was an easy example. The speed of a runner. How about if we want to find our friendliest customer service representative? How do you measure friendly? It's tough isn't it? Because you and I may have a very different idea of what friendly is.
Tone of voice, words used, compliments, saying thank you, greeting the customer, wishing them well. You may think some of those things indicate friendly, but perhaps, to some people, they just seem like fake attempts to win your confidence. Perhaps you're in a hurry. You don't want friendly, you just want fast service. Are these measurements of being friendly being done by the company, or the people that matter, the customer? Suppose our company could decide what friendly encompassed.
How do we measure it? Do we pay a person to listen to every phone call, and listen for the greeting, the number of thank yous, the compliments given, the tone of voice used. That sounds expensive, and my guess is that some of those measurements would be tough to make. How do we judge what is and is not a compliment? Plus, we get back to the issue of just how important is being friendly? What do we do if someone is measured to be not friendly? Coming up with things to measure, that's easy.
But understanding what can be measured, how it will be measured, and what type of impact that measurement might have, that is what's required to be a real leader in the world of performance measurement.
- Metrics and human behavior
- Common corporate errors in measuring
- Developing a good metric
- Using the performance measurement tune-up
- Avoiding redundancy
- Using dashboards, infographics, and other data visualization tools