Performance Measurements - Are You Using Them?


 

“If you're not keeping score, you're only practicing, not playing.”

     Vince Lombardi

 

In case you’re wondering, Vince Lombardi left his mark as the former head coach for the Green Bay Packers, an American Football team during the 1960’s.

 

Lombardi is an often quoted figure from American history, known for his edgy, hard-nosed, paternalistic style and relentless pursuit of victory that has inspired coaching philosophy, books, movies and management theses.

 

So turning that statement on its head, what would happen if we stopped keeping score at sporting events? How would we know who was winning and who is ploughing through the field on the last day of the Open Golf? Keeping score at sports events makes it way more interesting than having no score at all! What about the general business community, do they keep score? Would it make for a different and interesting working dynamic if that was to become the norm?

 

What about bringing a competitive element to business? I’ve seen that when some competition is introduced using business matrixes between similar operations, employees start to “chase the numbers” and genuinely look forward to measuring their performance against their peers.  

 

The quote “if you’re not measuring it you’re not managing it”, which brings the concept of performance measurement closer to home for the business community, is well understood.

 

Linking to that, there are plenty of indicators that could be applied to business, some standard financial and others that are specific to industry. All have a purpose to indicate the direction and performance of what it is that’s being measured, and to show where a business is going. To be effective, indicators have to be S.M.A.R.T. (Specific, Measurable, Attainable, Realistic and Time bound) and you need to know how, through your role, you can positively affect these indicators for the better.

 

Even if it’s not a requirement, I would suggest that it would be advantageous to familiarize yourself with Key Performance Indicators (KPI’s) for as variety of reasons:

·         You may hear these terms used frequently in your organisation.

·         You want to understand how your organisation defines the determinants of success.

·         Knowing how the indicators work helps how your function will help your organization achieve its goals.

·         It’s always good to know your company’s KPI’s and have an understanding of how they work together.

 

Across the greater business, no department should be excused from having its own KPI’s. Human Resources, Purchasing and Warehousing, by way of example, all have some value proposition, or business critical function, that they serve. Start by looking at these and see where KPI’s can be developed to support the businesses objectives and how they can be used to improve business performance. I’m also a fan of ‘not doing something well that should not be done at all’ (Peter Drucker), so be careful in what you measure!

 

One lesson learnt that needs to be passed on is ‘there is no greater disservice a company’s management team can do than to have a suite of KPI’s that are difficult to collate’. Creating a monster administration task is a sure fire way of to make the whole initiative fail.

 

When developing KPI’s keep in mind the S.M.A.R.T. acronym, start small and build as interest migrates into adoption and the whole process of having KPI’s becomes fully adopted by the organisation. Trying to start with a big bang and a measure all approach to a KPI initiative is a big ask. Don’t do it.

 

Get your measurement system right, it really can drive performance.

 

 

Stan Shaw.JPG

Contributed by Stan Shaw, Senior Client Partner at Breakthrough Management Group