Recognizing good performance is challenging without the right metrics in place.
Do you have measures for things that are important?
The first step to building a high-performance culture is to make sure you have measures for things that are important. It should be obvious, but your measures need to align with your business strategy, your departmental strategies, and the personal goals of your team members. Make sure that each measure is challenging but achievable and that it can be measured.
If you are not aligned in this way, you will find yourself working on things that don’t matter. have been in meetings where we didn’t agree on what was important or what our focus should be as an organization. We would spend hours talking about inconsequential items while ignoring real problems. This can be frustrating when you’re trying to move the needle and keep everyone focused on winning!
All too often we talk to Senior Leaders who are crystal-clear on the objectives for the next 12-24 months, yet when we review the KPIs and metrics at middle-management and the frontline they rarely align with the organizations’ strategic goals.
Are the measures easy to track?
One way to tell if you have good performance measures is to ask yourself, “Can I easily track the measure?” What’s an easy metric? You don’t need a lot of time or skill. Basically, anyone can measure it. For example, with a time study, you simply count the number of times someone performs an action in a specified period and average that number over the period to get a rate. The task doesn’t require expertise; anyone can do it.
What makes something hard to track? The measurement requires specialized skills or equipment (such as statistical analysis), takes too much time, or is too expensive. For example, measuring employee understanding of product functions would be hard to track because you’d need surveys and people with experience analyzing survey data. But using production rates as performance measures is easy: just keep your eye on the clock as each employee completes a single unit of work and average that over the day. Thankfully there are now out-of-the box-solutions that can establish consistent performance metrics, provide intelligent insight to all layers of your organization and at the fraction of the cost it would take to build internally.*
*- Spoiler alert: It’s Bramble.
Are you using the right units?
The next time you’re evaluating performance, make sure that you’re using the right units. You might be surprised at just how much a difference it makes to your ability to correctly evaluate the data. But if you can remember your apples from your oranges, then you should have no trouble getting the most out of your measurements.
Do you know what changes will make a difference?
The first question you need to answer is: what exactly do you want to change? This can be a difficult question, so let’s break it down.
- What are the drivers for the change? This could be customer demand, competitive pressure, industry impact or something else.
- What are the goals for the change? Will this change save time and money? Will it improve quality? Will it increase customer satisfaction or engagement?
- What does success look like? How will you know if you have achieved your goals and objectives?
- What is the impact on the people involved? There may not always be an easy answer here. Just because a process works well now doesn’t mean that people will welcome a new plan with open arms. Change can be scary and people may resist it. On the flip side, there could be employees who are ready for a challenge and see this as an opportunity to learn something new and prove their worth to their organization. You should take both good and bad reactions into account when planning for change management.
- What is the impact on the organization? How will this project affect your company’s bottom line, its reputation or its organizational structure in general?
- What is the impact on your client base (internal or external)? Are benefits being passed along to those using your product/service?"
Are you measuring an outcome or a process?
The first step to improving your business’s processes is to identify which of them are causing the problem. The easiest way to do this is by separating the “process” from the “outcome.”
The outcome is a business’s final result, what it produces or delivers in exchange for money. It can be easy to measure because of its simplicity, but it’s hard to change because of its complexity. For example, if you want to build a house and you’re hiring all the workers and managing everything yourself, the outcome would be whether or not your house gets built on time. That’s a pretty simple thing to measure! But there are many small things that have to go right for this outcome—are all of your workers doing their jobs properly? Are all of them showing up on time? Are you talking with them about their work as much as you should? Your outcome depends upon many different steps in the process.
The process is all of those individual tasks that make up an outcome. Processes can be difficult things to measure and improve because they are made up of so many pieces. If your company wants to produce more revenue quickly, it might consider lowering prices or running extra advertisements—these changes will adjust how much money comes in at month-end, but they will not change the actual processes that make up revenue generation.
Is the performance project-based, people-based, or task-based?
We’ve all heard the saying “measure twice, cut once.” It’s great advice for woodworkers and stonemasons—but what about for measuring performance?
To understand why it’s important to measure performance properly, you first need to consider whether your organization is a project-based one (i.e. you measure the performance of a project team), a people-based one (i.e. you measure the individual or group of people performing tasks), or a task-based one (i.e. you measure the task itself). You also need to decide how best to assess performance: is it through an annual review, ongoing feedback loops, or something else?
The choice of measurement can affect your culture in profound ways because it will determine what type of behavior gets rewarded, and who gets rewarded for it. For example, if you are measured on revenue generation per person per hour, then that becomes your focus; if revenue isn’t generated at that rate, no amount of time spent strategizing will make up for it. On the other hand, if revenue generation is measured based on projects completed by teams and not each individual member within those teams, then you can see how competition between employees could be reduced in favor of collaboration toward common goals instead.
Are people able to go fast when they can and slow down when they need to?
If you use the wrong units, you might get an answer that’s impossible. For instance, if you measure the speed of your vehicle in inches per second and want to know how long it will take to get somewhere a mile away, here’s your math:
12 inches/foot * 5,280 feet/mile = 63,360 inches/mile
63,360 inches/mile / 1 inch/second = 63,360 seconds (17.6 hours)
Often overlooked - the unit of measurement is a key component of establishing good performance metrics.
But wait a minute! If your car is going one inch per second—which is about as fast as someone can crawl—it would take days to get anywhere at all! That’s obviously not possible. What went wrong? You used the wrong units for measuring speed (inches per second instead of miles per hour). If you don’t use the right units for measuring performance, then your performance measures won’t be meaningful either.
You need to be sure you’re measuring the right things.
This is something that is easy to forget, but ensuring you have the right measures in place will ensure you’re able to answer the question “How well did we do?” effectively and quickly. These measures are not only easy to measure, but also become an integral part of how your organization’s performance is measured.
If this is a challenge you’re looking to tackle, come have a chat with us and we’ll go deeper on solutions. We also have some interesting content here around creating a culture of sustainable continuous improvement.