The Three Keys of Good Measurement

You can’t manage what you don’t measure. It’s a commonly accepted maxim. However, while measurement is useful, it is understanding that’s important. “You can’t manage what you don’t understand,” would be a wiser saying. Of course, understanding needs to be informed by measurement in many cases but it requires much more than measurement. If you want measurement to enable you understand your business, the following guidelines are key:

1. Be Selective

Measurement can be wasteful – just because you can measure something doesn’t mean you should. The best organizations are selective in what they measure. You should only measure what is both important and meaningful. If you can change something, then measuring it is meaningful. If it’s something important then it might be worth measuring. In all other cases, you should not invest the time and resources to measure it.

2. Be Careful

Measurement influences behaviour so be careful – you get what you measure. This is why measures introduced to improve productivity in call centres have become the stuff of legend. Wanting to measure efficiency, call counts and measures of call duration were introduced, resulting in many unhappy customers whose calls were answered only to have the person hang up a second later without even talking.

Measurement can also introduce fear – which impacts motivation, productivity, and innovation – and which also skews data, making it unreliable. For example, most businesses would like to have reliable customer feedback as it is important strategic information. However, if staff feel customer complaint data is used punitively, then it’s a challenge for the business to get reliable data. To combat this, only measure to gain an understanding of performance and ensure that everyone is aware of this.

3. Be Holistic

All too often when measures show an organization is not performing as well as desired, management address the issue by changing people, not the strategy or the process. While sometimes this may be the correct course of action, strategy and process should always be evaluated before action is taken. Acting to improve performance before understanding the cause of the performance, almost always makes things worse. To facilitate understanding, differentiate between “process performance” and “people performance”.

Keeping these guidelines in mind, it is possible to have measurement support understanding and to avoid some of the pitfalls that can be associated with poorly thought-out measurement systems.