"How do I measure thee? Let me count the ways..."
Satisfying your Appetite
Selecting meaningful performance measures and associated Key Performance Indicators (KPI) often has me thinking of the spacial metaphors used by Elizabeth Barrett Browning, one of the most prominent poets of the Victorian era in her poem "How do I love thee? Let me count the ways..." If only measures and KPIs could be defined using spacial metaphors - but then again why can't they?
Organizations often struggle with what to measure and how to measure performance, forgetting to ask themselves and their customers what they define as "success." The all too familiar term Return on Investment (ROI) blinds leaders with the notion that success can only be measured in terms of monetary savings. Savings can be achieved in different ways depending on the type of organization you are operating and its size, and often times starting with the goal of hard dollar savings may prove to be much more challenging given the cultural barriers that also must be overcome.
For the time being lets keep the focus on the topic of measuring success. Considering these challenges and the varying size, scope, and industry focus of organizations, there are different size measuring cups that should not be forgotten along with there key ingredients that will help an organization and its leaders achieve an outcome that will satisfy both the appetite of their organization and external customer alike.
The Key Standard Ingredients
Measuring cup/Ingredient 1: pinch of satisfaction; How satisfied are the employees within the business? The performance of your organization starts and ends with the skilled resources you hire, enable, grow/develop. Their ability to grow, and feel valued translates into satisfaction and performance that drives the outputs of the business ultimately delivering a client impact or outcome.
Measuring cup/Ingredient 2: dash of processes; Are your processes documented and mapped down to the activity level to allow for monitoring end-to-end value streams including opportunities for improvement based on cost, schedule, quality related drivers of success and performance? Processes provide tactical level measures that enable the workforce to deliver the outputs to its customers on time or ahead of schedule, for a cost that the customer is willing to pay for and that can be achieved by the business, at or below the customer cost, and lastly is delivered with a repeatable and reproducible level of quality each time/for each completed transaction.
Measuring cup/Ingredient 3: splash of customer satisfaction; Is the level of satisfaction and performance you are obtaining from your employees in the business directly translating into the clients satisfaction? A clients feedback and input is key to seasoning your dish just right - a happy client will always return for more, and refer others that grows your business. If your processes and workforce aligned to these processes are not cooked to the right temperature - you increase the risk to the business of meeting its objectives while also failing to meet the needs of your client. The end result could end up costing the business more as a result of poor quality, rework, additional labor hours, customer losses, over processing/redundancy, et al.
Measuring cup/Ingredient 4: sprinkle of mission and financial performance; Have you linked your employee, process, and customer measures to the objectives and financial performance of the organization? Once ingredients 1-3 are in place, the 4th ingredient is the finishing touch. Whether you operate in public sector (Mission based culture) or private sector (Revenue based culture), the final linkage demonstrating how your organization defines success can be achieved based on the measures and results of the previous ingredients, that need to be in place for the batter to stick together. Mission objectives must be linked to customer, process, and employee measures. Furthermore, financial success can be measured as a function of how effective your organization delivered against its objectives given the budget allocated or as a direct result of costs avoided and saved that either increased the number of customers/outputs delivered or reduced/avoided the cost to the business for delivering outputs to the customer, thereby increasing either the number of outputs and/or profit margins.
Tasting Success
Every organization/institution brings its own unique set of operational challenges to the table, and just like baking a cake require a certain set of key standard ingredients regardless of the type of cake they are trying to bake. Now I'm no chef or cooking expert, but I can follow a process and steps much like a recipe to get to results. If leaders use these ingredients to guide their organizational measurement approach, they will find themselves not only with the cake they wanted to bake to satisfy their appetites, but eating it to; and the entire organization fully standing behind them ready to bake more as part of delivering high quality outcomes to a retained and growing customer base.
So if you are seeking relevant performance measures and meaningful KPIs, simply start with these ingredients. As always, please share your views and let me know what your thoughts are. Does this make sense? Do you agree or not?
