Put your metrics on a diet

The New Year is upon us. Many people make New Year’s resolutions to diet and lose weight and to get more exercise. Perhaps it’s time to look at how you’re measuring performance and put your metrics on a diet. Whether it’s internal operational performance or external supplier performance, metrics require time and resources to create and monitor. And, their usefulness depends on taking action.

Dr. Pietro Micheli, in his recent article in Industry Week, “The Seven Myths of Performance Management“, describes some of the challenges of performance metrics. This article affirms much of what I’ve been saying over the years. I’ve written previously about how supplier performance metrics work best and why they fail. Besides lack of alignment with overall corporate goals and strategies, which Dr. Micheli emphasizes, sometimes the sheer volume of performance metrics ensures that they are in practicality unusable by human beings. In order to look diligent and in control, managers go for quantity of metrics over quality and meaningfulness. Measuring and monitoring performance are not  equivalent to improving performance.

While there may be some initial performance bounce that often occurs from the act of measuring, it’s not sustainable. With all of the effort and resources that typically go into developing performance measurement systems, many companies have little improvement to show for them, particularly in areas most important to the company. They have the form, but not the substance. It’s more than coming up with a cool-looking scorecard.

Time to take stock of your performance management system, whether it’s internal or supplier-oriented. It might be time to put your metrics on a diet to make them agile … and more meaningful.

-Sherry R. Gordon




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