Meaningful Metrics

Talking about metrics never gets old, and as far as I am concerned, we don’t spend adequate time and energy mastering them.I dusted off a old blog post on metrics and updated it for an article about an upcoming keynote at a Regional PMI Chapter. Here it is:

Without exception, every enterprise has metrics and measures. Business metrics first emerged in the early 20th century when Frederick Winslow Taylor wrote “Scientific Management.” He measured the time it took each worker in a steel plant to execute their tasks. He then used this information to conduct motion studies in the hope of increasing productivity. Organizations have been using metrics to understand and improve performance ever since.

Despite its long and storied history, metrics and measures are far from an exact science and many enterprises struggle to master this critical discipline. Too many organizations toil under the lack of performance information while others are buried under mountains of data, much of which is either ignored or unusable.

The fact that metrics and measures often result in useless data is a tragedy in business today. All data, metrics provided or otherwise, is used for the same purpose – to make decisions. All leaders (and arguably those in their charge) provide value to their organizations in the exact same manner, when they make decisions. Decision-making is the essence of accomplishing anything. That is why data is the most valuable asset for every enterprise today, and why meaningful metrics are more critical than ever to realizing success.

Organizations need to remove themselves from under the mountain of data, or from the frustration of the lack of information, and pause to revisit the discipline of metrics and measures and reflect on its purpose.  One of the easiest things an enterprise can do is to test the validity and potential of their metrics by simply asking. “What decision(s) are associated with each metric?” If there is not an obvious answer to this fundamental question, then there is a strong possibility the metric is meaningless. If the associated decision is known, then the attributes of the metric can be tested to determine the potential effectiveness and value of the metric:

  • Important – Reflects the ultimate goals and purpose of the organization
  • Controllable – Is something that employees can directly influence
  • Accurate – Reliably expresses what is being measured
  • Objective – Not subject to dispute
  • Easy – Not burdensome or expensive to obtain
  • Timely – Is available in time to make a difference
  • Comprehensible – Easily communicated and readily understood
  • Harmless – Does not induce dysfunctional behavior

Take a look at any of your metrics and see how they measure up to this list of attributes. The more attributes satisfied, the better the metric. But first and foremost, understand the decisions that must be made in your organization to realize success. Establish metrics that provide the data to make those decisions, and you will have meaningful metrics.

Published: January 21 2011, 03:07 PM
by Steve Romero  @ CA

Article source: CA ITGovernance Blog

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