Performance measures are needed by all managers, in public as well as private sectors, to steer them towards taking the right action in the right places at the right time
They should answer such big questions as:
- Is my team/ unit on course or not – if not, how far off – are we standing into danger?
- Are we doing better than before – if not, why not – if so, how much better?
- Are we ahead of others we’re competing against or seeking to emulate – if not, why not – if so, by how much?
- Where and what do I need to change, if anything – by how much to get to where I need to be – better still, to where I’d like to be?
- Did any changes made work – fully, partially or not at all – why so – what else should be tried?
Managers who cannot answer such questions are like naval officers on the bridge, happily steaming along at full speed yet actually lost in a fog of ignorance with no idea about possible hazards (and opportunities) that lie ahead
Sadly, many managers find themselves in just this situation – they’re extremely busy, work long hours, but spend most of their time firefighting – hence, they’re surprised when ‘events’ hit them
To avoid this, others measure anything and everything within their purview, regardless of value to them – they end up creating a fog of information instead which is just as useless and dangerous as having no information at all
Still others decide many key performance areas are too difficult to measure, so they don’t try – what matters is what’s measured‘ becomes their mantra – major pieces of their performance big picture are thus missing – looming rocks, reefs or shallows go unseen
Yet all such risk could be avoided if every manager was equipped with some basic navigation tools equivalent to those used at sea
In particular, they need a set of cardinal (i.e. most important) performance measures providing them with regular fixes on their current position, distances apart, progress to date and ETAs viz:
- A maximum 10 performance measures specific to their unit covering all major inputs, outputs and outcomes – one all inclusive measure is never good enough, over 10 is more than enough – and having financial measures alone constrains managers to navigate solely by looking at their wake which has its limitations
- Each measure clearly defined and understood by all in the team
- Linkages between each measure in their set and with those of other managers also understood so measure owners are aware of likely knock-on effects from changing one measure at the expense of another
- And each measure should be available ‘in good time’ for action to be taken if necessary – there’s no point being weeks, months, even years late as found with many government statistics on offer
The overall message, therefore, is managers should measure what they need to do their jobs well, but only that i.e. measure what matters to them, not what they can
Sadly, that is not the case at present in many organisations – hence, it’s little wonder that the average lifespan of a company in the S&P index is said to be little more than 10 years