Metrics Matter

There are many ways to improve productivity and performance - via technology, process change, culture change and so on.  But with each one, we need to measure the success (or otherwise) of our initiative to understand what works in our organisation.

We need to identify which metrics are the most important for determining efficiency.and the most appropriate for our particular project.

When selecting the right operational metrics for your company, ask yourself which of the below is most important at the present time, and work from there:

• Productivity
• Operational costs
• Employee engagement
• Product quality
• Customer satisfaction

You should try and balance leading and lagging indicators so that you know what has happened, what is happening, and what should happen in the future.

We should be looking at the performance of our employees - as individuals and as teams … and here we might need both hard (from production records) and soft data (from appraisals).

Financial metrics are often important - what is happening to labour costs, running costs, overheads? … as are quality metrics (Error rates, customer complaints).  These can be supported or clarified with customer satisfaction and customer retention/repeat business metrics.

Employee satisfaction scores (for retention, absenteeism, satisfaction) are another dimension appropriate for specific projects.

You also have to remember that measurement costs money so try to use data already collected for other purposes.

Pick a 'basket of measures' that do not concentrate too much on any one dimension.  For example concentrating on throughput at the expense of quality.

With a comprehensive, balanced  data-driven approach to performance measurement, your organisation can make meaningful process improvements to lower costs, reduce waste, and improve productivity and profits.  The metrics you choose help signal intent, show progress and demonstrate success.