You’ve likely heard the expression, “What get’s measured, gets managed.”
And yet, if you pay attention to the wrong metrics or measurements, it can distract both management and employees from desired behaviors.
Metrics provide management with the key information needed to make decisions and assess performance in the business. Paying attention to the wrong metrics or confusing people with too many metrics can cause undesirable actions that actually work against the very goals you are trying to reach in the business.
Consider lean manufacturing as an example. Achieving lean can be in contradiction with the typical ways you measure efficiency. Lean is about reducing waste and making product in lock-step with customer demand. Old metrics might encourage a production manager to run excess product in order to drive down unit cost when that product will end up in the warehouse tying up working capital. Instead you want the production manager to figure out how to run smaller and smaller batch sizes to avoid work-in-process inventory.
It can be confusing enough for employees to understand what is expected of them without adding to the confusion with measures that incentify them to do the opposite of what senior management really wants.
If you are measuring so many things that no one can figure out the really important metrics, it might be time to stop measuring certain elements.
If there is no time to manage all the things you measure, why measure them?
Putting it Into Action
- Based on where you are trying to take your organization, decide which metrics will provide the feedback you need to make better decisions.
- Consider the value of some measurements – what does it cost to track that information and what decisions get made from it?
- Consider the unintended consequences that might be created by paying attention to certain metrics.