Performance Measures and Learning LO12186

John Zavacki (
Sat, 25 Jan 1997 06:31:28 -0500

Replying to LO12168 --

Ethan J. Mings <>, Replying to LO12140 --

> I often wonder if managers really understand the linkage between systems,
> measures and generating results? Just an outloud questions.

Even "enlightened" organizations could use some help on this one. Metrics
are established to gauge performance to customer requirements, stakeholder
requirements, standards, award criteria, business plans, strategic plans,
and more. As the system changes, some of these metrics become
counter-productive. That is, they consume resources to produce
information which is of no value to the organization.

Metrics have a way of becoming sacred cows. The Baldrige Award is an
example of a set of metrics that recognizes that changes in the
environment require new metrics in the organization. The award criteria
are very different now than they were in 1984.

The notion of "productivity" is a meta-metric which has many meanings to
an organization. It can be measured in units/time, budget/actual,
sales/labor hour, etc. In an agile organization, it may even be
irrelevant and counter-productive itself. One organization I knew used an
old IBM model for performance reviews, borrowed from Big Blue at a time
when they were 80% of the organization's business. The model was old and
hadn't been used at IBM in years and didn't fit the realities of the
little organization it was being used in. No one knew why it was being
used, but thought it must be a wonderful thing, because it came from IBM.

There's no simple algorithm for deciding when a change has effected a need
for redesigning metrics, but they should be a part of the planning process
at all levels of activity, macro, micro, and meta.

John Zavacki
The Wolff Group

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