Undocumented Features

UF Postings Past: You Are What You Eat - Measuring Productivity Effectively

November 25, 2007 – 11:42 pm

You are what you eat. In a similar fashion, you manage what you measure. The performance figures you collect on a daily basis are, essentially, what you eat at work. You spend time on it, it is easy to reference, and therefore it is the easiest information you receive each day that you can act on. Naturally, this will tend to bubble to the top of your management tools, no matter how you don’t mean for it to do so.

This natural tendency in management affects your business in a number of ways:

1) If you are paying attention to the reports coming in, you will tend to react immediately to any bad numbers that come in. You will trace down the core reason and try to solve that problem.

2) Your employees will worry about the numbers that they present you. They will believe that if the numbers are bad, you will be upset. This leads them to do things like make decisions based on how they will affect the numbers rather than how they will affect the business.

3) If your managers are asking you for the numbers you are collecting, you will tend to worry about the numbers rather than the business as well. If you don’t, you will after the first time that your manager comes into your department on a fact-finding mission over why the numbers are bad.

As listed above, one of the themes of collecting performance figures of any type is that they can lead you to make decisions based on the numbers rather than the business situation. Collecting performance figures is a valuable tool for determining how well you, your department, and/or your business is doing, but it is dangerous. It can lead you to make decisions for the wrong reasons. Ways to avoid this are:

1) Be sure you are measuring the right things. Don’t worry as much about things that aren’t at the core of what you want to manage.

2) Be sure that you keep the numbers in perspective. If a given number is bad, why is it bad? Is the reason behind it a good thing or a bad thing?

Remember above all this thing: performance measurements are for setting off alarms. An alarm is a signal to check on things. It does not mean the end of the world. Always manage by what’s behind the numbers, not the face value.

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