How to Develop Sound Measures

How to Develop Sound Measures

By Geary Rummler and Alan Brache

Performance—that is, output—should be measured at all three levels (Organization, Process, Job/Performer).

Follow this sequence when developing your metrics at the different levels:

  1. Identify the most significant outputs of the organization, process, or job. ...
  2. Identify the critical dimensions of performance for each of these outputs. Critical dimensions of quality include accuracy, ease of use, novelty, reliability, ease of repair, and appearance. Critical dimensions of productivity include quantity, rate, and timeliness. Critical dimensions of cost include labor, materials, and overhead.
  3. Derive critical dimensions from the needs of the internal and external customers who receive the outputs and from the financial needs of the business.
  4. Develop the measures for each critical dimension. For example, if “ease of use” has been identified as a critical dimension of quality for a given output, one or more measures should answer this question: “What indicators will tell us if our customers find our product or service (output) easy to use?”
  5. Define goals, or standards, for each measure. A goal is a specific level of performance expectation. For example, if a measure for ease of use is “number of customer questions/complaints regarding product use,” a goal may be “no more than two questions/complaints per month.” As continuous improvement efforts bear fruit, goals should become more ambitious ...