“What gets measured gets done” … or so the old cliché goes. Although there is some truth to this adage, we sometimes see companies, work groups, teams, etc., fall short of their objectives, even though they have specific measures in place. The principle reason for this is that these groups typically look at measurement as a statistic, or a stand alone number, rather than as a system or a process. Viewing (and designing) measurement as a system is a requirement for continued organizational improvement. Designing a good measurement system does not have to be complex; although it should be comprehensive. Following are some general guidelines for designing a measurement system.

1. Use a representative “mix of measures”

– A mix that reflects the people, processes, and environment for the company or group. Consider the basic priority issue areas for every company – operations, customers, business development, finance, strategy, people and leadership – and then determine which areas should be tracked and measured to ensure planned results.

2. Clarify the purpose of each measure.

Ask – what will this data help us improve, what else do we want to improve, does everyone understand the purpose of this measure?

3. Specifically define the metrics.

Determine what data, what numbers, where do we get it, how do we get it.

4. Determine frequency of the measures.

Ask – how much data provides a meaningful “picture” of reality; how much data do we need to take action?

5. Establish an administrative process.

Determine how the measures will be conducted, collected, and compiled. How will they be reported, posted, distributed? Should they be summarized? Are there any confidentiality issues?

6. Establish a results management process.

Determine how the measures will be used for improvement. Who discusses them, what is the forum for discussion, how do we plan, communicate, and take action if required?

7. Introduce a comprehensive measurement system gradually.

If the mix of measures is great, more than a half-dozen or so, it may be easier for all to understand the measures if they are phased in at two or three at a time.

8. Keep it simple.

Report measures in their most easily understood format. A summary bar graph or trend chart may be much more meaningful than columns and pages of raw data. Building a simple and well “mixed” measurement system will help improve organization performance. It provides information, not just data, needed for decision making.

© 2004 Sigma Resource Group, Inc. You are encouraged to share the contents with others with appropriate attribution. Mark Akerley is President of Sigma Resource Group, a strategic growth and executive development firm assisting business owners, entrepreneurs and executive teams achieve their goals, contact Mark.