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Performance Measurement

Performance Measurement

For all the questions that keep you up at night...there are answers.

If you are not getting the answers you need...perhaps you need to be asking different questions.

Why aren’t we making money?
Ask . . . What activities are critical to the profitability of this business and how are we performing in these areas?

How can we get our employees to be more productive?
Ask . . . Have we given our employees the tools, training, and information they need to be productive?

How come things never get done right around here?
Ask . . . Is this a recurring problem? Is it a people or process issue?

Why do they always come to me for the answers?
Ask . . . How well are our systems/procedures documented? Do we reward initiative or punish it? Do we act like the "Head Buffalo" or do we let our people lead?

Performance Measurement can close the gap between the questions that keep you up at night and the answers you need to manage your business more effectively. When applied properly, a performance measurement system can take the guesswork and arbitrary decision-making out of managing your business. Armed with better information, you’ll be in a position to make better decisions on a real-time basis.

What is performance measurement?

By its very nature, a performance measurement system provides real-time feedback about key activities that are critical to the company and serve as a predictor of future outcomes. Simply put, performance measures serve as indicators of progress toward specific goals that are critical to the success of your company. Ultimately, performance measures provide better quality information for decision making.

For questions like . . .
Which customers should we be targeting?
What is the most efficient way to reach our ideal customer?
What other products or services could/should we be offering?
Which product/service lines should we be eliminating?
Is there a better way?
and many more.

Performance Measurement is not new or the latest pop fad. It is a fundamental approach to business management. Most companies already manage their day-to-day efforts with some performance measurement data. However, in many cases, their measures are not balanced and/or linked to company goals, key strategies, or compensation.

Depending upon who you talk to you’ll find some commonly used, interchangeable terms relating to performance measurement:

Performance Measures
Business Metrics
Key Performance Indicators
Outcome Measures
Critical Numbers
Activity Measures/Drivers
Critical Performance Indicators
Key Indicators
Critical Indicators
Critical Success Factors

Performance Measurement is often broken down into further distinctions, such as:

Outputs/Results vs. Input
Process information, quality assessment, efficiency or productivity information
Leading vs. Lagging
Value-added vs. Non-value added
Visible vs. Invisible Internal vs. External
Short-term vs. Long-term
Soft vs. Hard
Financial vs. Non-financial
People vs. Process
Global vs. Local

Regardless of the terminology used, proponents of performance measurement tend to share the same common philosophies. Performance Measurement systems should be: Outputs/Results vs. Input.

  1. Linked to primary goals and strategies
  2. Clearly defined and understood
  3. Easily measured
  4. Few in number
  5. Reported regularly
  6. Openly shared
  7. Predictive in nature
  8. Developed by everyone
  9. Linked to compensation
  10. Team/unit-based
  11. Customer Value-added focused
  12. Balanced
  13. Employee Friendly - Tested against behavioral outcomes
  14. Assessed and modified regularly

The bottom line is . . . most companies are data rich and information poor. Our job is to help you sort through the mountain of data to identify measures that are critical to your company. Call us today, and setup a complimentary consultation to discuss how performance measures can help you in your business.

Are you wasting your time?

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