This is drawn from the work of Michael J. Hammer, the famous Management Guru, - The Seven Deadly Sins of Performance Management and How To Avoid Them in the MIT Sloan Review in 2007.
1. Vanity – Using measures that look that particular organization look good. In a call center, using the Average Handle Time (AHT) metric is a classic example. Excellent AHT measurements may only apply to the Call Center but customers, and prospects may be unsatisfied with their interactions with the call center agents.
2. Provincialism: Organizational Boundaries – This happens often with localized Six Sigma or other process improvement efforts. What if you increased the Order Processing speed in the Order Processing Process. Does this cause orders to be backlogged in production? Suboptimization can happen a lot if an overall picture of the end to end process is not kept in mind.
3.Narcissm: Measuring things from the company’s point of view rather than the customers’. Excellent internal metrics without a Customer Satisfaction Score to balance out internal concerns, is a recipe for kidding ourselves!
4. Laziness: Not placing enough thought into a company’s stage in the industry, strategy and objectives when deciding on what is important to measure. Efficiency measures may be more appropriate for an established company with a huge customer base. Customer delight may be more important for an upstart company that is trying to grab market share.
5. Pettiness: Measuring only a small component of what is important. Many times, measuring some of the things, and not measuring some others, may make the department or function look better.
6. Inanity: Measurement itself produces consequences by way of employee behavior. If you place too much emphasis on Average Handle Time in a call center, and employees are compensated by how they perform on this metric, they will be hanging up the phone quickly just to make this metric look better.
7. Frivolity: Not being serious about measurement itself. Sometimes Process Measurement becomes important only in the context of outsourcing where you need to have some SLAs and measurements in the contract. Many organizations think it is important to measure only in those cases.
So what can an organization do to avoid the seven deadly sins? The author offers four key steps.
- Decide what to measure
Select the right things to measure, those aspects of organizational performance that are both controllable and important to achieving success.
- Measure the right way
Use metrics that capture the essence of what needs to be measured in a usable form.
- Use metrics systematically
Embed the metrics in a disciplined process for performance improvement.
- Create a measurement-friendly culture
The organization must encourage the disciplined use of metrics for ongoing performance improvement rather than regarding them as threats to be feared or opponents to be vanquished.
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