Dont Let Your Measurements Mislead You

Don't Let Your Measurements Mislead You

There aren't too many words that can strike as much fear and loathing into the hearts of your internal customers, and sometimes your own employees as the words "Operational Measurements". Operational Measurements often get a bad rap because of their misuse by well intended, but misinformed management. And it's easy for your employees to view Operational Measurements as some kind of cheap trick to force more work out of them as you constantly try and force more and more production from your team. Meanwhile, your sales team thinks that you will use Operational Measurements to cloud the issue of customer satisfaction by pointing to your "great numbers" while leaving the customer very unhappy.

The truth is that you cannot succeed in managing an operational organization without the proper measurements in place. Any attempt to run an organization without them is doomed to failure because you will lack the fundamental information required to manage your business. Coach Dave is a strong believer in Operational Measurements because he knows that the right measurements, taken in a consistent fashion will allow you to continuously improve the performance of the organization and the company.

Yep, Operational Measurements are good. . . . except of course, when they are bad.

In simple terms, Operational Measurements are progress meters that can tell you how well, or how poorly your group is performing. The key to successful Operational Measurements is to make sure that you are managing and measuring your key processes. It all starts with your departmental or company objectives. You should have 2 to 3 major objectives, depending upon the size and scope of your organization. The key is to focus on whatever it is that you are really being asked to deliver on, and then set up your objectives, and Operational Measurements in a way that can tell you if you are succeeding or not. If your objective is production based (i.e. produce 50 widgets per month) then make sure that your measurements track the number of widgets produced. If your measurement is time based (i.e. complete widgets within 10 days of receipt) then once again, make sure that your measurement tracks to the objective. You would be surprised how easy it is to create measurements that sound important, but have nothing to do with your stated objectives. For example, if you goal is to paint 10 houses each month a metric that tracks how many brushes you use may sound important for cost control purposes, but it really has nothing to do with the objective. By focusing on the number of brushes you use, you may actually impede your ability to complete the goal of 10 houses. Ensuring that your objectives and measurements are in synch will keep you and your department focused on the prize.

Once you have your key measurements in place, you can start to look for a pattern in the results. If you are not able to meet your objectives, the question has to become "why". It could be a variety of factors from bad inputs, to bad processes, to bad people. To determine where the problem is, break out your measurements in that area to each key step in the process. As you examine those results it will become more apparent that "step 5" takes up 80% of the processing time. Then you can focus on reducing the time spent on that step. One other key factor to account for as you measure your process steps is "wait time". "Wait time" doesn't always manifest itself clearly in reporting, so spend the time to analyze how many handoffs exist in your process and ask yourself and your staff if some of those handoffs can be eliminated through combing functions, training, etc. It is simply amazing the amount of time lost in a process due to the "wait time" while an order is sent from one person to the next. Reducing the "wait time" can dramatically improve your results.

In a nutshell, that's why you need to have good, clean Operational Measurements in place.

Many of the things you can count, don't count.

Many of the things you can't count, really count.  - Albert Einstein

Any time your organization receives some kind of a work order from a customer (internal or external) adds value to it, and then either completes it or passes it along to another organization, you qualify as an Operational Organization. As an Operational Organization you need to have solid measurements in place to measure, validate, and eventually improve your own internal processes.

But there is a downside to Operational Measurements as well. The downsides can take many forms, but the most common are when you start to measure everything that you do, simply because you can. Also, when your measurements rather than your customers, begin to drive how you do business.

Are you counting the right things? The right way? Are you counting so many things that counting them has turned into your primary business? Are you helping your customers, or hurting them?

That's the difference between good Operational Measurements, and bad ones.

When Operational Measurements Go Bad:

When you first implement your Operational Measurements, you will spend a lot of time analyzing, improving, and tweaking them. The painstaking process of developing and implementing the right measurements requires a lot of time up front. But that time is time well invested to make sure your measurements are complete, accurate, and in synch with your organizational objectives. You must spend the necessary hours making sure that your Operational Measurements track to your objectives, that they provide a consistent measurements, and that they are at the appropriate level of detail to allow you to identify weaknesses in your operation, and implement improvements. But, when you find yourself counting things because you can, or you begin adding measurements that do not relate to your objectives that's the first sign of trouble. Also, when your Operational Measurements become the sole driver in your organization, that's a pretty good sign that you've turned the corner and are headed down the wrong path.

Remember, not everything that counts, can be counted. And just because you can count it, doesn't mean you should count it.

Let's use the example we previously discussed of a house painter. For our purposes here, this is a big house painting company with multiple crews who do different types of painting. At the start of the year the decision is made to set a new objective for your crew. You are now being asked to paint 13 houses per month with the same size crew, up from just 10 last year. You sit down with your crew and begin to look for ways to improve productivity. You make the necessary changes to your team or process and then set out to accomplish your new goal. Your changes are effective and productivity improves and you start reaching your new goal.

Then, a funny thing happens.

You get a memo from your boss that goes something like this.

"The bean counters tell me that your paint brush usage is up 15% above last year. Every dollar counts, so I'm putting together a special task force to cut the number of paintbrushes being used. We need to reduce our paint brush usage to 10% below last years level within 30 days."

And . . . . we're off . . . . this is what I sometimes refer to as "The Operational Measurement Shuffle".

What is the Operational Measurements Shuffle? It's a dance that management sometimes does where we lose focus on our objectives and instead start dancing with a lot of extraneous information that may LOOK important, but really isn't. Sometimes it's not entirely clear when the Operational Measurements Shuffle actually begins. But if you pay attention, you'll see the dance by the end of the first chorus.

We're now going to start counting things (paintbrush usage) that has nothing to do with our objectives, but that looks important to someone else far away. Notice that the boss didn't ask you to explain why paintbrush usage was up, nor did he look at the cost/benefit of paintbrush usage versus revenue, he just told you to reduce the usage. You can expect this new measurement to be followed by new measurements of the painters' hats being used, the amount of thinner being used, and questions about the number of rungs required on the ladders. And lastly he blamed the "bean counters". The uninformed always blame the bean counters.

At first glance you might think that it's ok to wonder about the paintbrush usage. And it is. But there is a difference between asking a question, and putting in new measurements to track them. For example, a smart boss would have called and asked about the increase in the number of paintbrushes being used. Your response might have been something like this.

"That's right. Our paintbrush usage is up. In order to meet our goals for the year (13 houses per month) we made a change from regular paintbrushes to disposable paintbrushes. The new brushes cost 30% less than the old ones, plus we save on turpentine, and clean up time at the end of each day. So our paintbrush usage is up, but our costs are flat or down."

With a good boss, that will end the discussion. You've answered the questions, explained the variance, and shown that there is just cause for the increase.

But a bad boss will not listen at all, or will just pretend to listen and then suggest new measurements on paintbrush usage. With a bad boss the fact that there is a valid reason for the increase in paintbrush usage is not really relevant. Paintbrush usage is up, and it must be reduced. For a bad boss, it's as simple as that.

If you have learned how to manage your boss, then maybe you can convince them that the measurements are not relevant by showing how they don't relate to and can even detract from your objectives. But some bosses are so enamored with measurements that they can't tell a good measurement from a bad one.

The long and short of this discussion is simple. If your measurements are clearly in support of your objectives, you are most likely on the right track. If your measurements have wandered from the objectives, no longer support your customers, or even put you at odds with your objectives, it's time to take a step back and rethink your measurements.

After all, who are we to argue with Einstein

David Meyer, owner of Coaching for Tomorrow, has more than 25 years of management and leadership experience, having worked for companies such as Nobil Shoes, McDonough, Allied Stores, MCI and Nextel Communications.  His mantra, "You Win With People" is based on the deep-seated belief that hiring, developing, and promoting the right people can lead to organizational and financial success.  As a management and leadership coach, David works to instill that same passion in his clients by helping them understand the importance of strong leadership, strong teamwork, and strong players.

David has a Bachelor's in Business Administration from Elmhurst College and has been certified by both ACTION International as a Business Coach and the Coach Training Alliance.  He also has received his CTM from Toastmasters.  He is an Officer in the Denver Coach Federation and a facilitator/trainer for the Coach Training Alliance and ACTION International of Colorado.

Married with two adult daughters, David is active in his local Kiwanis club and Crossroads Community Church.  He enjoys reading, golf, scuba diving, and Civil War reenacting.

www.coachingfortomorrow.com