I’ve been gratified to see so many people engaging around the topic of metrics. Yet, I know from experience that when you start advocating for a measurement program, there are always a few skeptics who view it as just more process and overhead. That’s why I wanted to share today some links to brief case studies we’ve done with a few of our consulting clients.

You see, one of the things we promise in each and every client proposal is that we will care enough about their success to measure the impact of the work we do. So it’s exciting to see that promise making a difference. For example, a targeted mentoring program established at Merchants Insurance Group resulted, among other value-adds, in one program realizing 758% revenue growth in the first two months of introduction. In another case, helping a manufacturing company to complete a new factory on schedule helped the company to begin realizing profits seven months ahead of schedule. Not only that, but 400 new jobs were created by the project.

With job creation as a primary focus of the American Recovery and Reinvestment Act, it seems to me that the need for project discipline, and smart performance tracking, has never been greater. Not only the public agencies who are now receiving the funds, but the contractors and vendors who carry out the work are being called on to plan realistically, execute efficiently, and show by the numbers that they’ve succeeded.

Without proper performance measurement, there’s no way to know. That’s why we need to measure performance. Yet the question persists:  Does the cost of measurement pay for the value?  My response is a classic one … it depends.  It depends on who’s asking you to measure…and why?

For example, if you feel that your process is not working and want to validate a new one, then yes, by all means … measure your performance!  You need to remember, though, a measurement program takes commitment, resources, and time. First, you have to know what to measure and always keep in front of you WHY you are measuring…what your objectives are, and what you are going to do with the information once obtained. Then, assuming you have the support and the resources, you’ll need a measurement model to be consistent in the planning, collection, and analysis of your measures.

Developing Performance Measures
While there is general agreement that “you can’t manage what you can’t measure,” the actual measurements themselves can prove to be a source of conflict. What will you measure and why? What’s the connection between the performance measures we collect regarding individuals and their tasks and the ultimate performance of the company—if any?

Measures are the easy part—knowing what you want to measure, and why, is hard.  Therefore, following a structured process helps to develop less fuzzy measures, while engaging a wide variety of the people who actually do the work in the process prevents the chosen measures from diverging too far from reality or ease-of-use.

There is no single set of measures that universally applies to all companies. The appropriate set of measures depends on the organization’s strategy, technology, and the particular industry and environment in which they compete. Like any aspect of any “living company,” measures cannot be static: they cannot be chosen once and locked into place. Along with strategy, they evolve and are refined as the organization becomes more focused on and skilled at meeting strategic goals.

Again, if you commit to a measurement program, you will need to have appropriate sponsorship and know what your ultimate objectives are; you’ll need a model to begin implementing. The PEMARI model (Planning; Establishing Measures; Measuring; Analyzing; Reporting, Improving) has proven to work well in dozens of organizations. (This model is discussed in more detail in our white paper here.)

Pilot your program using this model.  Show success and value to the organization, and then expand the program to a larger audience.  Performance measurement can transform your organization and reap huge rewards when done properly.  Basically, I’m an advocate.  My only advice is, don’t start it if you can’t finish it.  And, if it is a politically sensitive area, bring in external staff to facilitate so that there is no perception of an “agenda” from the stakeholders or senior management.

What have been your experiences–good and bad–with implementing measurement programs?