Monday, May 10, 2010

TIP - Measuring Performance the Right Way

Measuring performance can play a vital role in improving your business – but how many times has it caused major problems for you?.

Measuring performance in your business unit can give you lots of information about how close you are to achieving your goals. It can give you real
results as to whether your training, teamwork and other improvement initiatives are getting you the results you really want.

But it can also affect morale, hit team effectiveness and influence quality improvement efforts. Let’s take a look at three ways it could affect your business:

Too myopic:

You may be looking too closely at internal measurements, like IT, HR and how the accounts are going. This often means you are taking your eye off the most important ball:
the customer focus.We should firstly look at what’s important to the customer, through focus groups, surveys and simply talking to them.
Then, the next step is how we structure ourselves to serve the customer needs. Then how do we serve the internal staff who are serving those customers?
We should be measuring our effectiveness in how we offer support to the support functions. Then the internal functions will have the foundations to support the customer.

Take the performance measurement from this angle and it creates greater visibility for your internal staff.

Too much attention to the bottom line:

Everything you’ve done is in the past. The bottom line shows today's consequences of yesterday's actions, but it’s not a reliable forecaster of how today's decisions will affect tomorrow's results.

You can’t turn back time. It’s history. Improvement starts by identifying and measuring the few service or product processes and support systems that have
the biggest impact on your results.
Don’t drive forwards while looking in the rear-view mirror. Let the current results be an indicator of your future strategy. The present creates the future.

It’s not what; it’s how!

Just as important as what's measured is how the information is used. Most companies look at who is at fault rather than what went wrong in the process.
Look closer at how things are completed, how the process is measured, rather than who might be to blame.

Improvement happens by assisting people in your business analyse and improve key processes and support systems.
What the indicators say are much less important than what's being done with the information.

Performance measurements are often used simply to justify managers’ existence in the business. But measurements that don't lead to action are useless and a waste of time.

Measurement is an essential tool for improving your business. But choose the right tools and use them wisely to increase youreffectiveness.

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