Most of us have heard some version of the standard performance measurement clichés – “what gets measured gets done, if you don‘t measure results, you can‘t tell success from failure and thus you can‘t claim or reward success or avoid unintentionally rewarding failure, if you can‘t recognize success, you can‘t learn from it; if you can‘t recognize failure, you can‘t correct it, “if you can‘t measure it, you can neither manage it nor improve it”, but what eludes many of us is the easy path to identifying truly strategic measurements without falling back on things that are easier to measure such as input, project or operational process measurements.
Performance measures quantitatively tell us something important about our products, services, and the processes that produce them. They are a tool to help us understand, manage, and improve what our organizations do. Performance measures let us know –
- How well we are doing
- If we are meeting our goals
- If our customers are satisfied
- If our processes are in statistical control
- If and where improvements are necessary
Team performance measures monitor the implementation and effectiveness of an organization’s strategies, determine the gap between actual and targeted performance and determine organization effectiveness and operational efficiency.
Good Performance Measures –
- Provide a way to see if our strategy is working
- Focus employees’ attention on what matters most to success
- Allow measurement of accomplishments, not just of the work that is performed
- Provide a common language for communication
- Are explicitly defined in terms of owner, unit of measure, collection frequency, data quality, expected value (targets), and thresholds
- Are valid, to ensure measurement of the right things
- Are verifiable, to ensure data collection accuracy
Most performance measures can be grouped into one of the following six general categories. However, certain organizations may develop their own categories as appropriate depending on the organization’s mission –
- Effectiveness – A process characteristic indicating the degree to which the process output (work product) conforms to requirements. (Are we doing the right things?)
- Efficiency – A process characteristic indicating the degree to which the process produces the required output at minimum resource cost. (Are we doing things right?)
- Quality – The degree to which a product or service meets customer requirements and expectations.
- Timeliness – Measures whether a unit of work was done correctly and on time. Criteria must be established to define what constitutes timeliness for a given unit of work. The criterion is usually based on customer requirements.
- Productivity – The value added by the process divided by the value of the labor and capital consumed.
- Safety – Measures the overall health of the organization and the working environment of its employees.
When performance can be measured, it can be improved. Improvement in performance meets a basic human need–we want to become better at what we do and ultimately become high performers. Begin measuring and improving team performance early in the life cycle of the team. Continue the process over the life of the team. Assess on a regular basis, but not too often–the idea is to maximize growth while getting things done.
Methodology (a step-by-step plan)
- Set the stage
- Measure & assess team performance
- Follow up on the assessment
Important Metrics
Strategic Alignment
% of Projects Aligned with Strategic Objectives. The number of projects, or weighted cost of projects, that are aligned with at least one strategic objective over the total of projects.
Operational Efficiency
% Resource Utilization The percentage of time spent on productive activities such as project work, ticket resolution, etc.
Execution
% Increase in Project Success Rate (or % Decrease in Failure Rate). This assumes success is defined not just by time and budget, but by delivering the business requirements (based on satisfaction surveys of the business stakeholders post delivery).
Business Value Delivered
Customer Satisfaction (%) A measure of stakeholder/customer satisfaction of business value delivered based on surveys post-delivery. Business Value Realized.
Business value is realized when the right projects are selected and executed at the right time. Selecting the right projects involves estimating Economic Value Add from a project. This is best if based on actual benefits measurements post-project, but in reality the estimated benefits are simpler to calculate tied back to the project delivery date. This can be measured in cost savings, additional revenue, increased customer satisfaction etc. A standard scoring model can be used to normalize across different benefits, and business value points used to demonstrate value delivered.
