You’re walking down the hallway and one of your co-workers approaches. As you pass each other, you both offer the common pleasantry of “How are you?”, or in the famous words of Joseph Francis “Joey” Tribbiani, Jr., “Heyyy..How you doin’?”. Of course in most cases we don’t give an honest answer to this question. We simply offer a passing “Fine” or “OK” and continue on. This could be because:
- There is too much going on to accurately and concisely explain
- We aren’t sure how to answer the question
- We don’t really care to answer – we were just trying to be cordial
Unfortunately, this same reasoning can trickle into the Performance Management process at organizations as well.
Why this is Dangerous
In our corporate world, our processes drive everything we do. Nothing happens in your company that cannot be traced back to a process. Even the simplest tasks such as answering the phone or opening the door has a process. It’s very important that we not just understand that we have a process and how it works, but that we know that process is being performed correctly.
Suppose you were not feeling well and went to the doctor. They asked how you were feeling but you provided the cordial “Fine” response. How likely is that doctor to accurately diagnose you without the correct data points? It is likely that you will not be diagnosed at all, or worse, misdiagnosed and provided with the incorrect prescription. A treatment that may do more harm than good.
The same line of thought can be applied to Performance Management. If our processes are not measured, it is not likely that we will know something is going wrong until it is actually broken. If they are measured, but we are not capturing the correct data, we still have the risk of not knowing something is wrong, but also possibly misdiagnosing the issue and increasing the probability of causing more damage.
What to Measure
Every process exists for a reason. The question to answer first is “Why?” – why does this process exist? Why is it important? Once we know the answer to those two seemingly simple questions, we will be able to figure out “How” and “What” to measure. Now we just have to figure out where the data is.
Most organizations run at either end of the extremes with data. They either claim to have NO data, or they suffer with trying to decipher “Big Data”. It is important to understand, that while we might have data for everything, that doesn’t mean we need to measure EVERY thing. In our scenario before with the doctor, there are a lot of data points captured. The patient’s vitals, symptoms, tests performed, time to be seen by a doctor, time to diagnose, insured, not insured, the list goes on and on.
But which of these data points are actually the most important for our health? The problem in many organizations is they are not measuring what truly matters. Sure, they have lots of data. It may even look pretty and impressive. For example, the doctor’s office may have:
Average Wait Time: 3 minutes
Average Diagnosis Time: 5 minutes
However, if I am the Chief Medical Officer, those numbers mean very little to me. It is great that we see people fast. But, how will that information truly help me understand an increase in doctor misdiagnosis rates or operating costs. TRUE Performance Management focuses on the “Small Data” that is meaningful. This “Small Data” can be defined and represented by traditional KPIs (Key Performance Indicators) that define and measure what is important for the success of the business.
Let me ask you, “How you doin’?”. Are you capturing data for data’s sake? Are you measuring and providing information to key decision makers based on “Big” or “Small” data? The bottom line is, Performance Management only becomes meaningful and relevant in the context of business success, and must be properly measured by KPIs that truly measure what’s important. It does not matter if you prefer raw data displayed in tabular form, or if you prefer pretty pictures, graphs, and charts.
What is important is that the right information is displayed and understood by the parties that truly need to know, and that the data is relevant to the decisions they have to make. Performance Management, when done right, using KPIs that matter, will help measure the success of both the process and the company.