In Metrics, the Devil is in the Details

Benchmarking can be useful when deciding where to start on a journey of improvement. For example, it is sometimes possible to gather exemplary practices and helpful methodology to apply to one’s own need for improvement from a personal development plan to a sophisticated manufacturing operation. 

It is important, however, to fully understand the measures to which you are comparing yourself and to recognize the limitations of how benchmarks can be used. Benchmarks can lead to conclusions that are not supported by underlying variations in data, scope and complexity, as well as variations in process, measurement and flow, some of which may or may not render opportunities for improvement. However, you can also move beyond the benchmarks and exceed your original goal. The changes could not just impact process in a positive way, but also company culture.

Understand the metric, then move the metric. Although this basic premise seems obvious, it may not be as easy as it looks depending on the nature of the metric, the quality (and quantity) of the data underlying the measure, and the consistency of methodology over time.  

Consider the following steps to start thinking about metrics: 

1. Understand how you are measured
2. Understand how your behavior moves the metric
3. Behave in such a way as to move the metric in the desired direction

Each of the above steps are actions, however, please note the following as you start to think of the metric you want to measure: • It is possible to measure things that may not be relevant.

• It is very difficult to make something better if you do not measure it, but you have to fully understand the metric before you can behave in a way that moves the metric. 
• When you do not measure what is important, what you do measure becomes important.
• Sometimes you use the data you have because you have it. But if you use the data you have, rather than the data you need, you may not get the outcomes you expect.
• Although you cannot manage what you do not measure, be careful that your measurements might emphasize certain measures over equally important but unmeasured activities.
• You can experiment with metrics to see if they actually reflect your desired performance.
• Just because the data suggests what behaviors need to occur to move the metric, one needs to be cognizant of organizational will and functional ability to change.  

Randy Yust is the Chief Financial Officer of Beyond Benchmarks, an operations analytics and process improvement consulting business based in Indianapolis specializing in healthcare, manufacturing and company culture.