Identifying Realistic Metrics for Categories

If ever there were an appropriate place to say "Easier said than done," this is it. Within every category there will Be a number of potentially enticing areas that lend themselves to metrics. Obtaining the right number and focus for this can be a real trick. First, be sure that the metric actually illustrates the catetory, moves in a proper time frame, and does so in a way recognizable to the members of the organization. Second, spend time with what may seem like semantics, but can be powerful shaping devices for ongoing growth of the organization.

Besides simply operationalizing important performance indicators, this also becomes a statement of how the creators of the metrics view the organization. A manufacturing site interested in the quality of its products might choose indicators such as "pounds of scrap" or "non-prime production." A site interested in the safety of its employees might choose "number of accidents" or "number of safety violations." Although these are important and are valid indicators of conditions in the organization, they also focus attention on undesirable events.
These could be stated as "percent of prime production" or "number of safe hours worked" and still give the same information. Either way they are worded, they serve as a constant reminder and reinforcement of what is important in the organization. To the greatest extent possible, these should be worded to reflect the desired outcomes rather than the absence of them.

Another issue to consider is the level of performance that is reflected. A product development group could find a number of ways to monitor its performance and progress. If the focus is on group-level performance, they might track "number of products under development," "number of teams working," or "distribution of re-
sources per project." A shift in emphasis to a higher organization level might lead that group to track "time to market," "product acceptance rates," or "existing product replacement rates." The challenge here is to focus on what makes the organization successful in its environment yet maintain enough internal focus to guide immediate action. Another consideration here is the time horizon. Many of the overall success factors require longer time frames. A work-unit level success factor has to have a shorter time horizon so groups can quickly adapt to market requirements. When designing metrics, try to strike a balance between these levels.