While it is an accepted truth that to improve a process we must be able to measure it, knowing exactly what to measure is a key decision which often separates success from failure. Unfortunately, a very common problem is that we often end up measuring of the wrong aspects of the process and therefore end up using interventions which don’t help, and sometimes harm. So if we want to be successful, we have to be able to (correctly) answer the question: what are we measuring?
There are two closely related challenges in trying to answer this seemingly simple question. The first is that knowing what metrics represents process success is much harder than we think and we often end up falling into the trap of thinking this answer is obvious. The other unfortunate issue is that what is easy to measure and what is useful to measure are often at odds. The common result of these two issues is that we end up measuring the wrong (easy) aspects of the process and then wonder why it does not improve in regards to delivering value. We improve every aspect of the process, except what really matters.
The issue that underpins both of these challenges is the difference between measure the activity of the process and measuring the output of the process. The first tells us we are doing things right, while the later tells us we are doing the right things, and unfortunately what we measure tends to fall into the former activity-based measurements. These are simply measuring how efficient we are at delivering the process, without helping us understand how the process is delivering value.
Why is this? Well, it’s all the reasons previously mentioned. First, activity metrics tend to be more clearly and objectively defined (time to process, hours in wait states, cost to process, number of clicks, and so forth). These are easy to put clear definitions around and make numerical comparisons. They are also items that feel right and they seem so clear and pure in meaning. In addition, these tend to be the symptoms that individuals experience when a process is not operating effectively. They feel it’s slow, or burdensome, or costly. But these tend to be symptoms not the root of the process, and solely addressing them can hamper the more important aspects which we should spend more time measuring – the value being output by the process.
To be able to answer that question, we have to have a clear understanding about what the value proposition of the process is. How is the process helping its stakeholders (customers, administrators, owners) fulfill what they need to do to achieve success. A classic example I have been involved in more than once is working with organizations on their hiring process. Often there are complains about how slow it is and several metrics around time-to-hire, time-in-phase, dropout rates, etc… If those were all we cared about, then it’s an easy process to fix, just hiring the first person who submits a resume. Done!
However, the goal of that process is really about identifying and hiring top talent which will improve the organization. Certainly to do so, hiring quickly is important so they aren’t lost to competition, but what we measuring now is ‘are we hiring top talent?, and that is not as easy to measure than ‘How long is it taking us to hire?” These require the organization to think more deeply about their processes and the value of those process and then, most importantly, how that value is measured.
And that is where the power of ‘we must measure to improve’ becomes so powerful. It requires the purpose of a process to be codified and measured. This is not an easy task, but it is a very important one and one which delivers immense value.
So next time you are building a scorecard of metrics, think about how many are measuring the activity of the process and how many are measuring the value delivered by the process.