what gets measured gets undone

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What Gets Measured Gets Undone. Dr. Jim Mirabella Director of Institutional Research Professor of Statistics Florida Community College - Jacksonville (FCCJ) J. Michael Adams Corporate Manager, Quality Services Florida Power & Light/ FPL Group, Inc. Florida Sterling Conference - PowerPoint PPT Presentation

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  • What Gets Measured Gets UndoneDr. Jim MirabellaDirector of Institutional ResearchProfessor of StatisticsFlorida Community College - Jacksonville (FCCJ)

    J. Michael AdamsCorporate Manager, Quality Services Florida Power & Light/ FPL Group, Inc.

    Florida Sterling ConferenceWednesday, May 31, 2000Disney World, Orlando, Florida

  • Whats getting undone ?The desired outcome and supporting processes that the measure(s) intended to describeWhy????Poor measures drive poor performance!

  • Objectives of the workshopKnow good measurements from poor measurementsDistinguish the implications of good and poor measures on performanceBalance an array of measures that favorably tracks a processs outcome for planning, assessing performance, and analysis Assess attendees measures Any other expectation?

  • Why Measure at All?Measurement is the language of progress and comparisonProvides a sense of where we are AND where we are going (planning)Can guide a steady advancement toward established goals (tracking)Can identify goal shortfalls, or over-achievement (analysis)Communicates to the work force what is important to the organization (behavioral)

  • Good measures are born from SMART goals

    SpecificMeasurableAgreed uponRealisticTime-Bound

  • The Challenge of MeasuringWorkers might perceive it as a threatWorkers might disregard organizational goals, customers, products and servicesWorkers might focus on obtaining favorable measurementsMeasuring items with no influence on organizational success = waste of time result is a bean-counting approach that focuses on irrelevant detailsExpected to do something!

  • The Challenges- examplesApples and orangesImpact on comparisons, benchmarking and performanceturnoverconsistencydefects vs. defectivescommutes (measured in time or miles)school achievement

  • Where are these measures Organizational ProcessDepartment/work unitIndividualExercise

  • Your measures Jot down your various performance measures for you, your department, unit and organization. Indicate the purpose of the measure ( 1= planning, 2= tracking and analysis; 3: behavioral changes)

    Organization

    ProcessDepartment/ Unit

    Individual

  • What Do We Measure?QualityDeliveryCycle TimeWasteCostDefectsSatisfactionComplaintsFinancialsPrice

  • Measurement ExamplesOperations-related measuresreliabilitytimeliness of deliveryorder processing timeerrors / defectsproduct lead timeinventory turnovercost of qualityemployee

  • Measurement ExamplesCustomer-related measurescustomer satisfactioncustomer complaintscustomer retentionFinancial measuresmarket sharesales per employeereturn on assetsreturn on sales

  • Baldrige/ Sterling: Results CategoryPrivate, Education, Health Care7.1: Customer Focus Results; Student Performance, Patient and other Customer Focus 7.2: Financial and Market; Student and Stakeholder Focused Results, 7.3: Human Resource Result; Budgetary and Financial Results, Staff and Work System7.4: Supplier and Partner Results; Faculty and Staff Results7.5: Organizational Effectiveness

  • Determining and Reviewing Measurements for BalanceBaldrigeResults 7.0CustomerFinancialHuman ResourcesSupplier/ PartnerOrganizational

    supplier

    deptprocess

  • Desired Outcomes- Airlinesoverall organization balance scorecardAssumed Quality- arrive safelyLoyal CustomersMarket differentiation, key value attributes:on-time arrivalbaggage handlingcustomer complaintsProfitability and Market shareSatisfied stakeholders (shareholders, partners)Employee growth and retention

  • Airline Measurement SystemIndividual measures for each flight processGroup measures for overall airlineIf problems occur with a flight, who do you blame -- the flight crew or the airline?What measures do you affiliate with the flight crew?What measures do you affiliate with the airline?What is important to you for a satisfactory flying experience?

  • Review your measuresAre the organization measures reflective of all Baldrige results items?Do the measures reward favorable behaviors?Is there alignment with the contributing departments and suppliers?Are the overall results managed as an outcome of a process?

  • Whats the opportunity?Many organizational measurement systems are too short, too rigid, or used like a strict teachers ruler ... to whack rather than to motivateNeed to replace these outdated measurement systems with more dynamic measurement system that motivates continuous improvement in customer satisfaction, flexibility, and productivity SIMULTANEOUSLY

  • Mis-measurement SystemsUnless specifically tuned to flight plan, measurement systems may:yield irrelevant / misleading informationprovoke behavior not conducive to strategyTraditional measures ignore requirements & perspectives of customers (internal/external)Bottom-line measures (profitability) too late for mid-course correction / remedial action

  • Mis-measurement SystemsMany measurement systems overlook key non-financial performance indicatorsMeasures often used for punishment rather than to promote learningMany measurement systems are inflexible and limited in what they can do

  • What Should a Measurement System Do?Measures must link operations to strategic goalsdepartments should know how they contribute separately and together toward strategic missionSystem has to integrate financial / non-financial info in a way usable by managersmanagers need right info at right timeMeasurement systems real value lies in its ability to focus all business activities on customer requirements

  • What Should a Measurement System Do?Measure what is important to the customersMotivate operations to continually improve against customer expectationsIdentify and eliminate waste -- of both time and resourcesHelp to accelerate organizational learning and build a consensus for change when customer expectations shift

  • Measurement Mismanagement In an effort to increase market share, a computer service bureau strategizes to improve the timeliness of its voicemail service. The goal is to provide new customer with service w/in 24 hours. To help speed the process, a program is developed to accept verbal phone orders. Most new customers were online w/in a day as promised, causing the company to celebrate their success. A later audit revealed 70% error rate in order entry, with 30% of customers disputing their bill and eventually canceling service..

  • Measurement Mismanagement A Hi-Tech company sets objective to become highly profitable by being a product leader. To measure the performance of its marketing and R&D functions, the number of new products developed is the most watched barometer. An internal review reveals that in a sample of 20 new product introductions, 80% were delivered over a month late, and significant waste piles up in production. Management cannot understand why the accountants ink is red after all, their yardstick tells them they are developing new products at a record rate.

  • Beware of .. Seemingly Simple Measures

    How satisfied are your customers?What is your employee turnover?What is your client retention rate?Is the value of our service worth the price?

  • Beware of ..Treating customer perceptions as objective measuresCustomer satisfaction product qualityCustomer satisfaction is a complex phenomenonA well-handled complaint results in higher customer satisfaction than does no complaintMore reasons for complaint more dissatisfaction

  • Beware of ..Non-specific measurementsResults are actionableHard to improve what you cannot assessFailing to measure adequatelyThink BALANCED SCORECARDDont give employees an outlet for gaming successIdentify all areas important to customers

  • Beware of ..Using results incorrectlyDont tie results to employee pay unless employees can directly influence resultsDont base employee pay on results that cannot be measured

  • Recap of Objectives and ExpectationsKnow good measurements from poor measurementsDistinguish the implications of good and poor measures on performanceBalance an array of measures that favorably tracks a processs outcome for planning, assessing performance, and analysis Assess attendees measures

  • Thank you!!!!!!Jim MirabellaMike Adams

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