Performance Measurement: A Compass and Navigation System, All-in-One, BYOCoach

Do you care about the mission of your organization?  Do you want your organization to focus on programs, products, and services that align with the mission?  Do you want to initiate positive transformational change in your organization?  Are you looking for a system that enables you to structure the positive change in your organization so that everyone knows what to be working toward, how well the organization is moving toward its aspirations, and what changes the organization can make to improve?  Then you’ve come to the right place.  Read on to learn how you can develop an effective performance measurement system to help your organization learn and improve.

There are many types of performance measurement systems.  You can design performance measurement systems to monitor detailed information on a frequent basis (e.g. one department’s daily service delivery), aggregated information on an infrequent basis (e.g. the entire organization’s annual service delivery), or a combination of information.  How you design your performance measurement system depends on both the type of entity whose performance is being measured and the purpose for which the system is being developed.

Despite their different purposes, you can use a common design and implementation process to develop these performance measurement systems.  Ten important steps for developing an effective performance measurement system are:

1. Securing executive or senior manager support

2. Establishing a working group with overall responsibility for developing the system

3. Developing or confirming the purpose of the system

4. Creating the strategy map

5. Clarifying outcomes and additional performance criteria

6. Defining, evaluating, and selecting indicators and establishing performance targets

7. Specifying procedures for collecting, processing, and reporting performance data

8. Planning, conducting, and reviewing a pilot test

9. Implementing the system throughout the entire organization

10. Using, assessing, and adjusting the system if necessary

By carrying out these essential steps you can develop a performance measurement system that enables your organization to make better decisions, improve its performance, and function more effectively.

To give you an idea of how this process works in practice, I’ll give you a brief synopsis of how the working group for the Mental Health Department of Santa Clara County has been going about developing a performance measurement system (I am a member of the working group as well as a member of the Mental Health Board).

Step 1: The Director of the Mental Health Department is an active member of the working group and a vocal champion of the initiative to develop an effective performance measurement system.

Step 2: As I mentioned, the agency established a working group composed of multiple stakeholders to develop the system.

Step 3: The working group drafted a charter to confirm its purpose and the purpose of the system.

Step 4: The working group reviewed the agency’s strategy map to clarify the agency’s goals and identify the relationships between its actions and aspirations.

Steps 5 and 6: The working group is currently in the process of clarifying outcomes and performance criteria and defining, evaluating, and selecting performance indicators.  The working group is iterating through steps 5 and 6 by deciding on an initial set of performance criteria and associated indicators, having working group members and departmental teams discuss and evaluate the criteria and provide feedback, and then using the comments and suggestions to refine the set of performance criteria and indicators.

Step 7: The Director of Data Management for the agency actively participates in the working group meetings and discusses how easy or difficult it would be to collect, process, and report different measures.

As you can see, undertaking an effort to develop an effective performance measurement system is no easy task – it requires a significant amount of time, effort, and commitment.  At the same time, developing a performance measurement system enables your organization to function more effectively and improve its performance.  So go out there and initiate the process of developing a performance measurement system for your organization.  By doing so, you can deliver substantial benefits to your organization and to those you serve.

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2 thoughts on “Performance Measurement: A Compass and Navigation System, All-in-One, BYOCoach

  1. How do you know when you are supposed to use performance measurement to evaluate projects? All projects have outcomes, some more measurable than others. What do you recommend in-terms of weighing the overhead of performance measurement vs project impact/size/etc.?

    • According to the Project Management Institute’s A Guide to the Project Management Body of Knowledge, a project is defined as “a temporary endeavor undertaken to create a unique product, service, or result.” Therefore, a performance measurement system for a single project will likely be entirely different from a performance measurement system for an entire organization because the former will be based on the project’s scope and stakeholders while the latter will be based on the organization’s mission and long-term strategic objectives.

      You can use a performance measurement system to track many important aspects of a project, including changes to the project’s scope, schedule, cost, risk, and quality. There are several standard techniques for monitoring and controlling these project components, including earned value management, variance analysis, resource leveling, and Ishikawa’s seven basic tools of quality. The project manager can implement these techniques in spreadsheets, monitor deviations from the approved baseline, and report regularly to project stakeholders to keep all aspects of the project on-track.

      Deciding when to use a performance measurement system to track a project calls for judgment. Some factors to consider in your decision include the size (i.e. cost and duration) and complexity of the entire project, the relative importance of specific aspects of the project (e.g. cost overruns vs. customer satisfaction), as well as the overall importance of the project to your organization. Generally, as the size, complexity, and importance of the project increase so should your use of performance measurement techniques. Doing so increases your ability to monitor and control the project, make adjustments as necessary, and deliver a high-quality project on-time and on-budget. Remember, as they say, “you can’t manage what you don’t measure.”

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