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You can obtain a legitimate copy by subscribing to Staceys free email newsletter, Measure Up, which provides you with even more practical performance measurement tips twice each month, at www.staceybarr.com.
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ISBN 1-921011-01-7 Written and published by Stacey Barr. Stacey Barr, 1999-2009
For additional information about how to make your performance measurement system a lot more usable and a lot more useful, visit www.staceybarr.com and explore a wide range of performance measurement resources.
No part of this book may be reproduced, transmitted, re-posted or duplicated in any form or by any means without the direct permission of the author and self-publisher, Stacey Barr. If you wish to quote a tip from this book, you may do so providing you acknowledge the author where you quote that tip. Disclaimer: The information provided is for the purpose of expanding the awareness of the reader of how to effectively design, develop and use organisational performance measures and the author accepts no responsibility for the subsequent use or misuse of this information.
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thanks!
A heartfelt thankyou to those who gave me the feedback to improve this book and make it more useful and more usable for others!
And my gratitude to those who took the time to share how 202 Tips For Performance Measurement have helped them, in particular:
Stacey, I have used some of the information that youre sending me in the mezhermnt ezine, and guess what - I have used the 202 KPI tips ebook to cascade KPIs to all people reporting to me. Since then we are always above target in terms of production. Alert Thovhokale, South Africa
I just signed up to your website and downloaded your 202 tips file. Thought to tell you how informative I found it. At 44 pages it took some focus but I read it from top to bottom. I have a personal view that data is of no value unless you do something with it. Your tips have given me several ideas on how to be a little more selective on what to measure and how to get the analysis message across... Thought to let you know I really enjoyed the read and will be back on the site searching for other items or interest. Steve Nolan, USA
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contents
about the author, Stacey Barr ....................................................................................................................7
how Stacey can help you ................................................................................................................................... 7
an introduction ............................................................................................................................................8
how to use this book........................................................................................................................................... 8 a framework for performance measurement ...................................................................................................... 8
phase 1:
consciously adopt a performance measurement framework ............................................................................ 10 decide which outcomes are most worth measuring.......................................................................................... 10 design measures that provide objective evidence of your outcomes ............................................................... 11 understand the relationships between and among measures .......................................................................... 13 define your measures to specify how to bring them to life................................................................................ 14
phase 2:
understand your data requirements thoroughly................................................................................................ 16 manage the integrity of your data ..................................................................................................................... 16 design cost-effective data collection processes ............................................................................................... 16 forms and questionnaires should facilitate easy, cost-effective data collection ................................................ 18
phase 3:
standardise and organise your data to make it easy to find ............................................................................. 20 integrate your data to get cross-functional use out of it .................................................................................... 20 capture your data in a way that preserves its integrity...................................................................................... 20 access your data in preparation for analysis .................................................................................................... 20
phase 4:
know the purpose of your data analysis ........................................................................................................... 23 summarising your data first helps you get to know it ........................................................................................ 23 explore your data for patterns (thats where the real answers are) .................................................................. 23 test to decide which patterns you can trust ...................................................................................................... 24
phase 5:
design graphs to make them useful for decision making.................................................................................. 26 decide the most useful structure and content for your performance reports..................................................... 27 use layout and formatting to facilitate valid and easy decision making............................................................. 27 ensure your reporting process and tools support decision making................................................................... 28
phase 6:
know when a difference is really a difference................................................................................................... 29 assess if you are on target (or not)................................................................................................................... 30
phase 7:
use measures to review your plans .................................................................................................................. 32 be clear about the role of measures in decision making................................................................................... 32 make improvement stick by fixing root causes ................................................................................................. 33 the most useful targets dont come out of thin air ............................................................................................. 34
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an introduction
how to use this book
If you are looking for some extra ideas, for a way to reflect on what you have been doing with performance measurement or for a quick reference to keep at the tip of your fingers, then this little book will be worth keeping on your desk. This book is not designed as an implementation guide for organisational performance measurement, but as a supplement to what you already have in place to design, build and implement your organisations performance measurement system. If you want more specific guidelines and how to information for organisational performance measurement, let me know (staceybarr@staceybarr.com) and Ill do my best to help you find what you need. Here are some ideas for how to use this book: If you are working on a specific aspect of performance measurement, such as designing a report, working out data requirements, or trying to decide what to measure, read the contents page to find the most relevant topic and read the tips in that section to help expand or reinforce the approach you take. Bit by bit, build up your knowledge about what excellent performance measurement is, by reading and reflecting on one tip per day or randomly flick through the pages and read what jumps out at you or scan your eyes over the highlighted summary words in each tip or open a page and read a tip while you are waiting on hold on the telephone, for a train or bus, or while you eat lunch. Share the ideas with others involved in performance measurement activities, by taking the book to your performance measurement development/implementation team meetings or share a tip with someone you know who reports performance measures or someone who uses them. Make yourself a coffee or hot chocolate or herbal tea and visit one of the internet sites listed in the references. Read through the list of references in the back and take the book to your favourite bookshop and have a look at the books that sound most useful or interesting to you. Its all about gradually growing your knowledge and wisdom about how to create fabulous feedback that helps you and your business improve until you really shine! I hope you have fun and really benefit from using this book. I had a great time writing it it always feels good to reflect on your experiences and list out all the things you learned from them!
1. select 2. 3. 4.
5.
6.
7.
Selecting what to measure means being centred on the outcomes that matter most to you and your business. Define your measures by carefully considering what form the evidence of these outcomes takes. The process of collecting data is critical to its integrity and can be very resource collect intensive. Its worth giving serious consideration to how you will go about it, so that your data can be fit for purpose. Where and how you store your data directly determines what data you can store access, when and how quickly you can access it, how easy or difficult it is to access and how much cross-functional use you can get out it. Analysis is the process of turning raw data into information. Make sure it is the analyse most appropriate information by adopting the simplest analysis approach that can produce the information in the form required to answer your driving questions. In communicating performance information, you are influencing which present messages the audience focuses on. Take care to present performance measures in ways that provide simple, relevant, trustworthy and visual answers to their priority questions. Interpreting your performance measures means translating messages interpret highlighted by performance information into conclusions about whats really going on. To turn information into implication, you must discern which messages are real messages. When you have worked out what is really going on with your organisations apply performance, you are ready to make some decisions about what to improve, how much to improve it by and how to do that improving.
Each chapter focuses on one of the above phases of PuMP, and it will begin with some more information about that phase to set the scene for the tips that feature in that chapter.
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The Balanced Scorecard by Kaplan and Norton [ref 5] doesnt tell you HOW to measure, it helps you decide WHAT to measure. It is only ONE of many different frameworks for deciding what to measure. Have a look around to see what else you have to choose from: The Performance Prism [ref 21], OPM [ref 31], Triple Bottom Line, EFQM [ref 32], ABEF [ref 33], Malcolm Baldrige Award [ref 34], what else can you find?
tip 2:
tip 4:
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measure the things we are doing well. These kinds of comments are symptomatic of a few things, in particular a lack of appreciation that measurement is not about proving, its about improving.
tip 5:
Peoples reluctance to measure things can also be symptomatic of an unhealthy performance culture, where blame and scape-goats dominate over curiosity and innovation. Do what you can to reinforce that performance measures are feedback about the systems and processes and behaviours, performance measures ARE NOT feedback about people.
tip 6: If you are stuck for what to measure, try starting with listing all the stakeholder groups of your organisation (or department or process), then find out for each stakeholder group
the 2 or 3 attributes that are currently most important to them about your organisation (or department or process) and are currently not performed very well by your organisation (or department or process). Measure and improve those attributes.
tip 7:
A very clear, concise strategic direction is essential before you can expect to develop really useful performance measures. Make sure your vision, mission, strategies and goals are all worded in rich, descriptive, sensory based language [ref 14] that evokes clear mental experiences of what the future will be like when you have achieved them. These descriptions will make it easier to select measures. Kaplan and Norton introduced the term strategy mapping [ref 27] which is a method of laying out the various components of a strategic direction and examining the relationships between them. The Balanced Scorecard [ref 5] is their template for identifying and categorising and linking components of strategy, but the same concept is useful even if you dont subscribe to the Balanced Scorecard. The basic idea is to visually map all the specific outcomes needed to bring your strategy to life, linking them together in cause-effect and companion relationships. See an example at http://www.staceybarr.com/OutcomesMap.pdf
tip 8:
tip 9:
Define each outcome or result or entity before designing the measure or expect
to spend a long time debating the measure and to end up with a measure that is not going to give you the feedback you really need. Begin with the end in mind, and Stephen Covey [ref 23] would say.
tip 10:
Stocktake your existing performance measures by placing them in a matrix based on the level of decision making they best serve (strategic, tactical or operational) and the stakeholder group they best respresent (shareholders/owners, customers, employees, partners, communities). Where are the gaps? Where is the oversaturation?
tip 11:
What are your organisations values? Would improving performance based on your current performance measures mean you would be living your values, or working in conflict against them? If you want to measure the effectiveness of your projects or other change initiatives, and realise that on-time and on-budget measures do nothing to help (they only measure a couple of dimensions of efficiency), then use tip 16: to help you develop some measures for how the project will impact on the business, how the project is tracking against its objectives and how well the projects strategies are working.
tip 12:
tip 13: If you can help people understand processes and process thinking, they will find it much easier to decide what to measure for feedback into the operational level of decision making. They just have to define their process and assess how it impacts on the organisations current strategic direction. tip 14:
Help people understand how their work impacts on others such as internal or external customers, internal or external suppliers and other stakeholders as clues for what might be important to measure.
Remember that performance measures are objective evidence of the degree to which an outcome is occurring. How much objectivity or subjectivity do your measures have? What kind of evidence forms that basis of the measures values?
tip 15:
tip 16: If you want performance measures to be owned and used, then the people to own them MUST be involved in the processes of choosing the measures and defining them. tip 17: If you have identified a really useful measure, make sure you also identify which person or people will be responsible for using the measure. Measures have to be used if they are going
to lead to improvement.
tip 18:
What do you do if you believe something cant be measured? Well dont give up straight away most people dont realise you can just follow a simple process to come up with some potential measures fairly quickly. First, describe the outcome to measure. Secondly, make it sensory specific detail how it would look, feel, sound if it were happening. Thirdly, brainstorm all the different things you could count (the evidence) that would prove the outcome was occurring. These counts are your potential measures. Choose the most direct, objective and feasible.
tip 19: Often people will say we cant measure that because we dont have the data for it. Be warned if you dont start trying to measure important things, you will NEVER have the data
your business needs. Performance measures are one of the ways that decision makers articulate their data needs to the IT people who are trying to design information systems that align with business decision making.
tip 20: Are you trying to measure too much? Any one person can really only effectively focus on at most 72 (that is, between 5 and 9) [ref 14] performance measure at any one time. More than
that and no one measure will likely be managed well at all. If you like TOC (Theory of Constraints) thinking, then you might connect with the approach to measurement that Eli Goldratt offers. It is simply based on using three measures of business performance, Throughput, Operating Expense and Inventory, as the basic building blocks of management information.
tip 21:
tip 22:
A lead indicator is a performance measure that gives you forewarning of an impending change in another performance measure (the lag indicator). Usually they are measures of results or outcomes of activities or steps that occur in the early stages of a process (or chain of events) that produces the result or outcome tracked by the lag indicator. To find useful lead indicators, you need to flowchart or map or diagram the chain of events that lead to your lag indicator and test which steps in this chain are the most influential on your lag result.
To be useful, you need to track your lead indicators with greater frequency than the lag indicator they predict. Dont aim for a perfectly complete set of performance measures before you start bringing them to life. Instead, adopt an action learning process whereby you focus on a small number of measures first, bring them to life (which will iron them out a little more) and then use them to see if they add the value you anticipated. Learn from this entire process and use this learning to bring to life and use another set of measures.
tip 25:
Its better to have an imperfect measure that captures the essence of what you are trying to measure than not measuring it at all. Using the action learning approach (tip 24:) so you can build some momentum and accelerate your learning.
tip 26: To get a head start on selecting measures, do a little industry research to find out other best practice organisations are measuring things. But DO NOT adopt any measure unless
it directly supports your strategic direction! It actually helps if you have formulated your strategic goals or objectives before doing this kind of research.
tip 27:
Avoid so-called measures such as completion of plan by June 06 or new IT system in place. These are milestones or events and not measures at all (nothing is being counted over time
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and there is no real comparison to guage change). They are not really outcomes but more the chosen means toward the outcome. Many an IT system has been put in place and not delivered its intended outcomes! Always measure outcomes, not events or milestones.
tip 28: Whatever you do, dont rely on brainstorming as a method for coming up with measures. Its too easy to go off track or end up listing potential measures that are no better than any measure you have ever used in the past. The best measures are measures that provide direct and objective evidence of the outcomes you want to track, so use tip 16:.
Involve some people from outside the area of the business you are trying to measure to help you get a fresh perspective. Encourage them to ask dumb questions that challenge your current thinking and reframe the ways you look at the purpose and outcomes of that area of the business.
tip 29:
tip 30:
Criteria for deciding whether or not to take up a measure can really help clarify the selection process. Criteria might include: strength of alignment to strategic direction, cost-benefit of data collection, degree of influence you have over it, level of complexity or understandability, etc
tip 31: When you choose a measure to track a particular outcome, ask the question what kinds of behaviour could this encourage people to choose? as a way to check that
measuring the outcome wont create any other performance problems (you know, you measure cycle time and everyone does their best to work faster at the expense of reliability of their work or quality of their relationships with customers or other stakeholders).
tip 32:
Its becoming common knowledge now, but check that you have a balance between measures of finanacial performance and measures of non-financial performance. Financial measures are very lag, and make it hard for you to anticipate problems before they eventuate. It is possible that you might end up with a set of measures that track your current strategic direction AND a set of measures that track business as usual, which are outcomes you want to maintain or keep an eye on even though you have no current intention to improve them as part of your strategic goals. Do people in your organisation have a tendency to measure the easy stuff? You know, the number of inquiries, the number of transactions processed, the number of calls answered, and so on? These are activity measures, and while somewhat useful for workload management, they are not outcome measures and thus do not drive performance improvement. Often you have little control over them anyway.
tip 33:
tip 34:
tip 36: Your measurement map (tip 35:) can act as a road map for cause analysis and strategy implementation. If you are responsible for a small collection of measures, then look at
the relationships your measures have to others. Which measures are counting on you to improve your measures before they can improve? Which measures would you look to for leverage to improve your measures? Which measures should you be wary of inadvertantly affecting through improving your own?
tip 37: Your measurement map (tip 35:) can help everyone in the organisation understand how they influence organisational success and sustainability. By
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understanding which measures they directly affect, they can follow the linkages through to the strategic level to understand why their improvement actions matter.
When you define the intent of each measure, think about what business question you are trying to answer with it, or what action you cant take unless you have this information.
When you define the calculation formula for each measure, try to be as mathematical as possible to identify each data item that will be needed. For example, [sum (satisfaction_rating) / count (respondents)] is better than average customer satisfaction. This makes the sourcing of the data items less ambiguous and thus less likely for your measures integrity to be compromised.
tip 42:
When you define the owners of each measure, consider different types of ownership, such as the owners of the data items, the owners of the defintion itself and the owners of the performance area being measured (usually the one who uses the measure).
tip 43: One way to check whether to invest in a particular performance measure is to describe exactly how it will be used and interpreted if you cant see any action or decision being
taken as a result of using the measure, then theres probably not much point bringing it to life. The time to do this is when you are defining the measure, after you have defined its intent (tip 40:), calculation (tip 41:) and owners (tip 42:).
tip 44:
When everyone has an opinion about the "shoulds" of a measure as you try to define it, there's a good chance that you haven't converged on the specific entity you need to measure. Keep your performance measure definitions in a dictionary so people can keep up to date on the meaning of each measure, keep track of changes made to measures, quickly identify which measures are currently most important and have a specification for how to consistently calculate and report the measures.
tip 45:
tip 46: I use a Microsoft Access database for performance measure defintion dictionaries which I share with clients. It makes it easier to search for specific measures, track
them using a unique identifier and produce action plans for data collection and sourcing from the data items section in the definition.
tip 47:
Make a very conscious decision about where you write your performance targets: in your performance measure definitions, in your performance reports or in your business plans? A conscious decision means you have a clear rationale or reason.
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tip 49: Tabulate a summary of your data item requirements by collating them from your performance measure definitions (see tip 38:). List the data item names, descriptions, which measure(s) they are required for, the source system (such as a database, if one exists) and whether or not each data item is currently available and has sufficient integrity. tip 50: Where your data item requirement summary (tip 49:) shows you need data that is not currently available, you will probably want to consider designing a data collection process to make
it available. Read on for more help!
tip 51: Where your data item requirement summary (tip 49:) shows you need data that does not have sufficient integrity, you will probably want to consider improving its data collection
process to make build in more integrity. Read on for more help!
Dont rely on data from volunteer surveys, like mail surveys. Response rates of 9% (for example) can not be trusted to give you objective information.
Just because you got a response rate that was unusually high for this type of survey doesnt mean you got reliable data!
tip 55: Good survey data can only come from a randomly selected sample. Otherwise your data is biased. What happens if you make a decision based on biased data? You usually get different results to what you need or expect, and that almost always means wasted money, time and effort. tip 56: A good sample size IS NOT a particular percentage of a population. If you have 1000 employees and you want to survey their satisfaction, a 10% sample size is a purely arbitrary decision. Your sample SHOULD depend more on how much variation in responses you are expecting (the more variation, the bigger the sample size) and how reliable you want the estimates to be (the more reliability you want, the bigger the sample size). tip 57: Survey statisticians and market researchers will have a formula that will help you calculate your ideal sample size based on what you are trying to measure through the survey. tip 58:
You can actually measure the amount of integrity your existing data has, by way of a data audit. This usually involves taking a sample of records or data items from your database systems and checking them against the original sources (such as people, forms or objects) for such things as completeness (e.g. missing values), accuracy (e.g. typing errors) and precision (e.g. the amount of detail). Ask your business or quality auditors for advice.
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conscious decision about how much you will invest in your data collection process and
how much integrity the resulting data will have.
tip 60: If you are designing a new data collection process, involve the people that will own or do the data collection in the designing. Refer also to the data owners that might be nominated in
the corresponding performance measure definition. It is important to carefully define the scope of the population you are collecting data from, or your data will end up being diluted or only a partial representation of what you are trying to measure. For example, if you want to measure the cycle time of order processing, dont just measure one person or one team: your scope is all orders that are processed and so your data collection should cover this entire scope (even if you just take a random sample).
tip 61:
tip 62: If you are finding the data collection effort for your defined scope (tip 61:) is going to be too overwhelming, then consider narrowing your scope for a while until the data collection
process becomes familiar and bedded down. Then you might try widening the scope again. Just be sure that when you report your performance measures, you note the scope that the measure applies to.
tip 63:
Where can you automate data collection? Can a computer do what a paper form is currently doing? Can an existing form be modified a little to capture the new data you want?
tip 64: Flowchart your data collection process(es) to understand how they currently work, and therefore how you can modify them to improve data integrity, data availability, data timeliness, or the impact the data collection effort has on people who work in that process. tip 65:
When your data is collected, where does it go? Straight into a database system, or does it sit in a pile somewhere, or several piles in several places? Data is a precious asset for any business, so take a deliberate approach to how data is collated and captured after it is collected.
tip 66:
Always pilot test your data collection processes before going live. This always surfaces things you cant anticipate, such as ambiguities on forms or questionnaires, confusion in exactly how to collect the data, practical constraints that prevent the data being collected in the way you planned or that the data you collect isnt really what you need.
tip 67:
When your data collection process has been designed, tested and had the bugs ironed out of it, document it so becomes a resource to those involved in the data collection process, which can help keep the collection consistent as time goes by.
tip 68: If you are collecting data from stakeholders of your organisation, such as employees, customers, shareholders, communities or strategic partners, consider outsourcing the data collection process to help respondents feel that they can be candid and their confidentiality wont be compromised. tip 69: Are you collecting more data than you need? Data collection certainly costs time and effort and money and there are so many examples of data collection processes that capture too much interesting information and not enough useful information. Apply the interesting-versususeful test on each data item your organisation collects (not necessarily all at once, of course).
tip 70: Consider (carefully, to avoid going overboard) what supplementary data you might need in addition to the performance measure data you are collecting. Supplementary data can be
analyse to provide a context in which to interpret your measures, by answering questions such as what caused this change? or where is this happening the most? or is this result the same for all customer segments?.
tip 71: Who else might be already collecting the data that you need? Another business? A government department? A market research agency? Your suppliers? A university or business school? An industry association? Why duplicate effort?
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tip 73:
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A data dictionary can be very useful when designing new measures. Like a menu, it lists all the data items available in the organisation, where they can be found, what format their values take, how regularly they are collected, and so on. Very useful if you want to avoid duplicating your data collection efforts.
Avoid keeping your organisations data stored in informal, independent systems like spreadsheets or applications custom made for specific projects. You get a much higher return on your data when it can be shared and used around the organisation.
tip 76:
tip 78:
Getting access to data is equally important as capturing it. The way that data is captured in a database system or other format (such as a spreadsheet), limits how easy it will be to pull it out again so you can analyse it and create the values of your performance measures.
tip 80: What are your organisations protocols for protecting confidential data? Do they prevent you from sourcing data for a particular performance measure, or are you able to still calculate the values of your performance measure without compromising confidentiality? tip 81: Who has access to data and who doesnt is an important to decision to make, in order to prevent the datas integrity from being comprised and to manage confidentiality.
tip 83: Sometimes the process to actually extract or source the data for your performance measures can be too difficult or technical without the help of an IT expert. Consider working with the experts to create some simple macros or queries that you can easily run each time you need to calculate the latest value for your performance measure. Better still, how can the calculation of your performance measures be automated entirely?
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Data analysis (to create your performance measure values) almost always requires that you take (copy, really) a chunk of data out of its source system and put it into the analysis package you will use. Think very carefully to understand the format you need the data in to analyse it before you extract or pull that data out of its source systems. For example, do you want transaction level data, or summary level data such as weekly totals.
tip 84:
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Find out the questions that users of your performance measures have and are expecting the measures to answer for them, and then choose analysis and graphical methods that best answer these questions.
tip 89:
explore your data for patterns (thats where the real answers are)
tip 90: A mean or average doesnt really tell you enough about the level of performance. Accompany a mean with other statistics that give you a feel for the shape of variation in the level of performance, such as the standard deviation, the range, the mode or median, or the quartiles (the 25th and 75th percentiles). You can find out more about these statistics in any good business statistics book or by looking for statistics pages on the internet.
tip 91: Avoid using straight counts or tallies as the values of your performance measures (such as the number of transactions processed). Performance is almost always a relative thing, and thus you get more information when you use rates or percentages or averages (such as the number of transactions processed as a percentage of the total number of transactions received, the number of transactions processed per employee). tip 92: Remember that performance measures are most useful when you are tracking a specific result over time in a regular way. This will help you understand the dynamics of
performance levels, that is, how much the level naturally varies over time, when the level is changing, and when something abnormal happens. Analysis of performance data is more than just computing the values of your performance measures its also about providing a context or explanation around your performance measures. Consider supplementary information like a Pareto analysis of the potential causes of a change in performance, or a breakdown of your performance measure by some relevant classifying factor such as region, customer segment or business process. These supplementary analyses may require you collect a little more data (see tip 70:).
tip 93:
tip 94:
If you want to explore causal relationships between measures, then try techniques like scatter plots or correlation or regression analysis. These analyses test the strength of the relationship between variables, but beware: just because there is a relationship, doesnt mean it is a causal relationship! Use your common sense and curiosity to inquire further.
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tip 95: Did you know that you need a bare minimum of 20 consecutive performance values before you can even begin to do a reliable trend analysis? In fact, youll often need even
more than 20 before you can see the big picture pattern of variation in your performance values.
tip 96: If you are tracking your performance measures over time, then statistical process control charts will be really useful for you they make it really straightforward to decide how
much the level of performance naturally varies over time, when the level is changing, and when something abnormal happens. A little more information about SPC charts are provided in tip 97: and .
tip 97:
When you have your minimum of 20 consecutive performance values, and they show a reasonable amount of stability over time (i.e. no big changes or shifts), then calculate the mean (average) of these values and put a straight, horizontal line for this mean through a time series chart (line chart) of your performance values. This mean line is a good benchmark for deciding when performance really is changing or not. Dont recalculate this mean line until you see a signal. The following tips tell you about the signals.
If you have implemented tip 97: where you added a mean line to the time series chart of your performance measure values, then you might like to add some additional, useful benchmark information, called control limits. The control limits show you how much variation you can expect from your current level of performance, unless something fundamentally changes (like you change the process producing that performance). The control limits are simply calculated as 3 standard deviations above and below your mean line.
tip 98:
tip 99:
After getting to know your performance data (tip 89:), looking for patterns is often what happens next. To explore your data for patterns, try analysis methods like scatter plots, line charts, bar charts, box plots and correlation coefficients.
tip 101: If you just cant live life without linear trend lines (I suggest you should find a way), then 2 always report the R (r-squared) statistic with the trend line. This statistic takes a value between 0 and 1 (or 0% and 100%) and effectively tells you just how good your linear trend line is at conveying the message in the data. The lower the R2 value, the less confidence or trust you should place in your trend line as any kind of useful conclusion about what performance is doing. tip 102: If you have a theory about a potential lead indicator for a performance measure (such as
cycle time as a lead indicator of customer satisfaction, or customer satisfaction as a lead indicator for profit), find out more about how correlation analysis can help you test the lead indicator strength in predicting what the performance measure will likely do in the future.
tip 103: Be wary of data mining applications. They dont replace the need for performance
measurement (well, not yet anyway). Performance measurement needs to be a very conscious process, where you deliberately seek the answers to business questions around the achievement of goals. Data mining is a more exploratory method of analysis to surface potential trends or patterns you were otherwise unaware of. These trends or patterns may not necessarily mean anything, either.
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tip 105: The purpose of graphs are to make huge amounts of quantitative information more easy to digest. So, keep your graphs as simple as possible or they wont be adding anything useful
to your ability to use your performance measures wisely and effectively.
tip 106: To keep your graphs simple, try getting rid of what Edward R. Tufte [ref 21], a visual information expert, refers to as chartjunk all the stuff on your graph that uses ink but doesnt add
useful information. Typical chartjunk includes grid lines, extra tick marks, long titles and explanations, self-explanatory legends, borders, kooky fill patterns (like checkers or stripes).
tip 107: If you use gridlines in your graphs, ask yourself the question, what purpose are do the gridlines serve? If it is to encourage users to focus on the value of individual points of data, then
why do you have the graph? Graphs are about highlighting patterns and signals and are not supposed to be another form of a table.
tip 108: If you must use them in your graphs, make sure your gridlines are very fine and light in colour so they can serve their purpose without dominating the data. tip 109: Do you need that many tick marks? Are they really helping, or are they just cluttering up
the graph?
tip 110: Graphs are not a canvas for artwork, they are a canvas for patterns and signals in
quantitative information. Little piles of coins dont make useful bars in your barchart of revenue or expenses.
tip 111: Avoid using 3-dimensional charts as they have a tendency to confuse the eye with
the addition of sloped lines to produce the 3-D effect. Nice straight horizontal and vertical lines are the best for visual comparisons.
tip 112: There are some useful things to include in your graphs to help users interpret and understand what they are looking at, like a title or axis labels that clearly explain the measure being charted, a legend if you are reporting more than one variable, a footnote that clarifies the scope or exclusions of your measure and sometimes even the source of the information or data is helpful. tip 113: Do you ever chop out the middle or chop off the bottom of your scale on the
vertical axis? So instead of starting at 0, you have your axis starting from something like 350 (for example)? This practice over exaggerates any patterns or signals in your data, and may lead users to draw invalid conclusions.
tip 114: Avoid using pie charts to report performance. Pie charts are very good for
prettying up your annual reports or marketing material, and sort of good for showing how big a single part is relative to its logical whole, but are pretty much awful at helping you make performance improvement decisions.
tip 115: Bar charts work best with between 5 and 9 bars and for the purpose of comparing the size of elements to one another. Avoid using bar charts for time series data they just look like mountain range sillouettes, not trend information. tip 116: If you have charts that have stacked bars, grouped bars, area charts or line charts with
more than 3 lines on them, you have information overload. It will take users quite a while to figure out what the chart is trying to achieve, and they will be forced to look at individual numbers to figure out trends or patterns. One chart per performance measure.
tip 117: To make your statistical process control charts look a little less cluttered, try
making your mean line light grey and solid, and your control limit lines light grey and dashed, both
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without symbols. The line for your performance measure values can then take pride of place by using colour and symbols to your liking.
tip 118: Consider designing a standard graph template for each graph type you will use to
display your measures. A standard look and feel helps the stengthen the focus on the information, and minimise the distraction of formatting differences. Standards like these can be applied corporately.
decide the most useful structure and content for your performance reports
tip 119: How do you report your performance measures? Have you taken a conscious approach to
designing how performance measures are collated and arranged and narrated in performance reports? What is your rationale for how performance measures should be reported or displayed to their users?
tip 120: Design the contents page of your performance reports before you design
anything else this will help you set up a useful and usable structure for the report before you get lost in the detail.
tip 121: Identify all the users of your performance measures before designing your
performance report you may need different formats of the report depending on the type of user.
tip 122: Interview users of your performance measures to find out what needs the performance report has to satisfy, such as how frequently they need it, what they need it for,
how much time they want to commit to using it, what specific questions they are wanting it to answer, what format best suits them (see tip 135:) and so on.
tip 123: Dont succumb to all the needs of the users of your performance measures report design is not all art, its a science as well. If you want it to still be useful, avoid including
someones idea just to avoid hurting them or being politically correct. The best thing you can do for such people is help them make the best use of their information.
tip 124: Decide the theme of your performance report. Dont just lump a whole lot of measures
together without thinking about the decision process that it should serve. Consciously decide your rationale for which measures to include and which to exclude.
tip 125: If the commentaries in your performance reports consist mainly of explanations about why
targets werent met or why this month is worse or better than last month, then they are not too far from useless. Managing performance means managing the trends and patterns, not events. How could you put more information about the trends and patterns in your reports, and less of the ad hoc trivia that suggests you never need to, or are able to, do anything to improve performance?
tip 126: Put a contact name with each measure in the performance report so users can
follow up if they want more information. This might be the owner of the measure, as documented in the measures definition (see tip 38:).
tip 127: Consider if it would be useful to include with each measure in the performance report its description, as documented in the measures definition (see tip 38:), to remind users
what the meaning of the measure is, so they are less likely to jump to the wrong conclusions.
use layout and formatting to facilitate valid and easy decision making
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tip 128: Colour can really help information jump off the page in your performance reports. Red can strongly communicate unacceptable performance, green for improving or acceptable performance and orange for early warnings about likely future results. tip 129: Some of the more useful types of information to include in a performance report
include the graphs of the measures, brief comments about any patterns or signals the graph is giving, what the causes of the patterns or signals are and comments about what is being done to respond to the patterns or signals (if a response is required).
tip 130: Carefully design the page layout to give a consistent look and feel throughout
your performance report. Consider where you will place graphs, interpretation comments, cause analysis, action updates and so on. This helps people navigate through the report and find the information they are looking for.
tip 131: At your local library or bookshop, look for books on graphic design and layout to
get ideas and example for making your performance reports professional, simple and incredible usable. A good one is The Non-Designers Design Book [ref 18] by Robin Williams (no, not the actor).
tip 132: Try designing your performance reports with one page per measure and include
the title of the measure, a graph, a simple comment interpreting the graph, and a brief cause analysis. This way you can pull together different collections of performance measures for different users.
tip 133: Play around with interpretation flags, little icons that symbolise visually and rapidly what each performance measure is doing. For example, can mean that performance is in balance and where it should be, can mean that performance is headed in the wrong direction and needs immediate attention, can flag if there is an early warning of poor performance and can symbolise improvement. tip 134: Keep your performance reports as visual as possible, avoiding lots of text. This is time consuming and often doesnt tell the user much that they really want to know, or couldnt find out by talking to someone if they felt they needed to. Focus on graphs, interpretation, cause identification and action progress.
tip 136: Remember that performance reports are not all paper based documents! They can
be wall charts, web pages, pdf files, PowerPoint slide shows, flipchart story boards anything that works for their users!
tip 137: Electronic reports, such as pdf or html based reports, enable hyperlinking. And with hyperlinking you can automate the links between your performance measures to make
cause analysis a little faster. Use the linkages on your measurement map (tip 35:) as the specification for how to set up the hyperlinks in your reports.
tip 138: If you use the latest in Business Intelligence software to report your measures, you
still need to apply the thinking in the above tips most BI applications I have seen are more about flashy things to do with clicking and linking and drilling down, and have very limited capability to encourage really good cause analysis (see tip 168:) and valid interpretation of information ( see tip 140: to tip 149:).
tip 139: Flowchart your reporting process, linking together all the steps needed to source, analyse and present the data and measures to their audiences. Define who does what, and when it needs to happen.
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tip 141:
Understanding variation is a very important (no, essential) skill in interpreting performance measures. And it doesnt mean using statistics like percent variation from budget either. Find out about Donald Wheeler [ref 30] and his book Understanding Variation: the key to managing chaos to discover why this is so important and what it really means.
tip 142: Beware of rolling averages or moving averages. They were really designed to
smooth variation (such as seasonal variation) out of a time series. But because they mask this variation, you simply cant tell if a real change has occured (until much later) or when it actually occured. Looking at overall long term trends doesnt help us respond when we need to in order to keep performance tracking in the direction we need.
tip 143: In her book Leadership and the New Science [ref 16], Margaret Wheatley has a chapter
called The Creative Energy of the Universe Information. In this chapter, she addresses the issue of interpretation of data from a very non-measurement and non-statistical perspective. She mentions that the greater the ability to process information, the greater the level of intelligence that the organisation will have. Valid interpretation of measures is vitally important since it is an essential part of the ability to process information. Valid interpretation is an essential condition for organisational intelligence.
tip 144: What do you do if users are reacting to individual points of data instead of looking for real trends and real changes in performance? Ask them how do they know that last
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month (or the same month last year, or last year, or whatever the benchmark they are comparing against) was typical, and thus a reliable benchmark?
tip 145: If you have implemented tip 97: where you added a mean line to the time series chart of your performance measure values, then if you see seven or more points in a row (or 12 out of 14 in a row) above the mean line, or seven or more points in a row (or 12 out of 14 in a row) below the mean line, you have a signal that performance has suddently shifted! Calculate a new mean line from the series of points that you found on the one side of the mean line. Thats your new overall level of performance. Dont recalculate this new mean line until you see another signal. tip 146: If you have implemented tip 97: where you added a mean line to the time series chart of your performance measure values, then if you see seven or more points in a row (or 12 out of 14 in a row) consecutively increasign or consecutively decreasing, you have a signal that performance has gradually shifted! Calculate a new mean line from the first seven points you get AFTER the series of points that you found consecutively increasing or decreasing. Thats your new overall level of performance. Dont recalculate this new mean line until you see another signal. tip 147: If you have implemented tip 98: where you added control limit lines to the time series chart
of your performance measure values (that is, you have a proper statistical process control chart), then if you see a point fall outside the control limit lines, you have a signal that an abnormal event occurred. This is not indicative of any change in performance, just the result of a single event having a temporary effect.
tip 148: If you have implemented tip 98: where you added control limit lines to the time series chart
of your performance measure values (that is, you have a proper statistical process control chart), then if you see several or many points fall outside the control limit lines, you have a signal that performance is chaotic. This is indicative of lack of control or stability in the process or system that produces your performance result..
tip 149: Survey results are used by many, many organisations, but they are often not used properly. Do you know what a confidence interval is and how to use it? Effectively it tells
you how reliable the survey result is that it relates to. As one example, imagine that employee satisfaction this year is 4.5 and last year it was 4.0, giving a difference of 0.5 (an improvement). This difference of 0.5 would have a confidence interval, and just say its 95% confidence interval was 0.5 0.6 which is represented as [-0.1,1.1]. While 0.5 looks like a nice improvement, theres a 95% chance that there was no improvement at all, since the confidence interval contains zero in its range.
tip 151: If you use statistical process control charts (see tip 96:) then decide what exactly you should be comparing with your target. If your target is to improve the average level of
performance, then use the meanline, or if your target is to set a maximum level, then use the upper control limit, or if your target is to set a minimum level, then use the lower control limit, or if your target is for a range, then use both the control limits.
tip 152: Dont forget to keep monitoring performance even after the target has been met make sure the improvement you implemented to reach the target is sustainable before taking
the measure off your radar.
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tip 154: When you report performance measures (see the tips for tip 103:), also report information about improvement actions that are being taken in response to the signals (see
the tips for phase 6:) those measures have given.
tip 155: Organisational learning is a process that permeates every business activity, and that includes performance management. Learning happens when you check to see if your decisions and improvement actions worked. In other words, as a result of your decisions and
improvement actions, did your performance measures achieve their targets without any unintended consequences?
tip 156: Do your measures indicate that you achieved your business plan? If so, then you may now be ready to review your business plan and also your selection of performance measures. But dont forget to ensure the improvements you made are now business as usual and not temporary. tip 157: One very important application of performance measures is in regular plan review. Strategic performance measures should be used by senior managers to regularly review
progress of performance relative to strategic goals. Likewise for tactical and operational goals. Performance measures are the feedback loop between the planning process and the improvement process to help us monitor the gaps between as is performance and should be performance.
tip 159: Do you know who to hold accountable for performance results? This usually
means that if a performance measure is trending in the wrong direction, or not achieving target, a particular person is dragged over the coals or given the sack. Businesses are getting more and more complex and as a consequence, performance results are being influence by so many different things. NO ONE person should ever be held accountable for performance results. See tip 160:.
tip 160: When it comes to performance measurement and management, the ideas things to hold people accountable for include regularly monitoring the performance measure, validly
interpreting the measures results, identifying root causes, initiating improvement actions, evaluating if those improvement actions worked, and learning from the evaluation on the organisations behalf.
tip 161: The decision making process that uses performance measures has distinct
steps, which include: prioritising which results to respond to, describing the desired outcome or results to achieve, understanding the current capability of the system producing the outcome, exploring any unintended consequences of taking action, developing strategies, implementing the strategies and finally, checking if it all worked.
tip 162: Benchmarking with other organisations (either in your industry or not) is a great way to share learnings and gather ideas for improvement. Go ahead and compare your performance measure results but be aware that they may define their measures differently, be operating in a different context and put a different priority on their measures. Focus more on dialogue and sharing ideas about improvement.
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tip 163: When you sit down to review your performance measures, and you identify a list of improvement opportunities, how do prioritise them? Or do you try to do them all? To borrow from Stephen Covey [ref 22], which are the big stones and which are the pebbles? tip 164: Before you decide on any improvement activities, you will save heaps of time and drama if you clearly define the results you want to create first. Use sensory-based language [ref 14]to
paint a verbal picture of the outcomes you want as a result of improvement activity.
tip 165: Newtons Third Law states that for every action, there is an equal and opposite reaction. If you make a change to your business to improve it, where is the reaction going to come from?
Is it a reaction you want or one you dont want? Is it a reaction you can manage, or one better avoided? How can you improve performance in a way that minimises the inevitable unintended consequences?
tip 166: Unless your organisation checks to see if decisions made and actions taken have the desired effect on performance, your organisation will miss out on creating some very valuable knowledge about its own performance dynamics. Often the root causes of one performance
area are the same root causes of other areas if you find out how to fix them, this knowledge can be used elsewhere.
tip 169: Process mapping and analysis is a great way to understand the factors limiting the current capability of the system creating your performance results. It helps greatly to define the
system you intend to improve, before you try to improve it. Just type in process mapping and analysis in your web browser and go prospecting for resources!
tip 170: If you use statistical process control charts, then the current range indicated by the upper
and lower control limits (the voice of the process or limits of natural variation) compared to your target range is an indicator of your systems current capability. If the current control limits are within the target range, your system is capable, but if the current control limits are wider than the target range, your system is not capable. Unless something changes, you will continue to get performance results that randomly vary within your current control limits and thus some will fall outside your target limits. You will know when capability has changed when these control limits change.
tip 171: Always develop a range of improvement options and evaluate their feasibility
without judgement before making the final choice for what improvement actions to implement. Start wide, then get narrow. Its much harder to start narrow,then get wider when you discover your solution ideas just wont cut it.
tip 172: There are many improvement methodologies available, and one in particular has proven itself: six sigma. Made famous my Motorola, six sigma is a very structured and disciplined method of improvement which requires a very dedicated champion. Not for the light hearted.
More for those serious about real improvement.
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tip 173: If you involve the people who work in the process or area that you want to
improve when you are designing improvement solutions (or get them to do it themselves), you will get more ownership of the change. People hate having things done to them, we all like to be consulted and even better, involved.
tip 174: After deciding to implement a particular improvement action in response to a performance
measure signal, you may like to go back to phase 1 of the performance measurement process (select) and develop one or two new measures to provide regular feedback about how your improvement actions or strategies are going.
tip 176: Benchmarking is a useful source of information that can help you set targets for your performance measures. What is industry or worlds best practice for the process or result you want to set the target for? Does it make sense in the context of your industry or organisation? tip 177: Never set a target without being able to describe how the target will be able to be reached by the people responsible for reaching it. What strategies will increase current capability to
the desired level of capability? How will these strategies be implemented and resourced?
tip 178: Remember that target setting has the risk of driving behaviour toward achieving the target (funny, that). So make sure that achieving the target is only going to be good for your
organisation and not cause significant unintended consequences.
tip 179: When you are setting a target, involve the people that will participate in achieving
it. When we help create something, we care about it more.
tip 180: If you are writing goal or objective statements, a good recipe is:
the direction + the measure (optional: + the current level) + the target + timeframe. For example, decrease average debt recovery cycle time (from 69 days) to 29 days by June 2005.
tip 181: There is no reason to set a single, large-step target for your measures. It can often be more motivating if you set a series of staged targets that give you more managable milestones
to achieve which collectively work up to the ultimate target. For example, you might look for a reduction in average debt recovery cycle time of 5 days in the next 3 months, working up to a 10 days after 6 months, and then 40 days by 12 months.
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tip 183: Identify the various people you will need to bring together to form the performance measurement system design & implementation team. They will probably be a crossfunctional group of people with collective skills including strategic and business planning, data collection and management, data analysis and reporting, decision making, performance improvement, communications, change management and project management.
tip 184: Make sure you define THE BIG WHY to help others in the organisation feel that
performance measurement is worthwhile enough for them to give their time, energy and attention to. Start with their WIIFM (whats in it for me?).
tip 185: Because performance measurement is actually quite a big task, youll get greater gains if you assign an owner of your performance measurement system, someone who will facilitate the design and evolution and deployment of that system for your organisation as a whole. tip 186: Performance measures are essentially feedback, which people are inherently uncomfortable with (especially if it is honest feedback). To encourage people to be comfortable about feedback, it needs to be made compelling (they desperately want to use it because in some
way it links to what really matters to them), it needs to be safe to use and discuss it (such as no blame!), and they need to have the skills to use it effectively (such as valid interpretation and root cause analysis).
tip 187: If your organisation struggles with a blame culture (a common obstacle to effective performance measurement and management), one idea is to find a core group of people that can role model the behaviours of a non-blame culture. Help them define those behaviours (they may not be conscious of them straight away) and explore how to role model those behaviours and who to role model them for.
tip 189: Documenting your performance measurement process, that is, all the key steps associated with how your organisation selects, reports and uses performance measures in decision making, can bring consistency and efficiency to your performance measurement efforts. tip 190: Check the degree to which people understand how measures play a role in management in your organisation. You need much more understanding than just doing
measurement because the KPI column in your strategic plan needs to be filled in. Practice how you would describe to people the role that performance measurement takes in decision making, and what they as decision makers should be doing.
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tip 191: If your organisations performance measurement system was a scorching success, how would you know? Define the differences you are intending performance meausrement to
make in your organisation. Think about how you might measure the impact or outcomes that your performance measurement sytem has on your organisation. Refer to tip 192: through to tip 196: for ideas.
tip 192: List what people would be doing, or saying or feeling about it, if your
organisations performance measurement system was successful. This will help you recognise what impact your performance measurement system is having on people, and whether or not you need to manage that impact.
tip 193: List what skills or knowledge people would have in relation to performance
measurement, if your organisations performance measurement system was successful. This will help you recognise what kind of training might be required to ensure your performance measurement system actually will be used properly.
tip 194: List what people would be doing differently in relation to performance
management, if your organisations performance measurement system was successful. This will help you recognise what kind of what kinds of behaviour you want your performance measurement system to drive or encourage (and to not drive and not encourage).
tip 195: List what impacts it would have on business success or sustainability if your organisations performance measurement system was successful. Identify which processes could be more efficient or effective (such as decision making, strategic planning, performance improvement, and so on). tip 196: Describe what kind of return on investment you would expect it to deliver, if your
organisations performance measurement system was successful. Forecast or target the value it would create relative to the costs of implementing and maintaining it.
tip 199: Performance measurement is a process of feedback, and feedback takes a pivotal role in becoming a learning organisation. Integrate into your performance measurement project
some of the strategies associated with becoming a learning organisation, such as shifting mental models, developing shared vision, encouraging team learning, the skill of seeing the big picture as well as the detail, looking for patterns and root causes (as opposed to just symptoms) and so on. Peter Senge expands on these in his book, The Fifth Discipline [ref 8].
tip 200: Establish systems and processes for collecting the data you need for any indicators of success you might have designed (see tip 191: to tip 196:). Dovetail these systems
and processes into project activities so you dont forget to collect the data.
tip 201: Regularly (at least monthly) evaluate how the implementation is going, using any
indicators of success you might have designed (see tip 191: to tip 196:).
tip 202: Give time and space to really, truly learn from the feedback you collect during implementation, to improve subsequent implementation. In other words, live the process! What
credibility does a performance measurement implementation have, if it isnt designed and managed using the very principles and techniques it espouses?
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Tom Coens and Mary Jenkins, Berrett-Koehler Publishers, Inc., 2002 Performance appraisal is a system based on many assumptions and the fundamental dynamic that organisations are designed on a paternalistic model. Tom and Mary raise these assumptions one by one, discuss their limitations and relevance in todays world, and offer alternative assumptions about people and performance. [ref 2] Accelerated Learning
Colin Rose, Dell Publishing, 1985 Accelerated learning is a field based on leading edge discoveries about how the brain works and the application of these discoveries to the processes of learning. Many of the techniques are equally useful for how information can be communicated to make it more easily understandable, memorable and actionable. [ref 3] Analysis and control of variation
John McConnell, The Delaware Group, 1987 This is a thorough discussion of the meaning of variation, specifically in the context of business process improvement. Includes techniques such as Statistical Process Control charts. [ref 4] Approaching the Corporate Heart: Breaking Through to New Horizons of Personal and Professional Success
Margot Cairnes, Simon & Schuster Australia, 1998 As a leadership expert, Margot puts forward in this book a new way of thinking about personal and business success. She discusses and compares the two leadership approaches of the Hero and the Warrior and lays a path forward for the Heros Journey of compassion, awareness, soul, support and love (among other things). [ref 5] The Balanced Scorecard: Translating Strategy Into Action,
Robert S. Kaplan and David P. Norton, Harvard Business School Press, 1996 The famous book that marked the revolution of organisational performance measurement in the 1990s. [ref 6] Basic Business Statistics - concepts and applications 7th Ed.
Mark L. Berenson and David M. Levine, Prentice Hall Inc., 1998 This book goes into the theory of statistics in so far as it could apply in the business world. Specifically, it covers topics such as data collecting, summarising and presenting,
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probability distributions, sampling, estimation, hypothesis testing, analysis of variance, regression and forecasting. Recommended as a practical book about the technical subject of mathematical statistics. [ref 7] The Cartoon Guide to Statistics
Larry Gonick & Woollcott Smith, HarperResource, 1993 A book that actually makes learning and applying statistics entertaining and interesting and engaging! Dont be daunted by the idea of cartoons the book very successfully explains and demonstrates statistical concepts such as probability, sampling, confidence intervals, hypothesis testing and regression. [ref 8] Dialogue: And the Art of Thinking Together
William Isaacs, Doubleday, 1999 Without true dialogue (different to discussion and debate), its virtually impossible to reach the best outcome for everyone, particularly for such contentious issues as performance. Dialogue means going beyond win-win, to something higher and more valuable to everyone involved. William provides some really practical perspectives on how to have great dialogue, including topics such as listening, respecting, suspending, voicing, traps to look out for, and considerations in creating the time and space for dialogue. [ref 9] The Fifth Discipline: The Art & Practice of the Learning Organisation
Peter M. Senge, Random House Australia, 1992 Systems thinking permeates this entire book. It is filled with concepts and techniques that enhance the capability of an organisation to think systemically, and to continually learn. Performance measurement is one of an organisations feedback mechanisms, and thus takes a pivotal role in the learning process. This book, although not explicitly, helps to set performance measurement into the broader context of organisational learning. [ref 10] The Fifth Discipline Fieldbook Peter Senge, Art Kleiner, Charlotte Roberts, Richard B. Ross, Bryan J. Smith, Nicholas Brealey Publishing, 1996 This takes the ideas from Peter Senges book The Fifth Discipline and shows practical ways of applying them. Many of them are great to use in developing performance measures. [ref 11] Graphing Statistics and Data: Creating Better Charts Anders Wallgren, Britt Wallgren, Rolf Persson, Ulf Jorner, Jan-Aage Haaland, SAGE Publications, 1996 A more technical and specific and detailed look at graphs than is this book. A wider variety of charts are presented, which will help to expand your choices in presenting your data. [ref 12] The Haystack Syndrome: sifting information out of the data ocean Eliyahu Goldratt, North River Press, Inc., 1990 This book describes a simple framework for measuring the success of any business through three key concept measures of Throughput, Operating Expense and Inventory. These concept measures can apply to much more than just production line businesses. [ref 13] How to Lie With Statistics Darrell Huff, Penguin Books, 1991
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A tongue-in-cheek discussion about the ways to abuse statistics to attain devious ends is the entertaining approach taken by this book. It contains lots of examples and is easy to read. [ref 14] Introduction to the Practice of Statistics second edition David S. Moore & George P. McCabe, W. H. Freeman and Company, 1993 A fairly straightforward guide to the most commonly used statistical techniques for summarizing, exploring, explaining and predicting with performance data. [ref 15] Introducing Neuro-Linguistic Programming Joseph OConnor & John Seymour, Aquarian, 1990 Neuro-Linguistic Programming is a set of ideas and techniques that describe patterns of excellence. Many of these are incredibly useful in developing performance measures, as well as simply becoming a better communicator and learner. [ref 16] Leadership and the New Science: Discovering Order in a Chaotic World Margaret J. Wheatley, Berret-Koehler Publishers, Inc., 1999 Margaret has a very impressive background in many fields, particularly management consulting and change management. In this book she draws on ideas from quantum theory (yes, the physics topic of quantum theory) to open up our thinking to simpler and more effective ways of leadership that emulate the natural order of things around us. [ref 17] The Makeover Book Roger C. Parker, Ventana Press, Inc., 1989 The focus of this book is about designing the layout of documents and such, but beware of the section on graphs and charts: the emphasis is on visual interest as opposed to decision making and problem solving. [ref 18] Making Graphs Useful Stacey Barr, self published e-book available at http://www.staceybarr.com/mgu.htm Introduces five principles that make graphs useful for decision making and demonstrates the application of those principles with illustrated before and after examples and many specific tips to apply when creating or redesigning graphs. [ref 19] The Mind Map Book Tony Buzan with Barry Buzan, Dutton Mind mapping is a concept of how to organize information visually and spatially to enhance its usefulness to our brains. Doesnt this sound like useful knowledge for the design of performance reports? [ref 20] The Non-Designers Design Book Robin Williams, Peachpit Press Inc., 1994 Lean about designing documents, books, newsletters, memos, letters, advertising, computer printouts (and perhaps even graphs) by following four basic principles for visual presentation. This book is strongly recommended for taking your graphs and performance reports to a heightened level of professionalism. [ref 21] The Performance Prism Andy Neely, Chris Adams and Mike Kennerley, Prentice Hall, 2002
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Beyond the Balanced Scorecard is this new framework for deciding what to measure. It is based on the premise of managing stakeholder relationships has five perspectives: Stakeholder Satisfaction, Stakeholder Contribution, Strategies, Processes and Capabilities. [ref 22] The Rise of Statistical Thinking 1820 to 1900 Theodore M. Porter, Princeton University Press If you are fast developing a fascination or even obsession with statistical mathematics, then dont pass this book by! It is an interesting tale of the history of statistics and statistical thinking, exploring its mathematical evolution from its roots in social science. Not a technique book, more an interesting insight into where the field of statistics came from and why. [ref 23] The Seven Habits of Highly Effective People Stephen Covey, The Business Library, 1989 This book is likely to offer some great insights into what aspects of organisational performance are of most importance to us and other people, to make performance measurement more human and less obligatory. [ref 24] Statistics for Management 7th edition Richard I Levin, Prentice Hall International, 1997 Statistical methods for management contexts, including tables and graphs, frequency distributions, variability, probability, sampling, estimation, hypothesis testing, etc. [ref 25] Statman One: average and range charts Alan Long, Statman Publishing, 1989 A cartoon guide for how to construct and use process control charts, one of the best tools for analyzing, presenting and interpreting performance measures. Great book. [ref 26] Statman Two: process capability Alan Long, Statman Publishing, 1990 A cartoon guide for extending the application of process control charts to measuring and improving process capability. Also a great book. [ref 27] The Strategy Focused Organisation Robert S. Kaplan and David P. Norton, Harvard Business School Press, 2000 Extending on their original work with the Balanced Scorecard [ref 5], Kaplan and Norton expand more on strategy formulation in this book. They discuss strategy mapping, which is a great concept for mapping out the outcomes you need to measure. [ref 28] Understanding Variation: They Key to Managing Chaos Donald Wheeler, SPC Press, Inc., 1993 An excellent, excellent book for explaining the consequences of not understanding variation in the business world. Dr Wheeler uses many examples familiar to all of us to explain what variation is and why it matters in interpreting business performance particularly trends. Please read this book! [ref 29] The Visual Display of Quantitative Information Edward R. Tufte, Graphics Press, 1983
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Edward Tuftes rich and entertaining approach to demonstrating techniques of visual display is astounding. When you have finished using this book as an essential guide to designing graphs and performance reports, dont put it back in the bookshelf put it on the coffee table for all to enjoy. [ref 30] Visual Explanations Edward R. Tufte, Graphics Press, 1997 I love Edward Tuftes books. They are brilliant almanacs of the use of visual techniques to communicate quantitative information. He discusses in an early chapter of this book displays of evidence for making decisions, very useful background information if you are designing reports that decision makers will use.
on the internet
[ref 31] OPM A System for Organisational Performance Improvement A.F. Chennell, S. B. Dransfield, J. B. Field , N. I. Fisher, I. W. Saunders & D. E. Shaw http://www.cmis.csiro.au/opm/publications/PDF/Cambridgefinal2000.pdf This is an article that explains how OPM, one of the newer organisational performance measurement frameworks, works. It is based on the premise of delivering value to stakeholders. [ref 32] EFQM Excellence Model European Foundation for Quality Management http://www.efqm.org/model_awards/model/excellence_model.htm Many organisations use this framework as a model for measurement. Try also the Australian Business Excellence Framework or the Malcolm Baldrige Award framework. [ref 33] ABEF: the Australian Business Excellence Framework Business Excellence Australia http://www.aqc.org.au/GROUPS/ABEF/ Many organisations use this framework as a model for measurement. Try also the EFQM Excellence Model or the Malcolm Baldrige Award framework. [ref 34] Malcolm Baldrige Award framework National Institute of Standards & Technology http://www.quality.nist.gov/Criteria.htm Many organisations use this framework as a model for measurement. Try also the EFQM Excellence Model or the Australian Business Excellence Framework. [ref 35] Pegasus Communications http://www.pegasuscom.com For loads of tools and techniques that support the learning organisation and systems thinking, such as causal loop diagrams, shared vision, mental models and team learning, this is a great site to visit. Many of these tools and techniques make performance measurement more meaningful to people, and even bring a bit more commonsense into the process.
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