The Advisor’s Corner – If I Don’t Measure, Can I Manage?

Question:

There are several axioms regarding measurement such as:

• What gets measured gets done.
• What gets measured and rewarded gets done well.
• If you can’t measure it, you can’t manage it.
• What gets measured gets managed.

Is it really true that if something is not measured it is not being managed? Not everything can be measured simply because of resource constraints and I would hesitate to assert that these areas subsequently suffer from management neglect. What are your thoughts?

StrategyDriven Response:

The short answer is no. Not measuring something does not necessarily equate to its not being managed. An organization’s limited resources dictate that only a finite number of activities can be directly measured; just as a manager’s limited available time prevents all activities from being directly monitored. But while these cliches do not represent an absolute truth, managers do need to recognize current realities in terms of defined future goals in order to possess the knowledge necessary to formulate their organization’s activities. Performance measures represent one very effective means of acquiring this knowledge on a routine basis with relatively minimal cost.

Therefore, a key manager responsibility is to identify those few performance measures that will best enable him or her to guide their organization in the achievement of the company’s mission goals in the most efficient manner possible. These measures must necessarily monitor the conduct of ongoing production work and support identification and implementation of improvement opportunities. Because an organization’s circumstances and the market environment change over time, the adopted performance measures will likely be changed and/or replaced over time.

Final Thought…

Since having no performance measures is not an option, the real challenge becomes determining what to measure in order to effectively manages while at the same time remaining within the organization’s constrained resource budget. Several StrategyDriven articles, podcasts, and whitepapers are dedicated to the topic of identifying the right performance measures including:

Articles

• Organizational Performance Measures Best Practice 1 – Vertical Cascading
• Organizational Performance Measures Best Practice 2 – Horizontally Shared
• Organizational Performance Measures Best Practice 4 – Core Performance Measures
• Organizational Performance Measures Best Practice 6 – Diverse Indicators

Podcasts

• StrategyDriven Podcast Episode 6 – Vertically Cascading Organizational Performance Measures, part 1 of 3
• StrategyDriven Podcast Episode 7 – Vertically Cascading Organizational Performance Measures, part 2 of 3
• StrategyDriven Podcast Episode 8 – Vertically Cascading Organizational Performance Measures, part 3 of 3
• StrategyDriven Podcast Episode 9 – Horizontally Shared Organizational Performance Measures
• StrategyDriven Podcast Episode 10 – Core Performance Measures
• StrategyDriven Podcast Episode 11 – Diverse Indicators

Whitepapers

• Organizational Performance Measures – Alignment
• Organizational Performance Measures – Selection

Lastly, it is important to recognize that the reverse is not necessarily true either; having performance measures does not necessarily result in a process or activity being managed or managed well. Performance measures are simply a management tool without which effective management is difficult.