One Change at a Time

An organization’s performance and the environment in which it operates change dynamically. Subsequently, most measures reflecting these performance variables are also dynamic; challenging analysts to interpret historical and predict future movement. Altering what or how a given variable is measured or the manner by which the resulting data is manipulated introduces an additional complexity to the data analysis. Implementing more than one change to a performance measure further compounds this challenge; often making the resulting output difficult to explain, complicated to understand, and generally confusing to decision-makers. Therefore, when altering a performance measure, only one change should be made at a time.

High quality performance indicators provide decision-makers with accurate, easy-to-understand information on which to base their decisions. While changes to performance indicators seek to improve on this goal, the act of changing the indicator forces the leader to consider and understand the relevance of the change in information received with respect to his or her decision-making process. The more variables changed, the greater the complexity in understanding the information differences relative to the decision to be made and therefore the greater the risk of decision error. Thus, implementing only one performance indicator change at a time minimizes the decision-making challenge. Furthermore, the single change must be in place long enough for leaders to fully absorb and adjust to the new information being provided before another indicator change is made.

Performance Indicator Changes

Changes to performance indicators occur in the following ways:

1. data source changes
2. data collection method changes
3. data gathering device changes
4. data calculation changes
5. data weighting factor changes
6. performance indicator scaling changes
7. performance indicator formatting changes
8. performance indicator update frequency changes
9. performance indicator organization assignment changes
10. performance indicator development system changes

Final Thought…

Performance indicator consumers may have a difficult time recognizing an indicator change without the previous indicator as a reference. Therefore, it is often beneficial to provide both the new and old performance indicators for some period until the new measure is fully understood and adapted to by the organization.

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Enterprise Performance Measurement

We can work with you to assess and improve your performance measurement system; yielding metrics and reports that are operationally relevant, organizationally consistent, and economically implemented. The resulting system helps improve managerial decision-making, organizational alignment, and individual accountability. Learn more about how we can support your implementation and upgrade efforts or contact us for a personal consultation.