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Identify the Measures First
“Not everything that can be counted counts, and not everything that counts can be counted.”
Albert Einstein
Awarded the 1921 Nobel Prize in Physics, named Time’s Man of the Century in 1999, and best known for his conception of the theories of special and general relativity
Organizations today seem to have a never ending supply of performance measures. Our data rich environment feeds the need of many managers to have all things counted. Yet as Albert Einstein suggests, not everything that can be counted matters. And just because something is counted doesn’t make it important. Thus, not everything that is measurable should be assigned its own performance indicator; rather only those things that are truly important, whether currently counted or not, should be measured. The identification of performance measures should therefore start with the identification of the key factors critical to the organization’s success.
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Additional Information
The following StrategyDriven articles and whitepapers provide additional information on the identification of those performance measures important to the organization’s ongoing success:
Articles
- The New Thinking on KPIs, part 1 of 4 by David Parmenter
- The New Thinking on KPIs, part 2 of 4 by David Parmenter
- The New Thinking on KPIs, part 3 of 4 by David Parmenter
- The New Thinking on KPIs, part 4 of 4 by David Parmenter
StrategyDriven Podcast – Special Edition
- An Interview with David Parmenter, author of Key Performance Indicators, part 1 of 2
- An Interview with David Parmenter, author of Key Performance Indicators, part 2 of 2
Whitepaper
Resource – Book
- Strategy Maps by Robert S. Kaplan and David P. Norton
StrategyDriven Podcasts focus on the tools and techniques executives and managers can use to improve their organization’s alignment and accountability to ultimately achieve superior results. These podcasts elaborate on the best practice and warning flag articles on the StrategyDriven website.
shares with us his insights and illustrative examples regarding:
David Parmenter is author of 
The value of organizational performance measures isn’t simply that they inform leaders and individual contributors of past and present state performance; rather, the power of performance measures comes from the actions they drive to improve future results. Therefore, organizational performance measures are most effective when they indicate when specific actions should take place. Predefined thresholds accomplish this objective.
The accuracy and subsequently the trustworthiness of organizational performance measures is founded on the quality of their underlying data. While performance measures are uniquely sensitive to changes in data, even the smallest error in data accuracy undermines a metric’s credibility if not its output.
Business Programs