Metrics started in the early twentieth century as part of the scientific management movement. The belief at that time was that people could be made more efficient by measuring the time it took to do work. Although this philosophy sometimes treated workers as machines, it did point up the need to quantify work outputs as a way of improving them. More modern efforts at measuring work have centered on the idea that organizations must report reliable effectiveness data. Rather than viewing workers as machines however, companies are realizing that their human resources are their most valuable resources in achieving outstanding results and, therefore, should be cultivated and developed in order to grow and enrich the organization.

Why Do You Need Metrics?

What if we didn't have metrics? Just as people sometimes have a tendency to do, organizations often operate on gut instinct or feelings. Our experiences help us gauge the world around us, but our senses are not 100% reliable. Look at the familiar optical illusion below. Most of us know that the center line segments of each figure are the same length. Yet, our brains send us nagging signals that they are not. We feel uneasy about our conclusion until we get a ruler and measure the lines.

 

It is the same way in business. As in Figure 1, we can be mistaken in our perceptions unless we measure. However, in business, a decision based on an inaccurate conclusion can be costly. If we choose the wrong vendor, identify incorrect stakeholders or fail to measure business results when they are achieved, we may waste time attending to ineffective activities or focusing on the wrong results. In the public sector as in the private, time wasted is money wasted. In this era of tight resources, our organizations cannot afford to waste either. Interestingly, there is a simple solution. By monitoring a few key business metrics such as those listed below, organizations can gauge their business results and can improve them.

• Focus — Your organization will become more efficient because it can focus on a few major measurements without being distracted. As a result, your management and employees will be clearer on what is important.
• Stronger Vision — Metrics provide insights that help organizations identify problem areas faster. Metrics also create a common language and common perceptions about issues. The organization can reach agreement more quickly.
• Decisions — Metrics provide a reliable basis for making business decisions. Data can convey a clear and compelling message about not only what is wrong, but also what must be done to fix it.

Metrics Framework

Begin

What Are Metrics Supposed to Solve/Resolve?

Organizations need a coherent way to tell employees how they are doing. Management must be able to report meaningful data on how the agency is performing against expectations. Legislators, taxpayers, citizen groups and other officials want to know how government is performing.

However, the public sector suffers from not having agreement about performance indicators. In the private sector, this is easy — it is profit and stock price (for publicly traded companies). In government, officials search for meaningful effectiveness indicators, but these vary widely by the nature of the agency. Consequently, what might matter most in one agency is not even on the table in another. Metrics help to resolve the issue of "What do we measure and report to demonstrate that we are doing the job?"

How Do You Know When Metrics Are Done Properly?

Metrics are effective if and only if they help tell a story. Imagine metrics as chapters in a book. Each chapter builds on the previous ones to tell a complete story. In the end, the reader knows the situation, what happened, who was involved and how things turned out.

It is the same way with metrics. If an organization has selected the right metrics, reporting these metrics will tell the stakeholders what the goals were, what happened, who was involved and what was the quality of the business results or outcomes.

How Many Metrics Do You Need?

Some organizations treat metrics as ice cream flavors: you can never have enough! If we reconsider this proposition, we realize that the organization should measure only the high-impact metrics — the precious few that tell the organization's story.

Consequently, the best advice is to resist the temptation to pile on metrics. Paring the number down to a few will help focus employees' thoughts and actions. The adage is "What gets measured gets done." If this is true, it is also worth considering that if the organization puts too many metrics into the mix, many will not get done well, if at all.

How Do You Prioritize?

• Define Your Goals — Make a list of business goals. Goals might include sales objectives, target profit margins, or success at signing up new customers.
• Define the Metrics — For each business goal on your list, write down a metric that will help you track your progress to success. For example, if your goal is signing up new customers, your metric might involve stating the number of meetings you will have per week with perspective customers.
• Benchmark Current Status — Now that you have established your metrics, you need to measure them. You must determine exactly how your business is doing, even if the truth is hard to swallow. By establishing the current value of each metric, you will be able to track your improvements in the future.
• Put in Place a System to Monitor and Report Metrics — You may need to add new business processes that will help you calculate and report your metrics. For example, if a large number of your customers view your customer service as being "excellent" , then you may want to survey your customers every month and ask them how you are doing to keep customer service on track . However, if customers rate your service as something less, a customer survey will identify weaknesses and help you improve service.
• Communicate Metrics to Employees — Once you've defined the key metrics that are important to your business, be sure to let your staff know. Then, everyone can make decisions that help improve the metrics.
• Review the Metrics and Make Decisions — With your metrics in place, you have greater insight into which strategies work and which don't. Review the metrics and take steps to improve your results.
• Promote Successes — When your metrics improve, let your staff know and reward everybody who helped make things better.

Metrics Best Practices

As you move toward using business metrics to manage and improve your business, follow these suggestions:

• Concentrate on only a handful of metrics that are necessary. It is important not to have too many metrics.
• Choose the right frequency of measurement. If you only measure a metric once a year, you may not get the information in time to take the necessary corrective actions.
• Reevaluate your metrics periodically. Your business priorities change over time, and your metrics will need to be modified accordingly.

HR vs. Organizational Metrics

Each agency must have operational metrics that quantify the organization's business results. Although these metrics vary by organization and line of business, they all are designed to measure how well the operational side of the agency is performing. On the other hand, human resources must have metrics as well. These metrics measure how well HR is helping managers to hire, motivate, develop and retain an excellent workforce to accomplish the goals. Both sets of metrics work in tandem to describe the business and people outcomes. Both are needed to tell the full story of how well an agency has performed.

A Peek Inside

In this part of the website, you will have access to tools that will help you to:

• Understand the metrics
• Select high - impact metrics
• Establish metrics standards
• Align metrics with business goals
• Develop insights from metrics
• Implement metrics in your organization
• Enhance metrics adoption
• Design and deploy dashboards and scorecards
• Evaluate your metrics program