Written by

Bernard Marr

Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity. He is a best-selling author of 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations. He has over 2 million social media followers, 1 million newsletter subscribers and was ranked by LinkedIn as one of the top 5 business influencers in the world and the No 1 influencer in the UK.

Bernard’s latest book is ‘Business Trends in Practice: The 25+ Trends That Are Redefining Organisations’

View Latest Book

Performance management- the measurement trap (part 2)

2 July 2021

Performance Management: only measuring what is easy to measure

Also, too many organizations are making the mistake of only measuring everything that is easy to measure. For example, they often tend to focus on efficiency measures with the hope that these would somehow equate to customer satisfaction or better financial performance. However, it has long been established that it is dangerous to measure one thing while hoping to achieve another. It is important to remember that measures focus our attention and drive behavior.

A classic example of this performance management trap comes from call centers, where measures such as number of calls and call duration are automatically produced by the system and therefore easily reported. The result is that because they are measured and reported people assume that they are important and relevant metrics for the business. This is all okay until we find out that front line agents continuously transfer customers or even cut them off to meet their measures – while the efficiency targets are being achieved, customer service and with it overall performance is not. Call centers, like most departments and business units, are rarely detached operations with a solitary goal of driving down costs. They are integral parts of organizations and their service or product offerings. Therefore, performance measures need to reflect the strategic direction of the entire organization. To avoid the measurement trap organizations need to put efficiency measures into the context of overall performance. This can only be achieved by clearly understanding the strategy of the organization.

As outlined above, strategy for today’s performance orientated organizations involves not just the management of corporate objectives such as shareholder value but also an understanding of how this can be delivered. Measures have to be developed for the customer value proposition, the core competencies, and the underlying resources. These then become leading indicators for future performance and important components of strategic performance management. One of the problems is that many of these leading indicators are intangible in nature and therefore intrinsically difficult to express in simple metrics. When it comes to concepts like intellectual capital, reputation, or organizational culture it is impossible to ‘measure’ those in a traditional measurement sense. The reason for it is that the word measure is often associated with accounting and mathematics. It therefore works in the simplified world of financial numbers, where we can clearly define things and then reduce them to a number. However, businesses operate in a social context that is more complex and we therefore have to realize that by measuring things we will only capture part of the reality behind it.

Data Strategy Book | Bernard Marr

Related Articles

How To Set SMART Goals To Help You Succeed | Bernard Marr

How To Set SMART Goals To Help You Succeed?

When I work with companies, one of the things I do is help them establish goals that will give them the best possible chance of success [...]

What Skills Are The Most Needed Right Now | Bernard Marr

What Skills Are The Most Needed Right Now?

The annual Coursera Global Skills Report helps leaders and [...]

OKR vs MBO: What is the Difference?

MBO (which stands for “management by objectives”) has been a […]

Balanced Scorecard Part 1: A Brief History

A short look at the development of the balanced scorecard […]

Performance management- the measurement trap (part 3)

Performance Management and the limitations of measurement Performance management relies […]

The 10+ Most Important Job Skills Every Company Will Be Looking For In 2020

As the world evolves to embrace the 4th industrial revolution, […]

Stay up-to-date

  • Get updates straight to your inbox
  • Join my 1 million newsletter subscribers
  • Never miss any new content

Social Media

0
Followers
0
Likes
0
Followers
0
Subscribers
0
Followers
0
Subscribers
0
Followers
0
Readers

Podcasts

View Podcasts