Part 2 – If you can’t measure it, you can’t manage it

July 13, 2010
I just did a post on "If you can’t measure it, you can’t manage it."

I was thinking, I should have brought up what to do with these metrics. Often these metrics are used as part of a Continuous Improvement Plan like in a Shewhart cycle (or sometimes known as the Deming Cycle).  A Shewhart cycle is Plan, Do, Check, Act (or PDCA).  In many ways it is just common sense.  If you want to improve a process, you should: 
  • Select the metrics you are going to measure
  • Benchmark where you are now
  • Align group and individual goals to what you are measuring
  • Clearly and transparently publish how the numbers are trending over time
  • Then use the metrics to improve processes and procedures
  • And start all over again (thus the "cycle" in "Shewhart cycle")

To me the most important part of the process is deciding "what should you measure?"  Be careful here, because this will effect behavior.  If you measure it and align goals to it, employees will work to improve it.  
  • So don't just measure and pay sales people based on total value of the deal.  They may sell a lot, but maybe not a lot of what is important to the business!  Set the bogey based on the value of deals of the products the company wants to invest in going forward. Or even better based on the profit of the deal (but I have never seen this done successfully).  
  • Don't measure just lines of code per week, but instead lines of code per week and the bug rate (bugs per 1,000 lines of code).  Or even better base it on functionality (function or feature points) and the bug rate.
  • The most important metrics for a consultant are probably billable hours worked in a year and customer satisfaction.  
So pick smart metrics that are truly important to the business.  Not just because "we've used them in the past."

So maybe the cycle should be: 
  • Very carefully select the metrics you are going to measure
  • Benchmark where you are now
  • Align group and individual goals to what you are measuring
  • Clearly and transparently publish how the numbers are trending over time
  • Then use the numbers to improve the processes and procedures
  • Validate you are measuring the correct metrics still
  • And start all over again (thus the "cycle" in "Shewhart cycle")
Note: And, before someone else brings it up, I will agree that not all things that are important to a business can be easily measured or, at the very least, the perceived return on the measurement may not be worth the investment…  Like I said common sense should rule…


%d bloggers like this: