Lean and Agile Performance Measurement Governance (Part 3)

This is the third and final installment of my series on Performance Measurement Governance. In my first part, I shared the challenges and root causes in the area of performance measurement. In the second part, I detailed considerations and best practices for identifying the right business metrics at different organizational levels. In this part, I will dive into the final key elements of this performance measurement framework — systemized metrics tracking and establishing a formal process & cadence for metrics reviews and controlling — and address associated challenges.

Systemized Metrics Tracking

Systemized data collection, calculating metrics, analysis, and publishing results are key elements of Lean and Agile Performance Measurement Governance..

Implementing a system that will create dashboards on a periodic basis or as-needed basis to sustain metrics tracking is essential. Assigning a dedicated person or a team to review the quality of data and publish the data is another best practice especially if an organization is less mature when it comes to performance measurement.

To start measuring right away, at regular intervals, it is useful to baseline performance prior to a major business transformation initiative (e.g., implementation of a new process or system) in order to measure success and sustain momentum. Also, the frequency and cost associated with capturing and communicating data, should not out-weigh the value of it.

Formal Process & Cadence for Metrics Reviews and Controlling

Formal process and cadence to help identify performance gaps and corrective actions to close those gaps (as well as to prioritize improvement initiatives and investments) should be in place. This element is crucial in anchoring the culture of measurement. Senior management should display their commitment for the review process and cadence. They should also use the metrics reviews as a venue to reward and acknowledge managers for the use of the right metrics and not reward managers who lack the discipline of using metrics. Review sessions should be held on a monthly basis for Tier I and Tier II metrics, and on monthly/weekly basis for Tier III metrics. Review meetings need to be scheduled and a format needs be published ahead of time. In addition, there should be an annual cadence to set targets for the metrics. Based on my experience I have run into several companies who have defined metrics but have stopped short from publishing targets and owners. Metrics with no target and owners means no skin in the game.

All key parameters of the metrics need to be determined like description, formula, baseline value, granularity, data refresh frequency, audience, delivery methodology, audit frequency, etc. Developing process playbooks (predefined corrective actions) when metrics targets are not achieved would help the organization to accelerate the adjustment and be more agile.

After reflecting on these findings and ideas, how do you view/assess your company’s performance measurement governance?

  4 Comments   Comment

  1. “Assigning a dedicated person or a team to review the quality of data and publish the data is another best practice”

    A great point. You need to have a set of human eyes at the wheel who can figure out what all this data “means.” Is it good, bad or indifferent? And what does that mean for your company?

    • thanks for the comments. I agree. Without ensuring the quality and relevance of the data, a people in the organization and outside start doubting it, which makes it difficult to convince managers to take ownership and establish accountability. This is why having dedicated people or team at the beginning of implementing performance measurement system is crucial.


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