Performance measures are commonly used to track and improve our facilities operations. But some Facility Managers are not comfortable developing and using them. This presentation outlines some easy to understand ways to develop metrics that are useful. It will also examine ways that well-intended performance measures contribute to the wrong outcomes.

1. ...How to Develop Metrics That Matter
Presented to the Suncoast Chapter of IFMA
January 14, 2016
Presented by Bob Lambe
www.linkedin.com/in/lambe
This document can be shared for non-commercial purposes.
All content not noted otherwise is (c) RAL Location Strategies.

2. Background...
WHY THE INTEREST IN
METRICS AND KPI’S?

3. Performance Evaluation
• Performance metrics and KPIs continue to
surface as a topic of discussion.
– We all have scorecards for our performance and that
of our staff/providers.
– We all are interested in measuring those things that
can make a difference.
We are sometimes not clear how
these 2 things are related...

4. Information Overload
Every day, facilities managers get information
from a multitude of systems:
• Corporate finance systems
• Corporate HR systems
• Facility work order/CMMS
systems
• CAFM/CADD/BIM systems
• Project plans
• Equipment sensors
• Occupancy sensors
• Security systems
• Cameras
• Meter readings
• Spreadsheets
• Building Audits
• Equipment Alarms
• Building Automation
systems
• Energy Management
systems
• Email
• Text messages
• Online data services
• Industry publications
• Benchmarking reports
• Commissioning reports
• Social media
• Photographs
• Technical/design reports
• Regulations & standards
• Industry cost guides
• And more...
Metrics can help us cut thru the noise,
identify actions needed, and
detect things of interestThis multitude of data types is one of
the opportunity areas for “big data”
analysis in facilities management

5. http://www.theinvisiblegorilla.com/videos.html
42%
of viewers do NOT notice
the gorilla when focused
on counting the number of
passes.
We often do not notice unexpected things
if we are focused on something else.

6. Even Simple Metrics Can Be Useful
- 500 1,000 1,500 2,000 2,500
FACILITIES SERVICES - General Request
ELECTRICAL - Light Out/Lamp Replacement
FACILITIES SERVICES - Move Workspaces
FACILITIES SERVICES - Conference Room Setup
HVAC - Too Hot/Too Cold
HVAC - General HVAC Repair
HVAC - General HVAC Request
PLUMBING - Fixture Not Working
PLUMBING - General Plumbing Repair
FACILITIES SERVICES - Move Misc Items
FACILITIES SERVICES - Copier Service Request
Number of WR (Avg 19,650/Year)
RequestIssue(86TypesAvailable)
Top 10 WR Issues by Number of Requests
FY13 FY14 FY15
30% of
Demand
WO are
from these
6 Issues

7. FACILITY MANAGEMENT
METRICS THAT MATTER
From a White Paper of the Same Name...
Free download: https://ralstrategies.com/services-kpi.php

8. Let’s Start with the Basics...
TYPES OF METRICS

9. Metrics - Measurements
• Measurements are just
data:
– Cost
– Size
– Quantity
– Temperature
– Status
– Yes/No
– Time/Date stamp
Emergency work orders wrench time
last month
Total wrench time worked last month

10. Metrics - Indicators
• Indicators are typically total or
average Measurements:
– Total quantity work orders
– Average cost per work order
• Key Indicators are typically
relationships between Indicators,
and have a “target” range:
– % work orders completed by month

11. Metrics – Lagging (Results)
• Some metrics report past results
• Best used to report actual
performance and historical trends
– Number of emergency repairs as % of
total equipment work orders
– Hot/cold calls per building occupant
– Energy use by building by month

12. Metrics – Leading (Predictive)
• Some indicators used to suggest likely future
performance
– Projected equipment downtime based on condition index at
last service date
– Projected energy use by building based on weather forecast
• Some “real time” indicators used as proxy for leading
indicators
– Increase in hot/cold calls as measure of HVAC equipment
needing service

13. Can Organize Types in 2x2 Matrix
Results Indicator
Tells you what you have done
Performance Indicator
Tells you what to do
Key Results Indicator
Provides perspective on how you
have performed
Key Performance Indicator
Tells you what to do to increase
performance

14. • A future measurement is a forecast
• Forecast error is a metric, but it measures the accuracy
of the forecast and not the reality of the measurement
– Not a useful metric unless your business is forecasting!
We cannot measure the future

15. Useful Metrics Are Situational

16. Useful Metrics Change with Role
• CFO
– Facility Cost as Earnings per Share
• Facilities Director
– Operating Cost per Square Foot
• Building Manager
– Cost per Scheduled Work Order
• Building Engineer
– Which WO need to be done today?
Corporate Level
Strategic Level
Functional Level

17. A Matrix of Metrics?
More related to organizational objectives
More Key Indicators
More specific
Results and
Performance
Indicators
More immediate
(time sensitive)
Less
functionally
specific
Functionally
specific
Functional Role
OrganizationalLevel

18. CREATING BETTER METRICS

19. Goodhart’s Law
"When a measure becomes a target, it
ceases to be a good measure."
The Example of the Russian Nail Factory
When the government created targets of output for the
factory that were measured in weight, the result was that
the factory produced a small number of very heavy nails.
When the target was changed to the amount of nails the
factory produced a massive amount of only tiny nails.
Source: various internet sites, originally a joke or uban legend?
Image source: http://lesswrong.com/lw/1ws/the_importance_of_goodharts_law/

20. • One challenge with metrics is that we often
confuse process and performance, mixing up:
– Goals / objectives,
– Events / milestones,
– Activities,
– Critical Success Factors (CSF), and
– Key Performance Indicators (KPI).
• Goal: Safe workplace
• Event: Regular safety meetings
• Activity: Audits, Investigations
• CSF: Safety oriented culture
• KPI: Lost Time/OSHA Incidents

21. Establish KPI’s using KPQ’s
• Often we start with the data we have
and then figure out how to use it.
• It is better to start with the questions
that need to be answered to
accomplish our strategic objectives
– Our KPIs will be the answers
– Start with your organization’s scorecard
Strategic
Objective
KPQ
KPI
KPI
KPQ
KPI
KPI
KPI

22. Example KPQ’s
• Do our facilities provide a safe and productive
environment for customers and employees?
• How well do we react to spikes in service requests?
• Is our facility cost as low as it can be without
jeopardizing the building condition?
• Do we have qualified staff ready and willing to fill
vacancies when needed?
• Do our buildings perform (energy) as well as they
should?
• What sustainability investments would provide the
largest benefit per cost?

23. Design KPI’s To Answer The KPQ’s
A good KPI....
• Helps to answer one or more KPQ.
• Is based on relevant, available data.
• Provides actionable information for
the intended user.
• Is available on the required frequency.
Strategic
Objective
KPQ
KPI
KPI
KPQ
KPI
KPI
KPI
KPI Design Considerations:
1. Link to Strategy
2. Definition
3. Calculation
4. Purpose
5. Data Sources
6. Future Targets

24. Images source: http://en.wikipedia.org/wiki/Cockpit
We need to continue
improving our ability to
understand key
performance indicators
to effectively “pilot” our
organizations
Presentation of KPI’s can be Important
Airplanes are constantly off course, but
metrics help them reach desired destination.

25. Presentation Methods
Scorecards Dashboards Reports
Typically used for
tracking higher-level
KPIs on multiple topics
Typically real time info
on Indicators or KPIs;
Trend may be important
Typically used for
complicated lagging
metrics and analysis

26. Format Helps
Use Icons for Multiple KPIs
Stoplights are one way to
simplify large data sets.
• Use of graphics, even just color,
can help users more easily
understand the metric
Ineffective KPI Graphic
Does not assist the user in
understanding if action is required
More Effective KPI Graphic
Easy to understand current
position and desired position.

27. BAD METRICS
Dysfunctional Consequences and
Other Things That Can Go Wrong

28. Avoid Bad Metrics with
“Inversion Mental Model”
It is not enough to think about difficult problems one way. You need to think about
them forwards and backwards. "Indeed, many problems can’t be solved forward."
says Charlie Munger, the business partner of Warren Buffett and Vice Chairman at
Berkshire Hathaway.*
• Simply stated, applying the inversion mental model is to
start by avoiding bad solutions - avoiding stupidity is
easier than seeking brilliance.
• Here are 8 questions you can ask to determine if you
have a bad metric....
* Source: https://www.farnamstreetblog.com/2013/10/inversion/

29. Avoiding Bad Metrics
1. Is it Understandable?
2. Does it Reward the
Wrong Behavior?
3. Does it Conflict With
Another Metric?
4. What Does it Measure
(Mixed)?
5. Does It Matter
(To User)?
6. Does it Show Significant
Changes?
7. Does it Use Good Data?
8. Does it Need to Be
Measured?

30. What About Big Data?
It’s in the media, and
headed our way...
Big data in facilities:
• Energy use
• Various types of
sensors
• Everything else...
Images source: http://www.ey.com/GL/en/Services/Advisory/EY-big-data-big-opportunities-big-challenges

31. Some BI and Big Data Systems
And many more...

32. For more info...

33. www.linkedin.com/in/lambe StrategicFacilityGuide.com