Developing Effective Performance Metrics in 7 Steps
1.
Q U I C K G U I D E
Developing Performance Metrics
Quick Tips:
• Start with a pilot project around one aspect
of your operations and a small set of users; myDIALS is a Software as a Service (SaaS) solution to help companies optimize operational
• Demonstrate value by providing metric performance by ensuring all employees have timely access to consistent, relevant and
visibility and analysis to improve results in actionable performance metrics. A precursor to implementing an operational performance
this area; optimization solution is determining what performance metrics will be used, and who should use
• Expand to additional users and other them to make better operational decisions.
operational areas;
Below is a high-level overview of a methodology that can be used to develop effective
• Start with “clean-enough” data to deliver
performance metrics:
consistent, actionable information – waiting
too long prolongs the time before value can 1. Align with the approach used to manage your operations:
be delivered. • By functional area (a traditional approach); or
• By business unit BU (typically focused on product or service delivery); or
Additional Help: • By value stream or business process (focuses on processes that add value to
customers).
Contact myDIALS for a special offer of a metric
workshop facilitated by myDIALS or a 2. Map your operations based on this approach:
myDIALS’ partner. • Utilize the organization chart for the various business functions; or
• Determine the operational resources, products, services and processes that make up
each BU; or
• Use Value Stream Mapping to lay out the various process steps that deliver value to
customers.
3. Identify where to focus for initial improvement initiatives
• Top-down if senior management requires visibility into operational performance; or
• Bottom-up if line managers and staff need better information to support operational
decisions; or
• A slice from top to bottom around a critical process, customer offering or operational
bottleneck
4. Utilize best practices for determining key performance metrics
• Small number associated with any one process, function or person;
• Relate Key Performance Indicators (outcome measures) and their associated Key
Performance Drivers (leading indicators and activities that affect outcomes);
• Determine appropriate goals, targets or best practices for each metric; and
• If you can’t answer the question of how will this metric be used to change behavior or
make an operational decision, you don’t need the metric.
5. Establish the context for each performance metric
• Define each metric unambiguously;
• Determine the formulae to be used to calculate compound metrics;
• Determine relevant dimensions for each metric; and
• Determine the most appropriate granularity for each dimension and time, as well as
the aggregation levels that make sense.
6. Identify who is primarily responsible for, and who should access to each metric
• Who is responsible for each outcome (KPI metric) for the primary dimensional
intersections?
• Who is responsible for the successful completion of activities or business process /
value stream steps?
• Who is responsible for a product or service offering? and
• Who requires oversight on these activities and outcomes?
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7. Determine each person’s metric and dimension member authorizations based on:
1-866-99DIALS +61 (0) 7 3118 5013 • The person’s job function and role;
(1-866-993-4257) • The processes they are responsible for; and
• Their scope of authority.
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