Attributes of Good Measures

This is a portion of an article written by Harry Hertz from the Baldrige Performance Excellence Program. See the link at the end for the entire article.  As our Strategy Implementation Teams and our Baldrige application teams conduct their work, this information should be helpful.

Attributes of Good Measures

I believe there are nine key attributes of good measures, starting with the way results are scored in the Baldrige Criteria for Performance Excellence.

1. LeTCI (or let's see)—The acronym stands for levels, trends, comparisons, and integration. In the Baldrige scoring system, good measures must show the current level of performance on a meaningful scale. Good measures show how performance has trended over time on a time scale that is relevant to seeing changes in performance. Comparisons indicate how you are performing relative to key competitors, industry averages, and benchmark performance, as appropriate. Finally, integration demonstrates the extent to which your measures address important performance requirements and support organization-wide goals.

2. Measures should be comprehensive—They reflect a systematic approach to everything that is important to your organization's success. In the Baldrige results category, we look for product/service performance, customer-focused performance, operational performance (including workforce, leadership, and process performance, as well as ethical and legal compliance), and financial and marketplace performance.

3. Measures should be accurate and timely—Data are useless if they are inaccurate or not available soon enough to use them in decision making.

4. Measures should provide a basis for decision making—If the data and information are not informing decisions, you are probably not collecting the right information. Choice of top-level measures is critical, which is why it is the domain of senior leaders. A corollary to decision making is that key measures must also support decisions about resource allocation.

5. Measures should be strategic and operational—Measures need to address progress on strategic objectives and associated action plans. They also need to address ongoing operational performance. Measures need to address in-process performance, process output, and outcomes. Measures need to include leading and lagging indicators—those that predict future outcomes as well as those that track current performance.

6. Measures should be understandable—Users must be able to take action based on seeing the data. If the measures are very convoluted or abstract, they will not be useful.

7. Measures should be shared and cascaded—Data should be shared with your empowered workforce and suppliers and partners so that they can contribute to improvements and organizational success. Organizational-level measures should have counterpart or component measures at the business unit, divisional, and work unit levels. Measures can also cascade to individual employee scorecards.

8. Not all measures are numeric—Qualitative information is also important to an organization, including the perceptions of employees, customers, and your community. Qualitative information includes information on legal and regulatory compliance as well as financial audit performance.

9. Measures should be reassessed—Economic and competitive conditions change. Performance requirements change over time as well. Measures need to be scrutinized to see if a change is needed. If data are no longer providing any discriminating power between normal performance and outstanding performance, they need to be re-evaluated. While trend data are important, and speak to consistency in measures, you should not be locked in to no-longer-relevant measures.