Key Performance Measures – Cost, Action and Drive

It seems that almost every magazine and book on maintenance has a section on Key Performance Measures or Key Performance Indicators. Most of the articles provide a long litany of measures that are viewed as being useful in one way or another. While performance measures are important, the thoughtless application of long lists of them is counter-productive.

First, each and every measure has some cost associated with it. Even those measures that seem quite simple require the on-going collection and reduction of data, some form of attention and analysis and, finally, some form of response. If you were to perform a study of the total impact of each measure being used, you might be surprised to see how much each of them is costing your organization.

Second, each and every measure should be intended to stimulate a specific action. If a measure is only provided as a “feel good” device, there are other less costly ways to obtain a good feeling. A good way to view measures is to consider how the person viewing them will respond.

• If the viewer will not respond at all, he shouldn’t waste his time by viewing them.
• If none of the viewers are expected to respond in any way, they should not be posted and possibly not created.
• If a specific viewer is expected to take some specific action, the measure should be sent directly to him on an interval consistent with the anticipated response.
• If a large number of viewers are expected to respond in some specific manner, consider if it is reasonable to hold them accountable if the measure is only posted on some bulletin board and not sent directly to them.

Third, there is a saying that “Measurements Drive Results”. So it is important to analyze the specific results you wish to drive with your measures. Take, for instance, a measure that is intended to drive workforce efficiency. This measure might suggest the need for a workforce reduction or the re-distribution of the workforce to areas of greater need. Now consider the measure being used to drive those changes.

• Are the required changes clearly signaled by the measure or left to someone’s interpretation?
• Is the measure communicated to the individuals responsible for making changes in a timely manner?
• Do the individuals know specifically what actions they are expected to take in response to each possible result that is possible within the measurement system?
• Is there some mechanism for holding individuals accountable for making the proper changes quickly?

All too often measurement systems consisting of the long litany of numbers are simply “passive” measures. People see them, do not take action and are not really expected to take action.

Far better are “active” measurement systems where all individuals who receive reports know they are expected to stimulate a response and it is their role to take action.
Mixing “passive” measures with “active” measures is a mistake because it will become impossible to tell which is which. If some measures are provided for information only, soon all measures will be viewed as if they are for information only. This last point is the real problem with most measurement systems. They contain information upon which some individuals should act. When mixed with “information only” items or sent to individuals who are not responsible to take action, the impact is diluted.

Ultimately, no action will be taken or individuals will begin to believe it is someone else’s job to respond.
Well designed and properly directed measures can make a significant difference. Poorly designed measurement systems can tend to take the edge off even the most well-honed system.

This article has introduced the following concepts:

1. Key Performance measures
2. The cost of measures
3. Specific actions associated with measures
4. Driving results with measures
5. Active measurement systems
6. Passive Measurement systems

Readers who would like to comment on these issues or any other closely related issue, are invited to do so.