Fred's Blog

Management, Measurement and Common Sense

Everyone has heard the phrase "you can only manage what you can measure." Numbers, metrics and statistics are useful and important in every business. The key is to make sure that the 'what', 'how' and, most importantly, 'why' of your measurements and related methods makes sense.

The more a business focuses on numbers, the more those numbers tend to start 'saying what we want to hear.' I have always marveled at how numbers can be 'managed' - which can certainly contradict 'managing by the numbers.' If you are not using some measurement of results and progress in various areas of your business, you probably should be. If you are, then you should consistently re-evaluate the reasons, relevance and accuracy of your measurements along with your methods for obtaining them - e.g.:

• Is it still important to measure [your statistic here] - Do you make decisions based on this?


• Does that satisfaction survey represent an adequate cross-section of your customers (or types of interactions with your customers)?


• Are the questions inadvertently 'rigged' to give good feedback?


• Are your quality or on-time measurements valid (i.e. from the customer's perspective)?


• Have your staff performance review rankings become homogenized and predictable?


• Are your budgets and forecasts inhibited by pre-determined 'expectations' versus reality - or possibility?

I am all for management by measurement - when combined with common sense. And, as far as I am concerned, Common Sense is still king.

Tags:  Business Philosophy , Finance and Accounting , Operations

Posted: 2 October, 2007 Permalink | Comments (0)