The 7 deadly sins of operational performance measurement
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The 7 Deadly Sins of Operational Performance Measurement. Barry Leahy. Introduction. Introduction to performance measurement The 7 Deadly Sins by Michael Hammer - How to avoid them! How to solve these issues Methods of measuring operational performance Conclusion.

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Presentation Transcript

Introduction
Introduction

  • Introduction to performance measurement

  • The 7 Deadly Sins by Michael Hammer

    - How to avoid them!

  • How to solve these issues

  • Methods of measuring operational performance

  • Conclusion


Operational performance measurement
Operational Performance Measurement

  • Measurement of key operations performed by a business/organisation

  • Manufacturing, customer service, marketing and procurement

  • Focus on key operations that are critical to your business

  • Measures include balanced scorecards, key performance indicators and digital dashboards


7 deadly sins
7 Deadly Sins

  • 1 -Vanity

  • Do not use measures that will inevitably make you or the organisation look good!

  • E.g. Company measuring delivery promise date success – should measure performance against customer request date – Bar set too low


7 deadly sins1
7 Deadly Sins

  • 2 - Provincialism

  • Do not let organisational boundaries and concerns dictate performance metrics

  • Do not measure too narrowly

  • Different organisational functions having conflicting metrics


7 deadly sins2
7 Deadly Sins

  • 3 –Narcissism

  • Do not Only measuring from own point of view

  • Include both internal and external factors

  • E.g. Do not measure how much stock is in a warehouse, measure how much is on the shelf.


7 deadly sins3
7 Deadly Sins

  • 4 – Laziness

  • Give adequate thought to choosing the right metrics

  • Only measure what is strategic and important; not what is easy to measure


7 deadly sins4
7 Deadly Sins

  • 5 – Pettiness

  • Focus on what is important to an organisation

  • Look at the broader picture


7 deadly sins5
7 Deadly Sins

  • 6 – Inanity

  • Do not implement metrics without giving thought to the consequences

  • People seek to improve metrics they are told are important, even if they have counter-productive consequences

  • Again – Think about what is important to the business!


7 deadly sins6
7 Deadly Sins

  • 7 – Frivolity

  • Not being serious about measurement in the first place

  • Arguing about metrics instead of taking them to heart

  • Finding excuses for poor performance instead of finding the root of the problem


How to solve these issues
How to solve these issues

  • Deciding what to measure

  • Focus on processes that create customer value across the whole organisation

  • Determine the drivers of enterprise results


How to solve these issues1
How to solve these issues

  • Measuring the right way

  • Precision

  • Overhead

  • Accuracy

  • Robustness


How to solve these issues2
How to solve these issues

  • Using Metrics Systematically

  • Metrics implemented must have individuals responsible and accountable for them

  • The point of measurement is not to measure, but to improve


How to solve these issues3
How to solve these issues

  • Creating a measurement-friendly environment

  • Embed a good perception of metrics within the culture of your organisation

  • Personal role modelling

  • Reward

  • Commitment


Balanced scorecard
Balanced Scorecard

  • Performance management approach that focuses on various overall performance indicators

  • Major units throughout an organisation often establishes its own scorecard

  • Four perspectives

    • Financial perspective

    • Customer perspective

    • Internal process perspective

    • Innovation and learning perspective



Key performance indicators
Key Performance Indicators

  • Measures or metrics used to help an organization define and evaluate how successful it is

  • Mainly involves result area, overall goal, measures and target

    - Result area - Customers

    - Goal - Reduce payroll customers complaints

    - Measure - Customer complaints

    - Target - 12% of sales


Digital dashboards
Digital Dashboards

  • Dashboards provide users with one single interface through which they can view information

  • Used by management to view KPIs that measure the performance of their company using specified metrics

  • Real time visualisation tools of critical business indicators that help in decision making



Conclusion
Conclusion

  • Only measure aspects that are critical to your business

  • Take performance measurement seriously and use it to improve the overall performance of your organisation

  • Set realistic goals and reward targets met successfully. This will boost morale and encourage a welcome environment for implementing metrics.


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