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 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
  • 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.