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StatOrg Services LLC

Madison, Wisconsin

608-833-5948

Copyright © 2009
All Rights Reserved

 
Performance Measurement Services

"You get what you measure" -- whether it is really what you want or not. Therefore, it is extremely important to conduct adequate planning to define appropriate goals, metrics, targets, schedules, data collection processes, and analysis procedures. The goal of all this work is to raise the visibility of the important things that are happening in the organization -- now and in the future.

This is a brief description of the performance management services we offer and the benefits you can expect. Here is a Policy Paper on Performance Management for more information.

Balanced Scorecard

Key Benefits

  • You can see at a glance if you are working toward your goals effectively when we assist you in developing metrics that monitor performance outputs and outcomes
  • You can manage your enterprise by facts and data rather than intuition
  • You learn if your improvements are working or if you need to adjust your approach to achieve success

Capabilities

We are thoroughly versed in the balanced scorecard methodology and believe it can help organizations find the path to success in today's complexities. We also have many other tools to serve your needs.


Double-Loop (Output and Outcome) Feedback

In traditional industrial activity, "quality control" and "zero defects" were the watchwords. In order to shield the customer from receiving poor quality products, aggressive efforts were focused on inspection and testing at the end of the production line. The problem with this approach -- as pointed out by Deming -- is that the true causes of defects could never be identified, and there would always be inefficiencies due to the rejection of defects. What Deming saw was that variation is created at every step in a production process, and the causes of variation need to be identified and fixed. If this can be done, then there is a way to reduce the defects and improve product quality indefinitely. To establish such a process, Deming emphasized that all business processes should be part of a system with feedback loops. The feedback data should be examined by managers to determine the causes of variation, what are the processes with significant problems, and then they can focus attention on fixing that subset of processes.

The balanced scorecard incorporates feedback around internal business process outputs, as in TQM, but also adds a feedback loop around the outcomes of business strategies. This creates a "double-loop feedback" process in the balanced scorecard.

Outcome Metrics

You can't improve what you can't measure. So metrics must be developed based on the priorities of the strategic plan, which provides the key business drivers and criteria for metrics that managers most desire to watch. Processes are then designed to collect information relevant to these metrics and reduce it to numerical form for storage, display, and analysis. Decision makers examine the outcomes of various measured processes and strategies and track the results to guide the company and provide feedback.

So the value of metrics is in their ability to provide a factual basis for defining: Strategic feedback to show the present status of the organization from many perspectives for decision makers

  • Diagnostic feedback into various processes to guide improvements on a continuous basis
  • Trends in performance over time as the metrics are tracked
  • Feedback around the measurement methods themselves, and which metrics should be tracked
  • Quantitative inputs to forecasting methods and models for decision support systems

Management by Fact

The goal of making measurements is to permit managers to see their company more clearly -- from many perspectives -- and hence to make wiser long-term decisions. The Baldrige Criteria (1997) booklet reiterates this concept of fact-based management:

"Modern businesses depend upon measurement and analysis of performance. Measurements must derive from the company's strategy and provide critical data and information about key processes, outputs and results. Data and information needed for performance measurement and improvement are of many types, including: customer, product and service performance, operations, market, competitive comparisons, supplier, employee-related, and cost and financial. Analysis entails using data to determine trends, projections, and cause and effect -- that might not be evident without analysis. Data and analysis support a variety of company purposes, such as planning, reviewing company performance, improving operations, and comparing company performance with competitors' or with 'best practices' benchmarks."

"A major consideration in performance improvement involves the creation and use of performance measures or indicators. Performance measures or indicators are measurable characteristics of products, services, processes, and operations the company uses to track and improve performance. The measures or indicators should be selected to best represent the factors that lead to improved customer, operational, and financial performance. A comprehensive set of measures or indicators tied to customer and/or company performance requirements represents a clear basis for aligning all activities with the company's goals. Through the analysis of data from the tracking processes, the measures or indicators themselves may be evaluated and changed to better support such goals."


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Mission

To become the reliable and creative provider of the solutions enterprises need to increase their impact and achieve their goals. We help enterprises provide their customers with the quality and costs expected by working smarter, not harder.

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