How to Measure the Performance of Performance Measurement

September 12, 2017 by Stacey Barr

Is it even possible to measure the impact of measurement? And if we could, why would we bother?

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It’s a tricky question, how to measure the impact of performance measurement. It’s like the concept of reflexivity, where there is somewhat of a circular relationship between two things:

  • can a scale weigh itself?
  • can a tape measure measure its own length?
  • can performance measurement measure its own performance?

And given that most of us struggle with measuring business performance, doesn’t it stand to reason that we’d struggle even more with measuring the impact of measuring business performance?

Meaningfully measuring how well we measure, when we don’t measure well yet, seems illogical.

One of my clients once asked me how I could prove that measurement is worthwhile. That’s a challenge, because to prove it, we have to measure it where it’s happening. And for most organisations, it either isn’t happening, or isn’t happening well enough to provide any good data about the ultimate benefits of it.

But the way we get better at measuring performance is the same way we get better at measuring the impact of measuring performance. It means following a logical procedure.

Firstly, what impact do we want measurement to have?

What results do we get from measuring performance, that we can’t get any other way? For me, there are three things specifically that measures contribute to the improvement of performance:

  1. Measuring speeds up the feedback we get about what works and what doesn’t, so we reach our goals sooner.
  2. Measuring has more objectivity than gut feel or hearsay, so we waste less effort doing things that really don’t help us reach our goals.
  3. Overall, when we measure, we get better returns on our time and resource investments to reach our goals.

There are certainly other benefits of measuring, but these seem to me to be the ultimate benefits.

Secondly, how could we quantify that impact?

All good measurement comes from clarity about results.
Without clarity, it’s hard to figure out what we’d count to form the measure. For the three results listed above, about the impact of measurement, it’s clear what we could count to form the measure:

  1. Reaching our goals sooner: if we counted the days or weeks to reach each of our goals, we’d be able to measure the goal achievement lead time.
  2. Reaching goals with less effort: if we counted the time and money spent to reach each of our goals, we’d be able to measure the goal achievement cost.
  3. Reaching goals with a higher return on time and resources: if we counted the value of the time and resources, and counted the value of the gap we closed in reaching the goal, we’d be able to measure the return on investment, or ROI.

If we tracked each of these measures before and after using performance measures of our goals, we’d see an improvement when we started to use performance measures of our goals.

(You might feel like your brain is bending back onto itself right about now. That’s the reflexivity problem: if we were already measuring how well we achieve our goals, we’d likely already have measures of our goals.)

Thirdly, what data do we need for these measures?

We have to start capturing the data about when we set each goal, when we achieve each goal, and how much time and money we spend achieving each goal. It can also help to capture the bottom-line impact, if we can, of achieving each goal. That makes the ROI measure (the third one listed above) possible.

So it’s certainly possible to measure the impact of performance measurement.

But the question remains: why would we bother?

Measuring the performance of your performance measurement isn’t something to try until:

  1. You have enough skill and time to measure the three suggestion measures of impact on goal achievement, above. AND…
  2. You are prepared to start measuring these BEFORE you implement proper performance measures for your goals, so you can observe the impact of those proper performance measures.

My guess is that doing this is not likely to happen in the majority of organisations. If you have the wherewithal to do that, you will probably just put the effort into performance measures for your goals. And trust that measuring performance well is better than not measuring it at all.

The impact of good performance measures is to achieve our goals sooner and with less effort.
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DISCUSSION:

Do you think it’s possible – or even meaningful – to measure the impact of performance measurement?

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  1. Dr Sanjay Kumar says:

    Hi Stacey,

    A nice response to Ines query: compact and clear.

    Now, to answer your query:

    DISCUSSION:

    Do you think it’s possible – or even meaningful – to measure the impact of performance measurement?

    I made this the topic of my PhD Dissertation. I started work on it in 2010, and submitted my Dissertation Report in 2014. in 2015, I was awarded the PhD by Delhi University.

    And before 2010, I was in the Corporate World from 1977 to 2007. Worked with Unilever (visited Australia in 1984) and ArcelorMittal. Took premature retirement, after 3 years as a CEO, to work for my PhD.

    So, my views are from a mix of Corporate responsibilities focused on delivering performance to academic study of the ‘why’, ‘how’ and ‘how to’ of delivering a performance measurement system that adds value.

    Having done all that, I took a sabbatical for two years, and enjoyed travelling with my wife. And now, am again inclined to do something with all the knowledge and wisdom that I have acquired.

    So, lets be in touch!

    Regards,

    Dr. Sanjay Kumar

  2. I think the old adage “what gets measured gets managed” speaks for itself.

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