Leadership Traps in Business Process Metrics Part 4

Posted by Sean McGrath on 3/23/16 10:35 AM

Creating a Culture of Variance Explanation

This series of posts has identified numerous leadership traps in the form of common misuses or misunderstandings of metrics.  In this post I’d like to touch on the power that can be harnessed within your teams by avoiding these traps and creating a culture of variance explanation.

Let’s start by thinking about how performance review meetings typically work.  Imagine a group of people talking about the performance of a given process or function.  On a big screen is a hot mess of a metrics dashboard.  Very few (if any) people understand how the metrics are calculated, if or how they relate to each other, or if they actually measure the performance of the process against its goals. 

People assume they know what a metric means simply from its name. 

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Leadership Traps in Business Process Metrics Part 3

Posted by Sean McGrath on 3/16/16 3:43 PM

Metrics Management Lessons Illustrated in a True Story

This series of posts has been all about the use of metrics in business.  We have looked at the purpose of metrics, and why it is so important to distinguish between Reporting Metrics (used primarily by leadership) and Operational Metrics (used primarily by front-line managers and individual contributors).  We also looked at a method of organizing metrics via root cause trees, to help differentiate Reporting from Operational Metrics, define relationships between metrics, and improve the speed of analysis.

In this post we will explore three other issues relating to metrics, which I believe represent some of the most common and most serious traps into which leadership can fall.  These issues have incredibly boring names which cause most people’s eyes to roll back in their heads.  I think this is why they get so little consideration, but they are absolutely critical.  If you are measuring processes or business performance and you ignore these three issues, you are in for a long, drawn out slide into mediocrity.  So instead of naming them (initially) I’ll tell a story. 

To borrow a line from Dave Barry – I swear I’m not making this up. 

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Leadership Traps in Business Process Metrics Part 2

Posted by Sean McGrath on 3/10/16 10:48 AM

Mapping Reporting and Operational Metrics with Root Cause Trees

In my last post, I wrote about Reporting vs. Operational Metrics.  Reporting Metrics measure business processes as trends over time. Operational Metrics are used at a much lower level to understand processes at points-in-time or on shorter time horizons.  I pointed out the relationship between the two categories:  When there is variance in a Reporting Metric, the analysis of that variance always takes place using Operational Metrics.

I also wrote about a common leadership trap that one can fall into when Operational Metrics are mistaken for Reporting Metrics – the resulting behavioral spiral which leads to poor and short-sighted decision making, micro-management of front-line managers, and distraction from strategic thinking.

In this post, I will lay out at a high level, the framework I’ve coached functional teams through to organize metrics for their areas based on root cause trees. 

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Leadership Traps In Business Process Metrics

Posted by Sean McGrath on 3/4/16 9:00 AM

Business Process Management Metrics - Part 1

Measuring the performance of a process is deceptively simple.  Processes are made up of three basic components:

  1. Inputs
  2. Actions taken on those inputs to change, add to, and modify them
  3. Outputs, which are created as a result

To measure the performance of a process, a leader has only to take the key areas of these three process components and measure them over time.

My experience is that most functional leaders and executives understand this high-level concept.  However, there are critical areas just under the surface that are tragically ignored, often to the detriment of business performance.  In this four part series of posts, I’ll highlight these and give real-world examples showing just how serious of a concern this is for anyone who designs, implements, or manages business processes.

At a high level, we can consider two very different categories of process metrics, each with a very different purpose – Operational Metrics and Reporting Metrics. 

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