Actionable Performance Measurement

Marvin T. Howell

Description

Measurement is absolutely essential for any organization or company, functional area, department, business unit, project, or individual. Companies must know how their processes are performing, how well they are meeting customers’ needs, how targeted improvements are being achieved, and how management is doing. Accurate performance measures tell companies where they are, and to take action if they are not on track or if performance does not meet expectations.Actionable Performance Measurement presents many different methods to help readers develop metrics and performance measures. To aid in corporate measures development and strategic, tactical and/or business planning, a quick and effective method of identifying specific key results areas is outlined and explained. Both customer and employee focuses are presented: how to measure each, and how to develop good surveys. In addition, Howell explains several methods for setting realistic-but-stretch targets, as well as a technique for measuring “apples and oranges.”Readers will be able to measure employee and customer satisfaction, and be prepared to capably lead or be a member of a corporate or business unit measurement team to assess existing performance indicators effectiveness.Included is a student workbook to be used as a teaching tool in conjunction with the books.

Sujets

• Business
• Qualité, hygiène, sécurité, environnement
• Sciences formelles
• Mathématiques appliquées
• Mathématiques appliquées
• Techniques
• Automatisation et Contrôle
• Contrôle des processus
• Automatisation
• Automate
• Sciences et techniques
• Metrology
• Measurement
• Mathematics
• MSA

Informations

• Publié par: ASQ Quality Press
• Date de parution: 30 juin 2005
• Nombre de lectures: 0
• EAN13: 9781636940687
• Langue: English
• Poids de l'ouvrage: 3 Mo

Extrait

Actionable Performance Measurement

Also Available from ASQ Quality Press:

Measurement Matters: How Effective Assessment Drives Business and Safety Performance Brooks Carder and Patrick Ragan

Performance Measurement Explained: Designing and Implementing Your State-of-the- Art System Bjørn Andersen and Tom Fagerhaug

The Path to Profitable Measures: 10 Steps to Feedback That Fuels Performance Mark W. Morgan

The Process-Focused Organization: A Transition Strategy for Success Robert A. Gardner

Healthcare Performance Measurement: Systems Design and Evaluation Vahé A. Kazandjian and Terry R. Lied

Linking Customer and Employee Satisfaction to the Bottom Line Derek Allen and Morris Wilburn

Process Quality Control: Troubleshooting and Interpretation of Data, Fourth Edition Ellis R. Ott, Edward G. Schilling, and Dean V. Neubauer

Managing with Conscience for Competitive Advantage Pete Geissler

To request a complimentary catalog of ASQ Quality Press publications, call 800-248-1946, or visit our website at http://qualitypress.asq.org.

Actionable Performance Measurement

A Key to Success

Marvin T. Howell, P.E.

ASQ Quality Press Milwaukee, Wisconsin

American Society for Quality, Quality Press, Milwaukee 53203 © 2006 by Marvin T. Howell All rights reserved. Published 2005 Printed in the United States of America

12 11 10 09 08 07 06 05 5 4 3 2 1 Library of Congress Cataloging-in-Publication Data Howell, Marvin T., 1936– Actionable performance measurement: a key to success / Marvin T. Howell. p. cm. Includes bibliographical references and index. ISBN 0-87389-664-5 (pbk. : alk. paper) 1. Organizational effectiveness—Measurement. 2. Performance—Measurement. 3. Total quality management. 4. Performance standards. I. Title.

HD58.9.H69 2006 658.4013–dc22

ISBN-13: 978-0-87389-664-1 ISBN-10: 0-87389-664-5

2005020443

No part of this book may be reproduced in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.

Publisher: William A. Tony Acquisitions Editor: Annemieke Hytinen Project Editor: Paul O’Mara Production Administrator: Randall Benson

ASQ Mission: The American Society for Quality advances individual, organizational, and community excellence worldwide through learning, quality improvement, and knowledge exchange.

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To place orders or to request a free copy of the ASQ Quality Press Publications Catalog, including ASQ membership information, call 800-248-1946. Visit our website at www.asq.org or http://qualitypress.asq.org.

Printed on acid-free paper

To my wife Jackie, Administrative Assistant Nancy Sharp, Air Force Civil Engineering, Florida Power and Light Company, JUSE Counselors, and my past Quality Clients.

Contents

CD-ROM Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x List of Figures and Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv List of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii

Chapter 1

Chapter 2

Chapter 3

Introduction to Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.3 A Metric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.4 Importance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.5 Characteristics of Good Metrics . . . . . . . . . . . . . . . . . . . . . . . . 4 1.6 Malcolm Baldrige National Quality Award Criteria, Deming Prize Criteria, and ISO 9000 Management System . . . . . . . . . . 6 1.7 Types of Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.8 Different Levels of Organization May Have Same or Different Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.9 Beware Indicators Can Be Manipulated and Misused . . . . . . . . 12 1.10 Failure Modes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1.11 Lean Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Management by Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2.3 Metrics-Based Management System/Organizational Planning and Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.4 Strategic Planning, Alignment, and Linkage . . . . . . . . . . . . . . . 19 2.5 BOATS (Business Objectives Attainment Tracking System) . . . . 28 2.6 Performance Based Budgeting (A Different Twist to Strategic Planning) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Metric Development Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 3.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

vii

viiiContents

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

3.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 3.3 The Process for Developing Strategic Metrics . . . . . . . . . . . . . . 45 3.4 The Process of Developing Performance Indicators, Project Indicators, and Other Measures . . . . . . . . . . . . . . . . . . . . . . . . 48 Constructing the Indicator Graph and the Metric Package . . . . . 73 4.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 4.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 4.3 Air Force Metric Package . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 4.4 Operational Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 4.5 Constructing the Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 4.6 Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 4.7 Graph Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 4.8 Plotting Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 4.9 Presentation Format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Set Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 5.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 5.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 5.3 What Is a Target? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 5.4 Procedure for Setting Targets . . . . . . . . . . . . . . . . . . . . . . . . . . 88 5.5 Target Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 5.6 A Team Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 5.7 Case 2: A Strategic Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 5.8 Six-Sigma Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 5.9 Obtaining “Buy-In” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 5.10 When to Get Rid of an Existing Performance Indicator . . . . . . . 110 5.11 Training/Implementation Plan . . . . . . . . . . . . . . . . . . . . . . . . . 110 Monitor and Take Action: Tools to Improve Your Process Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 6.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 6.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 6.3 Monitor and Determine Actions . . . . . . . . . . . . . . . . . . . . . . . . 114 6.4 Seven-Step Problem Solving Process . . . . . . . . . . . . . . . . . . . . 114 6.5 The Key Tools/Techniques for Problem Solving . . . . . . . . . . . . 117 6.6 An Example of the Problem-Solving Process . . . . . . . . . . . . . . 129

Business Processes: Measuring and Jump-Starting Daily Work, and Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 7.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 7.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 7.3 Process Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 7.4 Process Example: Selling on eBay . . . . . . . . . . . . . . . . . . . . . . 137 7.5 Developing Metrics to Jump-Start a Process . . . . . . . . . . . . . . . 137 7.6 Selecting Indicators for Your Use: An Exercise . . . . . . . . . . . . . 144 7.7 Daily Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 7.8 Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

Measuring Apples and Oranges . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 8.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 8.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Chapter 9

8.3 8.4 8.5 8.6

Contentsix

One Indicator Required or Desired Instead of Many . . . . . . . . . 151 An Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Objectives Matrix Overview . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Customer Focus, Satisfaction, and Measurement . . . . . . . . . . . . . 159 9.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 9.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 9.3 Customer Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 9.4 Model for Measuring Customer Satisfaction . . . . . . . . . . . . . . . 161

Chapter 10 Employee Focus, Satisfaction, and Measurement . . . . . . . . . . . . . 185 10.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 10.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 10.3 Employee Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 10.4 Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 10.5 Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 Chapter 11 Designing and Implementing a New Performance Measurement System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 11.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 11.2 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 11.3 Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 11.4 System Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 11.5 Quick Guide or Test for New Performance Measurement System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Chapter 12 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 Appendix A Modified Nominal Group Technique . . . . . . . . . . . . . . . . . . . . . . . 203 Appendix B Brainstorming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Appendix C Assessment of An Existing Measurement System . . . . . . . . . . . . . 209 Appendix D Metrics Awareness Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . 213 Appendix E A Message to Leaders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231