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Editor's Note: In the new book "Faster Cheaper Better," BPM experts Michael Hammer and Lisa W. Hershman describe how organizations can transform themselves by improving how work gets done. In this two-part excerpt, the authors offer advice on "getting process metrics right." Here, Part I offers tips on defining and designing metrics, followed by a bonus list of process-measurement dos and don'ts. Part II explores pushing the envelope with process metrics by setting meaningful performance targets.

Deciding what needs to be measured, by connecting desired outcomes to process drivers, is something of a science. Deciding how to measure, however, remains an art, because as a rule there are many different ways of putting a number on a phenomenon that has been determined to be worthy of measurement.

For instance, how should customer satisfaction be measured? One common approach is through customer surveys. However, this is costly and slow, and it isn't clear how well customer responses on surveys correlate with desired behaviors. Measuring complaint volumes may not capture the full spectrum of customer attitudes and is subject to manipulation. Not answering the complaint line guarantees a higher reading of customer satisfaction. Measuring attrition and repeat buying comes too late to do anything about it.

The point is not that these or any other specific measures of customer satisfaction are good or bad, but that virtually every metric has some advantages and drawbacks. You have to design metrics with these considerations in mind:

Precision. A metric must be defined carefully and exactly so that there can be no doubt or dispute about it. Thus, "on- time delivery" can be interpreted in numerous ways, depending on what the target is (first promise date, last promise date, request date, etc.) and what it means to be "on time" (on the date, within 24 hours, within 48 hours, etc.). It should come as no surprise that when a metric is not unambiguously defined, people will interpret it in ways that work well for them. For instance, the manufacturing organization at a consumer goods company used an imprecise definition of productivity as an opportunity to take downtime and turnover time out of the equation. The definition of a metric should also include the units being employed and the range and scale of the measurement.


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