Performance Measurement Processes Help You to Stay on Track!
By: Marlena Carlson, Colorado Applied Consulting, Inc.

A client of mine recently shared her feelings of  frustration about losing weight, despite implementing and sticking to a rigorous workout program with a personal trainer for a couple of months. Unfortunately, she hadn't weighed herself at the beginning of her program ("I knew I'd put on pounds but didn't want to know how bad it was, and my old home scale is really off!") and couldn't quantify whether she had been making progress towards meeting her goal.  She hadn't invested in a measurement process, in this case just a snapshot of her starting point, to monitor whether her "strategy" was on track.

In a business setting, measurement process problems can significantly impact the organization's ability to determine the success of its strategic direction.  How easily can you take a snapshot of your financial picture today?  Do you need to call your accountant to get a detailed P&L, for instance? Maybe it's at the touch of a button by opening Quickbooks, or maybe not... for example, are you missing key information because you haven't entered your expense receipts from last month's extensive travel and trade shows?  Even in a sole proprietorship, good reporting processes (which basically start with organization) are important because you have to know where you are to know where you need to go.    

In a good performance measurement process, inputs are made easy so that outputs (results) can be reliable and timely.  For example, small to large-sized businesses use credit cards to automate expense reporting by employees - minimizing the "brain damage" associated with the expense reporting drill and making sure expense reporting is up to date.  Systems and processes should also be scaled to fit your business need for detailed and timely financial data, whether it be a single quarterly P&L (supported by financial software on your PC)  or, a more complex situation such as hourly tracking of sales data from multiple locations (networked stations remotely communicating).

As organizations grow, effective tracking and reporting systems become even more important to measure and communicate progress to all the organization's stakeholders.  Make sure that your reporting systems are set up to track the appropriate level of detail required to support a business strategy before you implement.  For example, say your landscaping company decides to focus on improving profitability through promoting innovative and unique design features.  You should make sure your inventory and time tracking systems can capture the detailed costs of materials and time required to create these features!  This will give a clear picture to both you and your design team as to which projects are the most successful.

Don't forget the importance of investing in your reporting processes and systems - from basic organization to fully automated tracking - to support your strategic planning and implementation.  Maybe you aren't yet able to say "Aha, we've made it".  However, if you can demonstrate measureable progress towards your goals, this will go a long way in motivating you and your employees to continue the hard work needed to stay on track. 

(By the way, my client finally weighed herself, and after 2 weeks is excited to report she's lost 3 pounds!  She's now extremely motivated to continue on...)

"The best way to understand the dramatic transformation of unknown books into bestsellers, or the rise of teenage smoking, or the phenomena of word of mouth or any number of the other mysterious changes that mark everyday life," writes Malcolm Gladwell, "is to think of them as epidemics. Ideas and products and messages and behaviors spread just like viruses do." Although anyone familiar with the theory of memetics will recognize this concept, Gladwell's The Tipping Point has quite a few interesting twists on the subject.

The phenomenon continues to this day--think of how often you've received information in an e-mail message that had been forwarded at least half a dozen times before reaching you.  It seems inevitable that "tipping point," like "future shock" or "chaos theory," will soon become one of those ideas that everybody knows--or at least knows by name.