Is your finger on the right measurement?
Process measurement is a crucial part of managing process performance. Organizations will usually take a range of measurements and will likely have targets for individual steps and activities as well as end-to-end processes. In a warehouse, a picker/packer may have an individual target for how long they take to pick and pack each order, yet there will also be a process-level measure on how quickly orders are processed, picked, dispatched and delivered. There may be another, higher-level measurement of the average cost of dispatching an order.
Process measurement is important, but a danger awaits the unprepared. With a plethora of data and information available it is extremely easy to get caught in an ‘analysis paralysis’ doom-loop, where there is so much to consider that it is hard to make a decision. This is a completely understandable pattern—after all, in most organizations there are so many things that can be monitored, it is very tempting to regularly measure and report on all of them.
Whilst it is certainly true that having a wide range of measurement data and information is useful, it is normally true that only a subset are useful for day-to-day process management. Focusing on key macro-level measures may indicate a problem which requires further diagnosis and leads us to examining other more detailed and specific data. By focusing on the macro-level indicators first, then ‘chunking down’ to more detailed data, we avoid getting bogged down in detail unnecessarily.
Imagine a patient in a doctor’s surgery—the doctor has a range of measuring equipment, and lots of data about the patient. Yet they will listen to the symptoms and focus on the most relevant measurements. If someone presents with symptoms of an ear infection, is there really any value in plotting their height over the last 20 years, just because the data is there? Certainly not, yet with process measures it is easy to inadvertently follow a similar pattern—getting bogged down in available (but less relevant) data, which inhibits our ability to respond quickly.
This ‘analysis paralysis’ can happen in situations where the only measurements considered are so inwardly focused, that the organization inadvertently loses touch with its external environment and its customers. By focusing on the micro-level measures, the organization inadvertently misses the much bigger macro-level opportunities, threats and changes. This is a dangerous position to be in, particularly in a fast-moving business environment.
Change is fast and constant: Keeping pace with the customer
It is often said that the external environment is changing very fast. Consumers are increasingly expecting quick responses and instant resolution of issues. Take e-mail as an example: I suspect most people reading this would expect a response to an e-mail within 24 hours or less. We expect instant responses to our ‘tweets’, and we’re unlikely to correspond by post. There is an increasing trend towards immediacy and, in most industries, it is no longer considered acceptable to keep a customer waiting weeks for a response. This, and many other external factors, affect all organizations, whether they choose to take notice or not. Competitors will move with the trends, and organizations that don’t keep up with customer expectations will get left behind.
It is important that we take these factors into account when considering how we monitor and measure processes. It is crucial that we regularly examine our external environment, scouting for potential opportunities and threats. In doing so we will better understand our customer needs and expectations, and understand when either of these things change. Executives and analysts in organizations will undoubtedly be responsible for this type of strategic work, but process measurement can be designed to trigger an early warning signal.
We might, for example, decide to sample and measure customer satisfaction at various parts of the process. If this starts to decline, and there are no obvious causes, this might be a warning sign that something unexpected and unseen has happened in the environment. Perhaps a competitor has emerged who is providing a better, cheaper or faster service (and this has raised expectations throughout the market). By building in these measures to our process, we build in the routine ‘probing’ of the environment. We cultivate a culture where we are ready to adapt and change.
Whatever measures we build in, it’s crucial that we avoid ‘analysis-paralysis’ and ensure that we monitor for changes in external factors, including customer expectations.