This document summarizes Steve Stanton's webinar on measuring processes effectively. It discusses how organizations often measure the wrong things that do not improve performance. Effective measurement requires understanding how processes create value and support business goals. It also requires mixing leading and lagging indicators. The document outlines principles of process measurement and provides examples from companies like Hilti that developed process scorecards linked to strategic objectives and key performance indicators.

1. Measure
What
Ma+ers
Steve
Stanton,
Managing
Director
Webinar
August
26,
2015
For
more
informa8on,
go
to
fcbpartners.com
or
call
Lindsay
Field
617.245.0265

2. 1
©2015
FCB
Partners.
All
rights
reserved.
One
Underlying
Issue
“We
measure
far
too
much
and
get
far
too
li9le
for
what
we
measure
because
we
never
ar<culated
what
we
need
to
get
be9er
at
and
our
measures
aren’t
<ed
together
to
support
higher-­‐
level
business
goals.”
We
measure
the
visible,
the
easy,
the
familiar,
and
the
intui8ve,
rather
than
the
important

3. 2
©2015
FCB
Partners.
All
rights
reserved.
Why
Is
Process
Measurement
so
Difficult?
Requires
Deep
Insight
how
this
process
creates
value
what
this
process’s
customers
really
want
how
this
process
serves
the
organiza8on’s
strategy
how
this
process
connects
with
other
processes
intui8on
and
history
are
no
longer
enough
In
Addi8on
the
environmental
trifecta
of
complexity,
novelty,
and
speed
digi8za8on
provides
even
more
opportuni8es
we’re
now
entering
the
age
of
data-­‐driven
decision
making

4. 3
©2015
FCB
Partners.
All
rights
reserved.
Principles
of
Process
Measurement
The
primary
goal
of
measurement
is
not
to
measure,
but
to
improve
business
performance
Measurement
must
be
driven
by
an
understanding
of
causality
and
focused
on
what
you
can
control
Processes
are
where
strategy
becomes
opera8onal
Measure
as
liQle
as
possible
and
pilot
metrics
before
ins8tu8onalizing
Metrics
are
how
importance
is
communicated

5. 4
©2015
FCB
Partners.
All
rights
reserved.
A
Quote
to
Remember
“If
results
aren’t
improving,
then
you
must
be
measuring
the
wrong
things.”
In
the
footsteps
of
W.L
Bateman

6. 5
©2015
FCB
Partners.
All
rights
reserved.
Measurement
Language
The
Process
Scorecard
defini8on
–
the
few
vital
measures
needed
to
assess
performance,
progress,
and
opportuni8es
for
improvement
Key
Terms
lagging
indicators
that
tell
you
where
you’ve
been,
generally
outcome
metrics
used
for
repor8ng
leading
indicators
that
tell
you
where
you
may
be
going,
generally
in-­‐
process
metrics
that
illuminate
improvement
opportuni8es
key
metric
–
the
performance
aspect
worthy
of
measurement
baseline
–
current
performance
target
–
desired
performance

7. 6
©2015
FCB
Partners.
All
rights
reserved.
The
Process
Scorecard
Roughly
7
key
measures
(plus/minus
2)
plus
or
minus
2
requires
serious
discipline
Mix
of
leading
and
lagging
err
on
the
side
of
leading
One
or
two
per
cri8cal
stakeholder
and
manage
tradeoffs
Updated
frequently
and
communicated
oSen

8. 7
©2015
FCB
Partners.
All
rights
reserved.
APA Scorecard DPS PC Scorecard Page 3
Region NReg Zone Nor-E Site Durham Name Vaughn Report Period Mar99
Current Actual Current Perf Current
Performance Req'd for S2 Rating Yearend Performance Required for
S1 S2 S3 S4
Customer Service
%Customer Svc Orders On-time Site 98% 95% 4 94% 95% 97% 98%
%Repeat Customer Service Work Site 10% 16% 3 18% 16% 12% 10%
Reliability & Integrity
%SMEI Inspect Comp vs Plan Region 110% 93% 4 90% 93% 97% 100%
Business Expansion
Cost
Routine Outages $/outage Region 277 226 0 232 226 212 206
Customer Premise $/Order Region 57.58 31.21 0 31.82 31.21 29.99 28.76
Bus Expansion $/Cust Add Region 1,769 1,975 4 2,033 1,975 1,897 1,839
Workforce Effectiveness
Lost & Restricted Work Days Region - 56 4 300 225 175 100
SUMMARY - CURRENT SCORECARD PERFORMANCE 2.7
The Scorecard

9. 8
©2015
FCB
Partners.
All
rights
reserved.
Hil8’s
Measurement
System
Began
with
a
set
of
strategic
business
objec8ves
derived
from
the
corporate
strategic
plan
Iden8fied
11
enterprise
KPI’s
related
to
strategic
objec8ves
customer
sa8sfac8on,
profit
per
employee,
perfect
orders,
repair
cycle
8me,
etc.
some
process-­‐specific,
some
cross-­‐process
Translated
these
into
60
performance
drivers
drivers
of
KPI’s
or
more
detailed
outcomes
all
associated
with
specific
processes
e.g.,
complaint
solu8on
finding
8me,
complaint
solu8on
execu8on
8me,
open
complaints,
number
of
orders
per
customer,
etc.
Managing
process
around
these
drivers
cockpits,
design,
rewards
Source:
Hil<

10. 9
©2015
FCB
Partners.
All
rights
reserved.
Summary:
CSF’s
of
Process
Metrics
Focus
on
end-­‐to-­‐end
outcomes
and
performance
transcending
boundaries
Rigorously
derive
from
customer
needs
and
enterprise
goals
via
causal
model
Encompass
mul8-­‐dimensional
performance
goals
the
world
is
not
a
simple
place
Avoid
being
distracted
by
sub-­‐measures
the
case
of
the
airline
pilot
Create
universal
understanding
and
awareness
to
focus
people’s
aQen8on
Align
rewards
with
metrics
to
reinforce
them
Use
to
monitor
performance,
shape
behavior,
and
drive
change
making
abstrac8ons
concrete

11. 10
©2015
FCB
Partners.
All
rights
reserved.
FCB
Fall
2015
Courses
Event
Descrip8on
Process
Redesign
Hammer
Cer<fica<on
Course
Boston,
MA
September
15-­‐18
Reengineering
Innova8on
Advanced
Cer<fica<on
Course
Boston,
MA
September
16-­‐18
Process
Owners
in
Ac8on
Advanced
Cer<fica<on
Course
Boston,
September
16-­‐18
Power
of
Process
Hammer
Cer<fica<on
Course
Boston,
MA
November
16-­‐17
Leading
Transforma8on
Hammer
Cer<fica<on
Course
Boston,
MA
November
18-­‐20
Measurement
Excellence
Master
Class
Boston,
MA
November
18
For
more
informa8on
go
to
fcbpartners.com
or
call
Lindsay
Field
617.245.0265

12. 11
©2015
FCB
Partners.
All
rights
reserved.
For
More
Informa8on
FCB
Partners
Lindsay
Field,
Program
Director
617
245
0265
lfield@fcbpartners.com