When many people start out looking for good KPIs and performance measures, they don’t realise that their opening question is a big part of the problem they have finding those good measures. They’ll ask, ‘how do you measure innovation?’ Or ‘how do you measure culture?’ They’re asking how to measure broad concepts, and that’s the problem.
We can’t measure broad concepts. We can only measure specific attributes about those concepts. That’s because most concepts are too complex to summarise with one or two universal measures.
You can’t measure innovation.
Do you want to measure innovation? Don’t bother trying. You’ll just brainstorm a bunch of useless quasi-measures. To find meaningful measures, you need to decide what attributes about innovation you want to change or improve or achieve. These might be:
- the size of the business benefit of innovations
- the ROI of innovations
- the speed of getting innovations implemented
- the frequency of generating innovations worth testing
- the extent of the workforce involved in innovation
If innovation is important to your organisation, has anyone taken the time to flesh out what attributes of innovation are strategically important?
You can’t measure corporate culture.
And how do you measure corporate culture? You don’t. You measure attributes of corporate culture. You measure the attributes that you want to change about the corporate culture. These might include (and there are many more):
- how often people learn from mistakes
- how well diversity is tolerated
- how widely continuous improvement is practiced
- how much collaboration happens spontaneously
- how quickly people adapt to change
What attributes of corporate culture matter most right now in your organisation?
You can’t measure service quality.
Service quality isn’t measurable, either. You must measure attributes about service quality, because it’s too complex to condense into a single measure. You might be thinking that Average Customer Satisfaction is a single measure that does the job. But it too is just one attribute of customer service: how satisfied customers are with it. There are potential dozens more, some being:
- how likely a customer is to recommend the service
- how likely a customer is to use the service again
- how timely the service is
- how accurately the service is carried out
- how easy the service is to use
Is your customer survey just a random collection of questions? Or have you put the thought into which specific attributes of service are the most important to measure and improve?
We can’t measure concepts, only attributes.
So, it’s attributes about concepts that we want to change or improve, and therefore measure. We won’t ever find meaningful measures by asking ‘how do we measure [concept]?’
To solve this problem, and to make it easier to find meaningful KPIs and performance measures, we can follow this line of questioning instead:
- What about the concept is important right now?
- What specific attributes do we want to change?
- What would we observe as evidence of those changes?
- How could we quantify that evidence to gauge the amount of change?
What are the hard-to-measure concepts that are important to your organisation right now? Do you know what attributes about these concepts matter most to improve and measure?