FM Notes from the Field: Metrics

Last week, we began a discussion of the Level 3 competencies, which include Short-term Improvements, and this week’s topic, Metrics.

Both of these competencies are appropriate for organizations that have reached the stage where a vector check on their progress is needed, or where tweaking goals and objectives is needed to continue making progress on organizational, process, and business models, improvements.

Robust metrics programs

Working with my clients, I’ve encountered a number robust metrics programs.  Often, the metrics were carefully developed to help accomplish a short-term improvement goal.

In one example, a large government organization with more than 100,000 employees and offices in all 50 states, as well as overseas, sought to improve overall utilization across their real property portfolio.  The metrics program helped them to not only reprogram large amounts of idle space, but also contributed to understanding the need for employee and functional realignments to best serve their stakeholders.

The effort that we discussed last week also provides a good example of the development of appropriate metrics.  The project was for another government client and involved a fundamental portfolio inventory problem.

Our five-step approach to supporting the effort, shown in the graphic below, included a metrics element in the fifth part of the project, where we had proposed a performance assessment and improvement sub-task to ensure that the project was meeting its goals.

For this client, we proposed a metric to provide a running tally of the accuracy and currency of the inventory, based on the percentage of facilities with updated records.  We proposed a second metric based on the completion of condition assessments, which was proposed with two goals in mind: to gain a better understanding of life-cycle programming within the portfolio, and to get a better handle on forecasting recapitalization and renovation costs.

The Balanced Scorecard

Several of my clients encountered the performance metric concept at seminars and programs based on scorecard methodologies, such as The Balanced Scorecard, developed by Robert S. Kaplan and David P. Norton.  As summarized in the American Productivity and Quality Consortium (www.apqc.org) “Passport to Success” publication Balanced Scorecard, this approach involves four steps:

• Set vision
• Define goals
• Break the goals into objectives
• Set measures

In general, scorecard methodologies highlight four main categories in a hierarchy of performance improvement efforts, as with the following example for private sector organizations:  financial, customer, operational and learning and growth.

These four categories provide an internal and external view of performance that is useful where building shareholder value is the primary goal.  While each of these is also an appropriate objective for public sector organizations, the hierarchy is often revised to include a mission element as the first category, to emphasize stakeholder and taxpayer service.

Lead and Lag Measures

A final, useful thought about the metrics competency is the concept of “lead” and “lag” measures.  In a traditional business process analysis, organizations come to understand the input and output requirements for their work, and use that as the basis for improving efficiency and utilization.

“Lead” measures refer to inputs, such as these two examples:  the number of service requests received, and the number of proposal submissions required to achieve an estimated business volume based on success rates.

“Lag” measures focus on the outcome of improvement efforts:  what is my utilization rate now that I have implemented a space management program, or how has employee productivity improved following the implementation of our new service desk procedures.

Final Thoughts

Thanks for reading the FM Notes from the Field blog, and thanks again to Steven and IWMSNews.com for hosting it.  I’d like to make a special mention of how much I appreciate the graphics support for these posts.

Meanwhile, if you would like more details on the references mentioned in any of the posts, drop a note to me at jim.turner@iwmsnews.com and I will send a reading list.  See you next week!