One thing I run into at many clients is that they don’t differentiate between metrics for a project and metrics used in management. How does confusing the two reduce your effectiveness and how can you fix it?
“Management,” in this case, is supporting the people who report to you in doing their daily jobs. Management metrics are, by their nature, ongoing metrics that you need in order to know how to help your people create the value that the customer is paying you for. By examining such critical measures, managers can react in time to prevent problems, while also preventing overreaction when faced with the normal process variability. (See my article on Statistical Management Control for more about how that works.)
As a manager, you want the minimum number of metrics necessary to give you that information, but you also need metrics measuring the complete scope of what you are responsible for. If you have only one or two metrics you can make bad decisions on good data. For example, if you only have a production rate metric, you can make decisions that mean you hit that target, but if you don’t measure other aspects of your process, for example safety or expenses, you might be hitting that target at great cost without even knowing it.
You should aim for a “holographic” or "whole picture" set of metrics. (If you want to learn a bit about how to do that, check out this video about Hoshin Kanri - Making Organization-Wide Metrics.) These metrics may be adjusted through time, but usually once you settle on the ones you want, you keep measuring them over a long period of time since you have found the most useful metrics.
On the other hand, consider a project. A project has an endpoint with deliverables, a span of time and a budget of some sort. Managers who have an important project often want to add metrics associated with it to their list of management metrics. But because projects end, they really are not metrics you measure from now on.
Now, it is very important to have metrics associated with a project. The traditional “three legs” of a project is a good place to start: on-time, on-budget, and meeting scope. A manager who has a project will almost certainly want to measure these aspects, but they are not management metrics, they are metrics associated with the project itself.
What metrics do you use if you are a manager of project managers? Remember that a manager needs information on the processes they manage in order to know if they need to make an intervention of some sort to support their people. A manager in this area is likely looking for metrics that show how well the process of project management is working across the projects in that area. Typical metrics are around aggregate deviation from planned milestone dates or completion dates, from budgets, and from the originally scoped deliverables.
Again, note how this measures the process of project management, not the individual projects themselves. If, say, we are consistently under-budget, this indicates a problem with our project cost projections that results in tying up money we could be using in other ways. Once you know this, you can put together a team to figure out the root causes and implement a fix.
Why do we need to differentiate between project and management metrics? Aren’t all metrics basically the same? Well, the system that you build to use data to manage (a Decision Support System) will require ongoing data feeding into it so that you can test assumptions about what is important in managing your area successfully, as well as see results as you make various management interventions. You would like to show improvements over time as a result of the work that you have done and validate the effect managing your area has on up the hierarchy of the organization, showing how you and your people are a part of how the organization achieves is short- and long-term objectives.
The infrastructure that you build to support this is quite different than for project-based metrics. Projects are ephemeral – they end at some point. The deliverables are often unique for each project. While these projects may be critical to achieving your management objectives (for example, projects to achieve your strategic objectives) they are not ongoing management metrics.
Just remember that all metrics are not management metrics, and that you don’t need very many management metrics to properly support your people.
You do need the right metrics, though!