The allure of a single performance measure is mesmerising. Its small data collection cost and its ability to focus management attention make this search an ongoing goal for many organisations. Unfortunately, while great in theory, this approach does not reflect the complexities of many of our workplaces.

A recent article in HBR by Graham Kenny highlighted that many organisations seek to use a single performance measure as the sole measure of organisational success. Typically, these measures are quantitative, lag indicators; that is a numeric measure that represents past (historic) performance. However, as the article and personal experience has shown this single-minded approach can lead to a range of unintended consequences.

For example, the use of single performance measure misses the need to look forward (lead indicators) and the need to “measure” softer aspects (subjective performance measures) as part of a balanced approach to performance management. Without it, we may drive personal and organisational behaviours based on historical performance that can only be numerically quantified. From the perspective of long-term arrangements such as Performance Based Contracts (PBCs), the guarantee of on-going performance relies on future conditions being the same as the past.

In an earlier post (When is a KPI not a KPI?) I suggested using a Performance Measure Hierarchy as a method for including all performance aspects; specifically, quantitative and qualitative, but lag (past) and lead (future). Moreover, that these tiers of performance measures:

• represent a range of Key Result Areas (KRAs) which define contract (or organisational) success; and
• linked to a range of rewards and sanctions.

For the specific management of Complex Materiel[1] I also recommend you look at another earlier blog on “Measuring and Incentivising Sustainment in the Age of Asset Management”.

So while we should all continue to search for new, and of course refine existing, performance measures we should resist the allure of the single measure lest it be a fool’s errand.

[1]             Complex Materiel is defined as those assets that support military operations through flying (e.g. aircraft and helicopters), sailing (e.g. ships, boats and submarines), driving (e.g. wheeled and tracked vehicles) and transmitting (e.g. satellite ground stations).