Performance Measurement: Correcting Measurement Myopia

Author(s)

Faculty Member, DBizInstitute.org and Managing Director, Spanyi International

Persons with myopia, or near-sightedness, are unable to see distant objects clearly. In the U.S., around 70 million people are myopic. For individuals, myopia is readily corrected. For corporations, measurement myopia, or nearsightedness, is not so easy to cure. In fact, it can be fatal. So why do so many organizations continue to focus myopically on just the traditional measures of performance: revenues, profit, cash flow, and departmental actual-to-budget comparisons? Those organizations that focus exclusively on traditional metrics risk the dangers both of near-sightedness and hind-sightedness.

Business process management practices can provide the corrective lenses for organizational measurement myopia. The implementation of process management principles requires firms to view the business from the customer’s point of view — from the outside-in, as well as from the traditional, internal perspective. The first step in viewing the business from the customer’s point of view involves identifying, measuring, and monitoring the firm’s performance in terms of delivering what customers really want. Recent research indicated that only about 35% of respondents could demonstrate that their firms took a rigorous approach to identifying, measuring, and monitoring the firm’s performance in terms of delivering what customers really want. Along the same lines, at a recent conference workshop, participants from a regional bank reported that their firm monitors loan volume and the value of the loan portfolio but does not monitor the mean cycle time to execute a typical retail loan. Participants from a regional insurance company reported that their firm monitors a series of financial metrics on claims processing but does not monitor or manage how long it takes to settle the average claim. Yet, that is precisely what customers care about — fast service, right the first time.

Why is it that many organizations are afflicted with such measurement myopia? Many leaders have a strong functional bias and view the business from the perspective of their prior functional experience. As the COO of a major healthcare institution said, “In healthcare, the org chart gets in the way of care delivery.” Another traditional obstacle to viewing the business from the customer’s point of view is that leaders are seldom accustomed to working together in a deliberate and collaborative way. But that is precisely what is needed for proper focus, as it is the firm’s large cross-functional processes that deliver what customers want.

Many executive teams act more like a group of talented individuals than a team. This becomes an even more fundamental issue when a firm employs process management to go beyond simply identifying and monitoring performance to making improvements and introducing innovations. Consider this. EbizQ recently reported that when CIOs were asked, “What most hinders your company’s ability to achieve better business performance management?” nearly half (45.83%) cited a corporate culture that is resistant to change as the principle impediment. Business processes (37.5%), technology (33.33%) and a shortage of people and skills (29.17%) were the other reasons cited.

So, if you suspect that your firm suffers from measurement myopia, put on those process management corrective lenses to see clearly what customers want. As management guru Peter F. Drucker said, “You can’t manage what you can’t measure!”

Similar Resources

Enhancing Your Team’s BPM Capabilities: The Value of External Expertise

Enhancing Your Team’s BPM Capabilities: The Value of External Expertise

Author(s):

Editor & Founder, BPMInstitute.org, BAInstitute.org and DBIZInstitute.org

Enhancing Your Team's BPM Capabilities: The Value of External Expertise In today’s dynamic business environment, managing and improving business processes is critical for any organization aiming to maintain a competitive edge. Many companies consider handling Business...

Exploring Shared Data Model and Notation (SDMN) and Its Role in BPM+

Exploring Shared Data Model and Notation (SDMN) and Its Role in BPM+

Author(s):

Editor & Founder, BPMInstitute.org, BAInstitute.org and DBIZInstitute.org

Exploring Shared Data Model and Notation (SDMN) and Its Role in BPM+ Introduction In the evolving landscape of Business Process Management (BPM), the introduction of Shared Data Model Notation (SDMN) marks a significant advancement. As businesses increasingly seek to...

Embracing the Future: Low-Code and No-Code Platforms in BPM+

Embracing the Future: Low-Code and No-Code Platforms in BPM+

Author(s):

Editor & Founder, BPMInstitute.org, BAInstitute.org and DBIZInstitute.org

Embracing the Future: Low-Code and No-Code Platforms in BPM+ Introduction In the realm of business process management (BPM), low-code and no-code platforms have emerged as transformative tools, reshaping how organizations develop applications and manage workflows....

Featured Certificate: BPM Specialist

Everyone starts here.

You're looking for a way to improve your process improvement skills, but you're not sure where to start.

Earning your Business Process Management Specialist (BPMS) Certificate will give you the competitive advantage you need in today's world. Our courses help you deliver faster and makes projects easier.

Your skills will include building hierarchical process models, using tools to analyze and assess process performance, defining critical process metrics, using best practice principles to redesign processes, developing process improvement project plans, building a center of excellence, and establishing process governance.

The BPMS Certificate is the perfect way to show employers that you are serious about business process management. With in-depth knowledge of process improvement and management, you'll be able to take your business career to the next level.

Learn more about the BPM Specialist Certificate

Courses

  •  

 

Certificates

  • Business Process Management Specialist
  • Earning your Business Process Management Specialist (BPMS) Certificate will provide you with a distinct competitive advantage in today’s rapidly evolving business landscape. With in-depth knowledge of process improvement and management, you’ll be able to take your business career to the next level.
  • BPM Professional Certificate
    Business Process Management Professional
  • Earning your Business Process Management Professional (BPMP) Certificate will elevate your expertise and professional standing in the field of business process management. Our BPMP Certificate is a tangible symbol of your achievement, demonstrating your in-depth knowledge of process improvement and management.

Certification

BPM Certification

  • Make the most of your hard-earned skills. Earn the respect of your peers and superiors with Business Process Management Certification from the industry's top BPM educational organization.

Courses

 

Certificates

  • Operational Excellence Specialist
  • Earning your Operational Excellence Specialist Certificate will provide you with a distinct advantage in driving organizational excellence and achieving sustainable improvements in performance.
 

 

OpEx Professional Certificate

  • Operational Excellence Professional
  • Earn your Operational Excellence Professional Certificate and gain a competitive edge in driving organizational excellence and achieving sustainable improvements in performance.

Courses

Certificate
  •  

  • Agile BPM Specialist
  • Earn your Agile BPM Specialist Certificate and gain a competitive edge in driving business process management (BPM) with agile methodologies. You’ll gain a strong understanding of how to apply agile principles and concepts to business process management initiatives.  
 

Business Architecture

 

Certificates

  • Business Architecture Specialist
  • The Business Architecture Specialist (BAIS) Certificate is proof that you’ve begun your business architecture journey by committing to the industry’s most meaningful and credible business architecture training program.

  • Business Architecture Professional
  • When you earn your Business Architecture Professional (BAIP) Certificate, you will be able to design and implement a governance structure for your organization, develop and optimize business processes, and manage business information effectively.

BA CertificationCertification

  • Make the most of your hard-earned skills. Earn the respect of your peers and superiors with Business Architecture Certification from the industry's top BPM educational organization.

Courses

 

Certificates

  • Digital Transformation Specialist
  • Earning your Digital Transformation Specialist Certificate will provide you with a distinct advantage in today’s rapidly evolving business landscape. 
 

 

  • Digital Transformation Professional
  • The Digital Transformation Professional Certificate is the first program in the industry to cover all the key pillars of Digital Transformation holistically with practical recommendations and exercises.

Courses

Certificate

  • Agile Business Analysis Specialist
  • Earning your Agile Business Analysis Specialist Certificate will provide you with a distinct advantage in the world of agile software development.

Courses

Certificate
  • DAS Certificate
  • Decision Automation Specialist
  • Earning your Decision Automation Certificate will empower you to excel in the dynamic field of automated decision-making, where data-driven insights are pivotal to driving business innovation and efficiency.