How We Serve You : White Papers
Ten Rules for Developing Management Metrics
Rule 3: Measures Must Be Simple to Define and Communicate
The more effective performance measures are those that are simple. There has been a tendency in the past to select several areas of performance and then develop one complex measure. For example, some companies keep track of an overall customer satisfaction index or ratio, which may be developed from several aspects of customer service. The disadvantage of this approach is that the use of ratios can lead to confusion and misunderstanding of how a particular measurement affects the overall result.
Having buried a measure deep inside a formula can lead to making poor or incorrect decisions about poor performance. A better approach is to track the individual components such as delivery, quality and response, which have been a part of a complex ratio that was used to determine customer satisfaction. Managing these individual components will result in achieving the goal of improved customer satisfaction.
