Increasing Operational Metrics Maturity
The first thing to consider is the enterprise perspective on measurement. Does your organization use a formal scorecard methodology? If yes, then it is important to understand and adhere to that methodology.
1. Identify What Matters Most to the Organization
Take a top-down approach and ladder your performance indicators and metrics to what matters most to the organization. This will allow the operation’s efforts to align and contribute to company-wide objectives. To identify what matters most to the organization, look to the mission, vision and value proposition statements. Operational measures should also be used to validate your value proposition and your value is likely aligned to organizational objectives.
The most helpful tool to bridge the gap between an organization’s long-term goals and division- or department-level initiatives are strategic objectives. Strategic objectives are statements of clear, actionable direction of what must happen for the organization to achieve the mission/vision.
If you still need to drill down further to find what matters, utilize a SWOT analysis to identify your strengths, weaknesses, opportunities and threats. This can be a helpful mechanism to identify areas where measurable values to inform on performance will be meaningful.
2. Determine and Define Your Performance Indicators
Once you have top-down strategic direction, you can start to establish or evaluate your performance indicators. Your most important measures are your key performance indicators (KPIs). These are likely those high-level measures that will get reported up to executive leadership because they have a direct impact on strategic objectives and goals. Not every performance indicator is a KPI.
Expect to identify the KPIs that are measuring what matters most to the organization, as well as Operational Performance Indicators (OPIs) that add depth to the understanding of the process and service.
OPIs are incredibly important to understanding your operation. For instance, say your department KPIs are ROI, Fiscal Responsibility and Utilization Rate. To fully understand these KPIs, you will need an additional performance indicator on Output. In this scenario, Output is not necessarily a KPI. That is not to say Output cannot be a KPI. Again, it goes back to what is most important to your organization. Output itself may not need to be reported up past an Operations level; however, it is required to support understanding the operation.
Every Performance Indicator, KPI or otherwise, will have metrics that inform the measure, and each metric needs to be identified and tracked. Metrics are objective measures of assessment used for comparing and tracking. While every performance indicator is technically a metric, not every metric is complete enough to be a performance indicator.
Using the same example above of Output, this OPI may require tracking multiple metrics such as 1) requests submitted, 2) requests accepted, 3) requests in progress and 4) requests delivered. Additionally, there can be value in adding additional metrics to understand requests rejected and why this information could help to identify opportunities.
There are numerous types of performance indicators that can be monitored:
- Strategic performance indicators monitor how successful the organization is in achieving outcomes.
- Operational performance indicators focus on inputs, process and outputs.
- In-market performance indicators focus on how tactics perform.
In addition to these common performance indicator types, there are Project, Employee, Risk and Customer measures, to name a few, that provide meaningful insights into specific areas of interest.
Various measure types will contribute to your ability to monitor progress in achieving strategic objectives. For Marketing and Creative Operations, in-market performance indicators coupled with operational performance indicators will contribute to the ability to monitor those very important strategic objectives such as ROI from marketing efforts.
