Measuring relevant things

Abstract

PurposeTo identify the risk of poor performance measurement including the fact that executives can easily develop bottom‐line myopia where performance is judged solely on monthly or quarterly numbers, to the exclusion of all other indicators of performance. The paper also identifies why relevant non‐financial measures, remain in the realm of more talk than action and what can be done about it.Design/methodology/approachLooks at various measurements, both financial and non‐financial, that are made within the business environment.FindingsAn information system needs a set of rules and procedures to govern the collection, analysis, and distribution of this information. Intangibles and subjectivity is a casualty of current performance when there is excessive reliance on financial or other dated objective data. Narrowing down, define, and then managing a few critical performance indicators essential to improvement. Use specific quantifiable objectives.Practical implicationsAnyone wanting an organization to function as a cohesive unit will need to identify key performance measures. Anything can be measured. What is more important is to measure relevant and specific things. Look at your inputs, process and outputs, and identify ways of measuring those things relevant to your ultimate objective of your group.Originality/valueServes as a reminder that anything can be measured. Highlights the importance of measuring those things relevant to your ultimate objective in order to achieve that objective.