The PDMA Handbook of New Product Development

29.2. Key Challenges to Implementing a Successful Metrics Program

Despite the benefits of a metrics program, many companies are not using metrics to their full advantage. PRTM's benchmarking subsidiary, The Performance Measurement Group, LLC (PMG), recently surveyed 40 companies of various sizes in a wide range of industries. (The Performance Measurement Group, 2002). Findings showed that although over 70 percent of companies use metrics to review project results, only 55 percent use metrics for planning and goal setting. Furthermore, only 41 percent use metrics for external benchmarking, and just 38 percent use metrics to link their strategy to individual goals. These numbers tell us that although many companies are tracking metrics, few are leveraging their full potential. There are four primary reasons for this:

• Metrics used are not the right ones.

• Tracking mechanisms are inadequate.

• Bottom-line implications of performance are not considered.

• Management process is missing.

29.2.1. Metrics Used Are Not the Right Ones

What are performance metrics? They are indicators that monitor the impact of your efforts on the business in which you work. They are measures of performance, motivators of behavior, the focal point for directing improvement efforts, and the medium for communicating with other organizations. Performance metrics focus on fact-based rather than intuitive decision making and provide irrefutable evidence of problems and areas for improvement. Effective metrics are easily ...