The Performance Management Revolution

Chapter 13. Measuring Outcomes

It is well known that metrics can tell you anything you want. For every event, metrics can be developed that present different—even opposing—conclusions. Getting metrics right is one of the hardest things to achieve with EPM. And underestimating the impact of metrics is the biggest reason why EPM initiatives fail or underdeliver.

Most people tasked with EPM understand how important it is to design the right management processes. They know you can't do this without adequate technology and a proper framework—be that the Balanced Scorecard, Value‐Based Management, or Six Sigma. But often, organizations just don't pay enough attention to getting the metrics right.

As the adage goes, “What gets measured gets done.” The right metrics drive the right behavior, and the wrong metrics drive the wrong behavior. In fact, just putting measurements in place at all affects behavior. This phenomenon is known as the Hawthorne Effect¹

The Hawthorne Effect was developed based on experiences conducted at the Hawthorne Plant of the Western Electric Company near Chicago between 1927 and 1932 to measure productivity in relation to changes in working conditions. Researchers found that when the lights in the factory were brightened, productivity increased. When the lights were dimmed, productivity also increased. And when the lights were returned to normal levels, productivity increased yet again. Bottom line, researchers concluded that the fact that workers knew measurements ...