AT&T Management & Improvement Steps
A. Establish process management responsibilities.
B. Define process and identify customer requirements.
C. Define and establish measures.
D. Assess conformance to customer requirements.
E. Investigate the process for improvement opportunities.
F. Rank improvement opportunities and set objectives.
G. Improve process quality.
In this process, Tasks B, C, and D are the core of performance measure development. In fact, the systematic method to be described amounts to an elaboration of these three tasks. These three have been extended to the following six steps:
1. Decide the outcomes wanted.
2. Describe the major work processes involved.
3. Identify the key results needed.
4. Establish performance goals for the results.
5. Define measures for the goals.
6. Select appropriate metrics.
Each of these six steps will be discussed in the following sections. We will create a very small company, Hackenstack Firewood, that we can use to help us get a working knowledge of this systematic method for developing performance measures.
First Law of Performance: If you try to be the best at everything, you'll be the best at nothing.
Why are we doing this work? The answer is to achieve some outcome or objective (the words are used interchangeably in this process). As used here, objectives might not seem very definitive. However, they are very important because they set the direction for all processes in the system. Essentially, objectives (or outcomes) are statements of the wants, needs, and expectations of customers and other stakeholders. Objectives are the warm and somewhat fuzzy expressions that should form the mindset for all who are involved in the system. Examples are:
Realize that the desired outcome sets the strategic direction of an enterprise. Consequently, tactical decisions about what the business does, how it is done, and what gets measured must relate to this strategic statement. The outcome or objective statement is a driving force for the selection of performance measures. In the end, what is done and measured somehow must connect with the desired outcome. For instance, to achieve its objective, that airline will have to spend resources for equipment and maintenance, not for in-flight meals and reserved seating. And, the measures should relate to safety and costs that drive ticket prices.
The choices of outcomes should be limited and selected carefully. A major consideration is focus; avoid the desire to be the best of everything. If you can pick something you are sure you would succeed at, that choice probably should be your number one objective. In the case of Hackenstack Firewood, the employees decided that the result of their effort should be to: "Deliver firewood profitably at competitive prices."