Metrics: you are what you measure!

The authors focus on the selection of good metrics and, based on their own experience and the academic literature, summarize seven pitfalls in the use of metrics which can cause them to be counter-productive and fail.

Abstract

Metrics are used by firms for a variety of commendable purposes. The authors maintain that every metric, however used, will affect actions and decisions. But, of course, choosing the right one is critical to success. The authors focus on the selection of good metrics and, based on their own experience and the academic literature, summarize seven pitfalls in the use of metrics which can cause them to be counter-productive and fail. The article then goes on to outline a seven-step system to design effective, `lean' metrics, which depends on a close understanding of customers, employees, work processes, and the underlying properties of metrics themselves.