5 Reasons to Set Up Your Measurement System Now

Most of us would agree that a business organisation, or any other kind of organisation can only be properly managed if the information with which to make decisions is readily available. Below are some more specific reasons for setting up a measurement system at the organisational, process and job levels.

Reason 1: Provides Information for Reporting Performance

At the very minimum, a measurement system is needed to provide information for reporting performance to meet statutory requirements.

Reason 2: Guides the Implementation of Strategy

Strategy implementation generally involves resource allocation decisions for the purpose of meeting organisational objectives in the context of market conditions, competitive action and environmental trends. If there is no measuring system in place to monitor market conditions, competitive action or environmental trends, then wrong resource allocation decisions are likely to be made.

Reason 3: Helps to Shape the Direction of Strategy

The strategies a business decides to pursue are not (or should not be) static. The decision to alter strategic direction must have as its basis measurements of trends, the market, and competition. The patterns that warrant a shift in strategic direction cannot be discerned where no deliberate measurement system is in place.

Reason 4: Forms the Foundation for All Improvement Efforts

No meaningful improvement effort can be undertaken without measurement. Whether we are concerned with improving costs, quality, profitability, timeliness, customer satisfaction, innovation etc, measurements tell us our current state, helps determine the areas of focus and lets us know how far we have gone in achieving the improvement objectives. It is no wonder that measurement forms an integral part of improvement methods as diverse as TQM, TPM, Lean, Six Sigma, Theory of Constraints and the 2000 Percent Soution.

Reason 5: Helps in Managing Individual Performance

At the individual job level, contributions to overall business objectives are impossible to ascertain without measurements. A proper measurement system ensures that employees percieve a clear line-of-sight between their performance on the one hand, and the rewards they enjoy in the organisation.

Conclusion

To properly manage your business, you need a system of measures to help you focus on the critical issues. This system must provide up-to-date information at the job, process and organisational levels.

Samuel Okoro is the CEO of Leapfrog Alliance Ltd, a management training and consulting firm that helps organisations to reduce costs and improve quality through better business processes. His personal passion is to help move Third World business to world-class levels. For further details please visit http://leapfrogalliance.com/resources.html

Mighty Muggs Stormtrooper
AAAA Battery
Buy Leapster L-max