The Effective Water Professional by Water Environment Federation;

Author:Water Environment Federation;
Language: eng
Format: epub
ISBN: 6186996
Publisher: Water Environment Federation
Published: 2015-08-15T00:00:00+00:00

3.2 Indicators

Managers seeking change or improvement must ask the question, “How do we know we’re successful?” In some organizations, a quick look at the ledger’s bottom line may answer that question. However, it may also be too late by the time financial returns are tallied. Complex and capital intensive organizations such as the water sector need to understand their health and competitiveness far in advance of seeing it in their ledger. Any meaningful plan, particularly one specifying significant changes, will need to be measured and corrected. Informal data and information about the health of an organization or progress surrounding desired change is always helpful, but anyone committing significant resources to a plan or change initiative will want to design a measurable evaluation process. Metrics in the form of standards, benchmarks, or indicators provide useful approaches for driving and measuring change. Although these terms have somewhat different meanings, they are often used interchangeably. As with most things, the details of what they drive and measure matters most.

There are numerous excellent business publications that discuss the identification and design of useful strategic measures. The biggest challenge is always that of reducing the concept to useful practice. It requires both experience and analysis to identify indicators that are worthy of organizational focus. Expertise is achieved most relevantly through the development of business analytical skills and participation in strategic planning exercises. Strategy built on measurement represents one of the most detailed forms of strategy planning. There are certainly benefits that come from any type of strategic planning that stimulates organizational introspection. However, organizations seeking real change identify and continually assess key indicators that help measure and chart progress.

The more emphasis an organization places on planning quantifiable metrics for strategic actions and results, the easier it is to chart progress. That is not to say that quantitative indicators are best. Quantitative indicators can detrimentally narrow the scope of the activities and outcomes they drive. If crafted without careful thought and consideration, they can also drive the wrong behavior and cause an organization to measure outcomes that don’t really bring success. In other words, they can miss the mark. Qualitative measures can be useful, but they often suffer from being too vague and difficult to evaluate. They may sound and feel good to achieve, but not drive the change that is critical to the desired success. A mix of both is often the best approach. However, there is no substitute for keen and critical thought when it comes to developing indicators.

There are two types of indicators commonly used in business: those that drive activities and those that measure results. Indicators that measure results are commonly called lag indicators. Lag indicators are also commonly referred to as outcome measures. Indicators that drive activities are commonly called lead indicators. Lead indicators are commonly referred to as performance drivers. Together, lead and lag indicators measure cause and effect.

An example of a lag indicator in the water sector might be something like “percentage of scheduled maintenance tasks completed”. A related lead indicator might be “number of maintenance work orders completed per employee”.

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