When we set out to improve a process we need to measure how it’s performing ‘now’ (current state) and later when we have updated the process (future state) to verify any improvement. So what should we measure?
We often start with a key customer requirement (for example quality) and then translate this as a business measure (for example # of customer complaints received) and then further interpret it as an internal process measure (for example # of errors with delivered services/goods).
A further insight into these business/company measures (often seen as lagging) and these internal process measures (often seen as leading) is as follows:
What are lagging business measures?
- A measure of results and outcomes
- One that follows an event
- Knowing the ‘score’ – a snapshot
- Broader longer term focus
- Tend to be measured at the organisation or business unit level
- Examples – cost, efficiency, customer satisfaction, customer complaints
What are leading process measures?
- Predicts goal achievement, you can influence them
- Can be more difficult to measure
- Enables pre-emptive actions
- Signal future events
- Tells you how the outcomes will be achieved
- Tend to be measured ‘in the process’
- Shorter term measures often measured more frequently
- Examples – error rates, in-process data capture, engaged employees, daily service levels.
A leading measure is “upstream” the lagging measure is “downstream”
Why use leading measures?
- Prevent working on things you don’t need to
- Focus actions on the right things
- Improve the outcomes
- Opportunity to influence behaviours focused on outcome
Why don’t more organisations measure leading measures?
- Sometimes hard to follow
- Can be harder to measure
- Requires you to change habits
- Lag measures feel reassuring!
Lagging and Leading summary
- We need a combination of both
- Lagging measures provide a connection with the customer and the overall direction for the business process improvement project
- Lead measures provide the actions for the individual to improve the process
What’s the way forward?
- Identify the measures of interest to the customer
- Determine what business lagging measures are a priority
- Create a list of options for process lead measures and how you will measure them
- Capture your current and future measurements