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Using Performance Metrics to Do More with Less
A 7-Step Action Plan for Operations Manager

by Maria Ford, www.pureshare.comWednesday, April 1, 2009

This paper details a 7-step action plan that business and operations managers can use to optimize the balance between the three functional states that they work in each day: urgent, operational and strategic. It provides concrete steps to optimize one’s management practices using existing management tools. It also describes a proactive metrics management tool that can automate virtually all of the same processes.

Three key functional states of managers:

  • Urgent
  • Operational
  • Strategic

How do you manage the balance between them?

Each day, a business manager’s attention and resources are split between three functional states: urgent, operational and strategic.

A manager’s goal is to address each of these functional states more effectively. Management best practices and management training focus on shifting attention and resources away from fire fighting and toward strategic process improvement.

However, as this paper will identify, the traditional reporting processes that managers have at their at their disposal – while useful in many respects – also pose a key barrier to achieving the ideal functional balance.

The paper details a seven-step plan that managers can use to optimize that balance. It provides concrete actions that managers can take to optimize their management practices using existing management tools, such as spreadsheets, dashboards and intranet sites. It also describes a proactive metrics management tool that can automate nearly all of the same process.

Three Functional States

In any type of business or industry, a business manager’s attention and resources on any given day will be split between three functional states:

  1. Urgent. In this “fire-fighting” mode, a manager must immediately address critical situations as they arise.
  2. Operational. In this steady state of day-to-day management tasks, operational details are monitored and managed. An example is managing resource allocation, call volumes, and budgets.
  3. Strategic. Managers also try to spend time each day or each week focusing on improving their business and operations processes.

Within these three states, or “buckets”, a wide range of competing tasks and priorities arise each day. Urgent crisis management always distracts from the ability to ensure that day-to-day operations are optimized. Likewise, fighting fires and managing mundane operational tasks will suck time away from strategy improvement.

So, while every manager’s desire is to better manage the balance between these functional buckets by minimizing crisis situations, better managing daily operations, and creating more time for process improvement – it is much easier said than done.

Reports help to:

  • Identify trends
  • Understand what has occurred
  • Rollup information into summaries
  • Conduct rear-view analysis & long-term planning

Reports do not:

  • Provide day-to-day operational status
  • Enable at-a-glance understanding of where things stand






Metric: noun. Something which can be measured.

Performance metric: noun. Measurable criteria which tells us how well we are performing.

Operational performance metric: noun. Performance metrics which focus on the day-to-day concerns of business-line or operations managers.

Reports versus Metrics Management

In most organizations, reports are the primary tool that managers have to obtain the insights they need to make effective decisions to prevent crisis situations and to optimize operations. By nature, a report provides information about events that have already occurred. Reports are useful for:

  • Identifying trends
  • Understanding what has happened, and possibly why
  • Rolling up detailed information into summaries
  • Conducting rear-view analysis and long-term planning

Reports are typically created from information that resides in more than location –most commonly in spreadsheets and one or more enterprise databases. Extracting and consolidating this information is a time consuming and predominately manual process, which further contributes to the after-the-fact nature of reports.

Given this, it is clear that reports provide the most benefit to managing the third functional bucket – strategy/process improvement – because these are backward- and forward-looking management tasks. Reports are not designed to help with crisis management, nor to assist in the day-to-day and hour-by-hour decisions that managers must make. Yet, with no better tools to help with day-to-day management tasks, managers must rely on “more reports” to get the answers they need to be efficient and effective.

There is misalignment, then, between a manager’s primary management
tool – reports – and a manager’s day-to-day operational reality. But,
through effective use of operational performance metrics, managers
can close that gap by:

  • Minimizing or eliminating fire fighting by heading off problems or rapidly addressing them as they occur.
  • Managing only exceptions on a day-to-day basis by focusing operational attention on problems (or exceptions to predefined norms) rather than monitoring all aspects of operations at all times.
  • Maximizing the time spent on process improvement.

The remainder of this paper goes into detail about how to make that happen.

Defining Operational Performance Metrics

Performance metrics are measurable criteria that tell us how well we are
performing on an individual, departmental or organizational level.
Operational performance metrics are those metrics which focus on the dayto-
day concerns of a business-line or operations manager. These
metrics can be categorized into the same three “buckets” described

Functional Bucket Metric Category
Urgent Alert: warns of a pending crisis or notifies of a current crisis
Operational Status indicator: compares current operational states against predefined thresholds
Strategic Summary: provides snapshots of past performance and forward-looking projections based on past data and external data

The action plan presented in the remainder of this paper is designed to help business and operations managers to effectively identify, organize, and leverage operational performance metrics to obtain the answers they need to be more effective on a day-to-day basis – answers to questions such as:

  • What is going on in my organization right now?
  • Why is that happening?
  • Where do I need to spend my time and attention to be effective at this time?
  • How are we doing (in comparison to the past, to other groups, to competitors, etc.)?

Seven-Step Action Plan

This action plan for managers is designed to enable an “answers-on-demand” operational model that is ideal for day-to-day management. It will enable managers to rethink how they spend their time, how they manager their days, and provides a path toward a more ideal balance between the three operational states.

We will also consider how various common management tools – as well as one newer tool – can be used to facilitate the answers-ondemand model.


The first step is to identify a specific operational area that you wish to tackle first. Choose an area that is important yet limited in focus. In our experience, it is more valuable to launch a metrics management project quickly to begin to get feedback than it is to start with a project that has broader scope.

Within the operational area you choose, identify the primary stakeholders and the answers that they need, or that they regularly ask for. Two examples are provided in the table below.

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