PREAMBLE ON DEVELOPING MEASUREMENT STRATEGIES

How do we work out what sorts of measures are needed to help run an enterprise? We’ll use three methods.

One reasonable starting point is to decide on some principles for selecting performance measures. It’s not only reasonable, it’s important because poorly chosen measures can distort people’s behavior, with disastrous and expensive consequences, as we’ll see shortly.

Then there’s a simple way of thinking about how to identify measures that can help you find your way, even in the foggiest circumstances. It’s the Tribus Paradigm, named after a very clear and practical thinker about management: Myron Tribus.

Finally, it’s important to recognize that there’s a hierarchy amongst performance measures: indeed, the Tribus Paradigm leads us inexorably to a performance measurement structure.

So that’s the Framework that will now be developed: a set of Principles for selecting measures, a Paradigm for thinking about which performance measures are needed, and a structure for performance measures.