Measuring and improving business performance.

What do you measure in your business? Revenue, expenses is a must, but what else? How about utilization rates? If you are an OEM perhaps the manufacturing build rate, or the yield of a product coming off a manufacturing line. Or perhaps you are more detailed in your measurement of a process in obtaining reports from your staff.

Einstein once said, “There are the things that you count, and the there are the things that are counted”. If you think about this then you will know that they are not the same. Measure what is relevant and important to meeting the goal, great but how do you do it? It requires fine-tuning, and it may require some innovative thinking. Lets look at an innovative example of re-measuring where resources supplied to a situation were not proportional to the situations event.

A police force in Cambridge in the UK measured crime rates in much the same way most police forces have done. They counted each criminal event as a factor of ‘one’. Think about this. If you were the regional commander, would you supply the required resources to a shop theft equal to the same resources required for a murder? Obviously not, but crime statistics, which are part of the measurement of police resources in any given area, are based on the number of crimes.

Lawrence Sherman from Cambridge University looked into this criminal recording scenario and came up with an innovative option. Crime would be reported on the harmful effects of the victims and the average penalty outcomes of the perpetrator.

Thus was born the Crime Harm Index (CHI).

Lets look at the different between the shop theft and the murder. They were calculated at 1 + 1, so a crime rate of 2. But the penal outcomes are different. The average prison days for shop theft amounted to 2. The average prison days for murder amounted to 5,475. In Cambridge at the time of Sherman’s investigation (pardon the pun) there were 308,326 shop thefts and 553 murders. So the math is easy, shop theft equals a CHI of 616,652 and murder equals a CHI of 3,027,675.

Using such a framework opens many more possibilities than just calling one crime a factor of one. Yes their needs to be some rules and regulations applied to the CHI so as to keep it fair and simple. But at our 30,000 foot level measuring the CHI can give a more realistic data on high and low crime areas, and in fact did. Can give a better cost control, which it did, and obviously it’s easier to schedule resources more efficiently, which it has done. For more on this story you can follow this link

I am a Strategic Business Consultant. I can help you do better, the processes that you are doing now. You can contact me at C:646 580 3024