choose-what-to-measure

name	choose-what-to-measure
category	business
description	Pick a small set of operating measures for a business from the ones its published type already names, define each precisely, and record where the number comes from. Use when a business tracks nothing, tracks too much, or reports numbers nobody trusts.

choose-what-to-measure

Produce a short list of measures with definitions and a named source for each.

When to use

• Use when a business tracks nothing, or tracks so much that nothing gets acted on.
• Use when two people produce different numbers for the same measure.
• Do not measure individuals where the measure is really about the process. Say so plainly if that is the case.

Procedure

1. Open the business type at https://smbwiki.com/ and list the measures named against its skills.
2. For each candidate, write the decision it would change. Drop any measure that changes no decision.
3. Keep at most two measures per department. More than that and none of them get watched.
4. Define each survivor precisely: what counts, what is excluded, over what period, and in what unit.
5. Name the record the number is computed from, and the person who owns that record.
6. State which direction is good, and what number is bad enough to act on.
7. Compute each measure once by hand from real records before automating anything.
8. Agree who looks at it, how often, and what they do when it moves.

Done

• A measure sheet lists each measure with its definition, source record, owner, unit, and direction
• Every measure on the sheet has a decision written next to it that it would change
• Each measure is computed once by hand and the result is checked against what the owner expected

The published operating models these skills read from are open and MIT licensed at https://smbwiki.com/ and https://github.com/erphq/smbwiki.