By Kim Rose
Boosting the performance of administrative units requires data—yet you know that simply tracking the easiest metric to pull is not enough.
The first step to leverage data to enhance administrative unit performance is selecting core performance metrics. But data alone does not compel corrective action from unit leaders or senior executives.
In fact, the impact of well-selected core metrics is often dramatically undermined by the failure to specify associated “action triggers”—thresholds that signal underperformance on core metrics and mandate a response or action. Units that monitor data without establishing these thresholds often overanalyze negative trends while the situation worsens.
Differentiate targets and triggers
Principled action triggers represent the single most effective tracking mechanism to ensure leaders respond to concerning performance data in a timely fashion. Action triggers should not be confused with performance targets. While often used synonymously, performance targets and action triggers serve different purposes. Targets clarify performance goals, while triggers signal when goal achievement is highly unlikely without immediate corrective action.
Understand the options
Depending on the goal of an established metric, leaders can employ two types of action triggers—fixed or relative. As their names suggest, fixed triggers maintain constant threshold levels, while relative triggers self-adjust based on targets, performance trends, and related metrics. In general, fixed triggers are easier to communicate and therefore manage against, but they are not always applicable for administrative unit metrics.
Choose between fixed and relative action triggers
Beyond determining core performance metrics for administrative units, unit leaders must establish associated “action triggers” that signal underperformance and mandate a response or action. This requires unit leaders to match each core measure to the most appropriate trigger type—fixed or relative.
Deploy fixed triggers for non-negotiable targets
Fixed triggers are most applicable for core metrics with truly non-negotiable targets, such as compliance with regulatory requirements. Where current performance on a core metric is satisfactory, a fixed trigger can guard against significant performance declines that would likely cause units to miss non-negotiable targets without corrective action.
Use relative triggers for performance downturn
Rather than fixed targets, relative action triggers are based on meaningful performance declines on core metrics. More specifically, relative triggers consider current performance relative to the target, past performance, and/or related metrics to differentiate normal performance fluctuations from concerning trends that warrant action.
Rather than arbitrary percentage variance, leaders should base triggers on standard deviations from the mean to account for metric volatility and signal meaningful performance changes. Performance on any metric should fall within two standard deviations of the mean 95% of the time.
Next, Check Out
Selecting Core Performance Metrics