I like the idea of using simple statistical methods to evaluate scoreboard metrics. Any method to teach managers the simple concept of variation (special vs. common causes) and the removal of those idiotic green/yellow/red charts would be HUGE progress. Enough knee-jerk management methods.

Thanks for the article.

Rich DeRoeck

I have used this method for years with a few adjustments.

Instead of the average level being the standard, I have used the most pertinent control limit (upper or lower depending on direction of "bad").  In this example, I would put the expected level to be the 9.3%.  This is the level that would trigger a potential change in the process.  Using the center line leaves a 50-50 chance of the metric being exceeded and a lot of noise that needs to be addressed.

I still use red/yellow/green indications.  Green = control is maintained and no signals to investigate.  Yellow =  a signal under investigation and Red = a confirmed change needing to be addressed.  

This methodology gives "the best of both worlds".  Simple indicators of what needs to be discussed by management are yellow or red.  Greens can be left alone and not even discussed.  The red/yellow/green become very meaningful to the organization and is data driven so the subjectivity becomes removed.

The alignment of metrics to business goals also provides a "gut check" to management so they can see if the "numbers are being made" the bulk of the reports are expected to be "green", if they are not there is action to be taken.  If the "numbers are missing targets", the direction to take for improvement become abundantly clear.