p.1 When executives and board members are advised to monitor their
metrics, they frequently round up the usual suspects... The problem with these metrics is that they all measure effect
rather than cause. Trying to make decisions based on them is like measuring the water levels in a
flooded town. A lot of things were probably going on upstream before the flood, but now there's not much you can
do to keep the water out of your basement... Among the metrics that matter are those that provide early and reliable
indicators of what the output of your economic engine is going to be (rather than what the output is).
p.2 Market share is a critical metric for any business. But
in many industries, and in health care in particular, market share is such a lagging indicator that it's often useless
as a tool for decision-making.
p.3 Knowing you have water in the basement is certainly a useful
piece of information. But it's even more important to know there's been 5 inches of rain upstream in the last 24 hours.
All revenue and market share run downstream, after all, flowing inevitably from cause to effect. Early knowledge is
the essence of preparation. And as they're fond of saying at Johns Hopkins, "Fortune favors the prepared
mind."
