KM Metrics LO21900

Gavin Ritz (
Sun, 13 Jun 1999 18:55:41 +1200

Replying to LO21885 --

Dear Fred
Here is another way to link output to output capability:
Here is a discussion I had with Gray also on this list.

It is quite easy to specifically measure knowledge & skills, if a company
say uses a Balanced Scorecard (output performance) then one must measure
specific Skill or knowledge that effects that output (output capability).
I am doing that right now with a New Zealand corporation. Once this is in
place to measure training outcomes or any other output capability measures
specifically on the bottom line or on EVA is an easy task or for that
matter how capability effects output. It boils down to a simple ratio in
each of the company's KPI's. This basically takes care of the feedback
loop with a system (organisation).

Obviously it is not perfectly exact say as a mathematical formula but
good enough, for example if we want to increase EVA by 13% then we will
need so much skill & knowledge & that equates to an increase in 13%
increase in our sales force at a one to one ratio. The key is first to
have good output performance, a BSC is usually good enough. Then one has
to link through the organisation all the KPI's that effect that output if
they link okay, if they don't create them. Then one has generate those
competencies that effect those outputs. Then specifically those Learning
objectives (LO) that effect those competencies. At Telecom Yellow Pages we
have generated more than one thousand skill & knowledge LO's and that's
only for the sales reps. A rather big job. Then you have to measure
those S/K LO's, we have a computer programme for that. Once you have that
then one has a specific measure for output capability, once you have that
you can start to link it to output performance. Then you get ratio's i.e.
for customer satisfaction, market share, and other specific KPI's to their
specific output capability LO's. Pretty simple really. The perfect systems
approach. If you do this to the system them you get that output, is really
what we achieve by doing this. Once a company has that they stop doing
stupid things like wanting to increase sales by 25% when in reality they
do not have the capability in the system. Also it gives management another
tool to manage. There are some nice outputs though I can them measure
Intellectual knowledge easily. Measure training and all sorts of lovely
stuff. There can be little distortion in my system, it's called CAP.
Because specific skill & knowledge is needed to do certain tasks within
certain roles. The beauty about it is that, because new skills are always
required those are added from time to time and included in the
measurements. My process allows for so called requisite variety.

Sorry about the mouthful but to really appreciate the CAP (ability)
process it needs to be presented with lots of visual examples and basic
systems theory. I have really just copied Peter Senge's & Elliot Jaques'
ideas and put them into a easy usable form. Taken all hype and nonesense
out used the basic principles of how a system works. What cause effects
what cause effects what cause effects what. Senge's feedback loop. Basic
cybernetic theory. Kindest Gavin


Gavin Ritz <>

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