You can't manage what you don't measure. It's one of the most time-honored management maxims. Yet as with all such wisdom, it's as often ignored as it is adhered to. The feature article in this issue on labor standards for forklift operations highlights the inherent challenges and abundant opportunities of performance measurement. The piece reports on the impressive productivity gains that warehouses and distribution centers have recorded by implementing labor standards—and then consistently measuring performance against them. In one case, the introduction of standards (coupled with the introduction of new radio frequency technology) helped increase the number of pallets handled per operator from 15 to 22 an hour. Research conducted across a range of industries shows similar productivity increases for activities such as picking, replenishment, and receiving/putaway.

Though the standards are producing excellent results in the cases cited in our story, they are also generating some critical attention—particularly from the labor unions. The labor people have a valid point when they argue that in the rush for enhanced performance, companies must ensure that any measures instituted are fair and equitable. We agree, and to that would add a few other essential components of a successful performance-measurement program. Specifically, these initiatives must:

Measure the right things. Measures and standards need to be established for relevant activities that directly add to an organization's productivity or safety. Setting measures for anything else only adds to the administrative burden while diluting the impact of the really important measures.

Be clearly communicated. People need to understand how their performance will be judged. The measures must be fully explained. And any misconceptions or points of confusion should be addressed before the measures are put in place. This is more than just good business practice; it's the right thing to do.

Be consistently applied . Nothing undermines a measurement program more severely than the perception that the measures are not being applied uniformly—that is, that one person or department is being measured less aggressively than others.

Translated into action. Simply capturing the measurement data is not enough. You need to do something with it to help your people and your operations succeed. Using the data as the basis of constructive programs also builds credibility for the measurement process throughout the organization.

A new performance-measurement program is not a silver bullet that overnight will make everyone happier and more productive. But the existence of measures that are well conceived, consistently applied, and aggressively acted upon seem to be a defining feature of just about every successful company we can think of.