First, let us answer considering each process in isolation.
It is possible to consider 3 types of indicators:
For me, the most important is the effectiveness indicators, they measure if the purpose of the process is being met.
For example, for a company that has a strategic direction around innovation and has a process called “Develop new products” one can ask:
What is the purpose of such a process?
Quickly develop new products that are market hits.
Effectiveness indicators will measure “Quickly” and “hits”. For example:
Average time to market
Revenue from new products
Average price of new products
Efficiency indicators are the classic QCD indicators:
For example, for a company that installs wireless networks for telecom companies, with a process called “Install network”, efficiency indicators can be:
Number of daily nonconformities raised by the customer
Actual network installation costs versus budgeted costs
On-time delivery rate
Quantity indicators give information about the need to manage resources accordingly. For example, a number of incoming calls at a call center is a way of evaluating the need to contract more people to handle more calls without raising waiting time.
Should effectiveness indicators be always the indicators to follow? An organization is made of a set of processes but not all processes contribute in the same way to execute a strategy. Some processes are critical for strategy execution and for those processes’ effectiveness is of paramount importance. Some processes must exist but are not critical for strategy execution. If an organization is excellent at those processes it will spend more resources and customers will not value the difference. However, if an organization fails to comply with the minimum, customers will be upset and will be dissatisfied. So, for these processes’ efficiency is the best.