The Difference Between a Singular Measure and an Analytic Measure

This is the continuation of the transcript of a Webinar hosted by InetSoft on the topic of "Business Intelligence Agility" The speaker is Mark Flaherty, CMO at InetSoft.

The difference between a singular measure and an analytic measure is singular measures tend to be easier to manipulate and cheat on. Sales in dollars is a singular measure. The chance of you having a single measure tell you what you really need to know is very slim because most aspects of performance are fairly complicated. You might need multiple measures to track them.

So analytic metrics or index measures are harder to manipulate. They are more likely to give you a real view of what’s going on, and it still allows you to have a few key metrics because you start out with a few key summary gauges at the top, and then if those are yellow or red, then you can drill down and look into the details of what’s underneath it.

Credit Score as an Example of An Analytic Metric

Some personal examples of analytic metrics that we’re familiar with is we all know something about our credit score. Most of us have no idea what the exact formula is but we know that it’s some number 400 and 800 and that the bankers use this as a way of measuring the amount of risk in giving someone a loan, and we know that certain things cause it to go up and down. If you have a credit card with \$5,000 limit, you haven’t used it for two years, and you cancel the card, your credit score actually goes down which is counterintuitive. You’d think it would go up, but you’re getting rid of a line of credit. So, that’s a much better measure than just looking at one number, like your assets divided by your liabilities.

So if I saw that my real age was five years older than my birthday’s, I’d have to drill into the data to find out what’s going wrong and what I should do about it, so that’s the concept, is you start with a high level summary gauge and then you have the intelligence and the drilldowns underneath it to be able to analyze what’s going on.

Most organizations are not that sophisticated, and many companies will admit that their scorecards are still a work in progress. They feel that they still have a lot of work to do on their measures. Some pretty big, well run companies struggle with this stuff. So everybody struggles with this stuff, and this is very hard to do well. As soon as you think you got your metrics figured out, something changes, and you need new ones or need to delete the old ones.

What I find is that typically the strategic measures are limited to two to four on your scorecard. If 15 or 20 is the total number, then two to four of them are probably strategic in focus. That may change if your organization is going through a big upheaval. In that case, half of their metrics might be strategic in focus, but in a typical company where it’s business as usual, and we just want to grow a little bit, then two to four is probably okay. The rest of them talk about what are you doing to keep the lights on; performing your mission, making your products or whatever you do for a living.

Most organizations care about three broad things when it comes to their people so these might make up a good starter list for the people measures on your dashboard. First of all, most companies want to know whether people get up in the morning and dread coming to work or enjoy coming to work. So some measure of employee engagement or satisfaction is probably pretty important, but doing that with an annual survey is also a big mistake, so you have to figure out how you measure it more frequently. If you survey people more often you’re going to make their satisfaction go down just because you’re bothering them with stupid surveys when they’ve got work to do.

Another thing you want to do is probably measure safety and health. Manufacturing companies typically have pretty good safety measures, but most of them are heart attack measures. If somebody is going to get hurt, put it down on a chart. So you need some predictive measures, too, such as safety audit scores or behavioral measures.

More and more companies are starting to measure the health of their employees. It costs them money, so they want to encourage their employees to be healthy. Finally, I think you want to know about whether you have the right people with the right skills. You might have 50 different measures of intellectual capital. So you might try to take those 50 different dimensions and roll them up into one or two indexes that help tell them whether or not they have the right people with the right skills.

Case Study: A Sailboat Manufacturer Using Analytic Scorecards to Track Employee Health

OceanSail Yachts is a leading sailboat manufacturer located in the Pacific Northwest, employing over 1,000 workers across various departments, from design and engineering to production and quality control. The company has built a strong reputation for producing high-quality custom and semi-custom sailboats. However, the physical demands of the industry—long hours, repetitive tasks, and the hazards associated with manufacturing—meant that employee health was becoming a growing concern.

Recognizing that a healthy workforce is essential for maintaining productivity and reducing absenteeism, OceanSail Yachts implemented an Analytic Scorecard system to track and improve employee health. This case study explores how the company used this tool to create a data-driven approach to employee well-being, leading to significant improvements in both individual health outcomes and overall operational efficiency.

Challenges Faced by OceanSail Yachts

Before implementing the analytic scorecard, OceanSail Yachts faced several challenges regarding employee health:

1. High Absenteeism: Absenteeism rates were rising, especially in physically demanding roles like welding, assembly, and maintenance. This was disrupting production schedules and increasing costs.
2. Increased Work-Related Injuries: The repetitive nature of certain tasks in sailboat production led to higher incidences of musculoskeletal disorders (MSDs) and other work-related injuries.
3. Mental Health Concerns: Long working hours and production deadlines contributed to stress, burnout, and declining mental health among employees, which wasn't being tracked in a systematic way.
4. Reactive Health Interventions: Health interventions were often reactive, addressing issues only after they became severe. The lack of real-time data made it difficult for managers to identify early warning signs of health deterioration.
5. Limited Health Data Visibility: Health and wellness data were siloed across different departments, such as HR, health services, and production management, making it difficult to create a cohesive view of employee well-being.

To address these challenges, OceanSail Yachts needed a solution that provided proactive insights into employee health, could monitor trends in real-time, and offer actionable data for early interventions.

Solution: Implementation of an Analytic Scorecard

In 2023, OceanSail Yachts partnered with a health analytics company to develop and implement an Analytic Scorecard system designed to track a wide range of health indicators for its employees. The goal was to consolidate various data sources into a unified scorecard that management and HR could use to monitor and improve employee well-being.

Key Components of the Analytic Scorecard

1. Data Sources:

• Health Checkups: Employees participated in regular health screenings, including blood pressure monitoring, cholesterol checks, body mass index (BMI), and general fitness assessments.
• Wearable Devices: Employees in physically demanding roles were provided with wearable devices to monitor daily activity levels, heart rates, and sleep patterns. These devices helped detect early signs of fatigue or overexertion.
• Mental Health Surveys: Quarterly mental health check-ins were conducted, focusing on stress levels, job satisfaction, and overall well-being. These surveys were anonymized to encourage honest feedback.
• Sick Leave and Absenteeism Records: Data from employee attendance and sick leave were integrated into the scorecard to track patterns in absenteeism and potential correlations with health issues.
• Injury Reports: Historical data on work-related injuries were incorporated to help identify risk factors and develop prevention strategies.
2. Health KPIs:

• Employee Health Index (EHI): A composite score calculated from health checkup results, wearable device data, and self-reported wellness metrics. The EHI provided an overall snapshot of employee health for both individuals and teams.
• Absenteeism Rate: A measure of how many workdays were lost due to illness or injury, broken down by department, role, and individual employee.
• Injury Risk Score: A predictive score based on factors such as repetitive tasks, physical demands, and past injury data, indicating the likelihood of future injuries.
• Mental Health Index: A score derived from mental health survey responses, tracking employee stress, job satisfaction, and risk of burnout.
3. Dashboards and Visualizations:

• Health Heatmaps: The scorecard included heatmaps that highlighted departments or roles where employee health was at risk. This allowed managers to quickly identify problem areas and take preventive measures.
• Trend Analysis: Visualizations of health trends over time helped management understand whether interventions were working and how health metrics were improving or deteriorating.
• Alerts: Automated alerts were triggered when an employee's health score fell below a certain threshold or when wearable device data indicated high fatigue levels. This allowed HR and managers to intervene proactively.
4. Predictive Analytics:

• Using historical health data and machine learning algorithms, the scorecard could predict which employees were at higher risk for illness or injury. This allowed OceanSail Yachts to offer targeted support, such as modified duties, additional rest breaks, or ergonomic adjustments.

Implementation and Employee Engagement

To ensure successful implementation, OceanSail Yachts involved employees early in the process. The company hosted workshops and meetings to explain the benefits of the health monitoring system, emphasizing that it was designed to support their well-being, not to micromanage their performance.

Employees were given control over their personal health data and could access their individual health scores through a secure mobile app. This transparency helped build trust, as employees could see how their data was being used to improve workplace conditions and health policies.

The company also created wellness programs tied to the scorecard data, offering incentives like gym memberships, fitness challenges, and mental health days to encourage employees to engage in healthier behaviors.

Results and Outcomes

Within a year of implementing the analytic scorecard, OceanSail Yachts saw dramatic improvements in employee health and productivity. The following key results were observed:

1. Reduced Absenteeism

• The Absenteeism Rate dropped by 18% in the first year, with fewer sick days taken, particularly in departments with physically demanding roles. Employees who had previously taken frequent time off due to health issues were more likely to stay healthy and maintain consistent attendance.
• Real-time alerts helped managers identify early signs of health problems and offer support, such as additional rest or temporary adjustments to workloads, reducing the need for long-term sick leave.

2. Lower Injury Rates

• The Injury Risk Score helped the company proactively prevent workplace injuries by identifying high-risk employees and adjusting their tasks or providing ergonomic solutions. This led to a 25% reduction in work-related injuries.
• By monitoring fatigue and physical strain through wearable devices, OceanSail Yachts could prevent overexertion, particularly in employees working long shifts or performing repetitive tasks.

3. Improved Employee Wellness and Mental Health

• The Mental Health Index improved by 20%, with employees reporting lower stress levels and higher job satisfaction. The company's focus on mental health, including the introduction of wellness programs and mental health days, contributed to this positive shift.
• Employees noted that they appreciated being heard through the quarterly mental health check-ins and felt more supported by management, which reduced burnout rates.

4. Increased Productivity

• With healthier employees, production efficiency improved across all departments. Productivity rose by 12%, as fewer employees were taking sick days or suffering from injuries that affected their performance on the job.
• Departments that had been identified as high-risk for absenteeism and injuries experienced greater workforce stability, allowing for more consistent production output.

5. Cost Savings

• By reducing absenteeism and injuries, OceanSail Yachts saved an estimated \$500,000 in labor costs, which included reduced overtime pay for employees covering absent workers and lower medical costs associated with workplace injuries.
• The reduction in turnover—particularly among skilled workers who had previously left due to health-related issues—helped the company save on recruitment and training costs.
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