Tuesday, June 30, 2009

Performance measurement and the 90 percentile man

When I was in grad school in the mid '70s I had a few courses that dealt with ergonomics (the man-machine interface or connection). We learned how much of what we see and use, from chairs, to doors, to bathtubs, and even toilets, are designed for the "90 percentile man." That is, to accommodate the dimensions (height, width, weight, etc.) that fits within a 90 percent range of sizes. This is why some of the Seton Hall University basketball players, who happened to be on the same flight with me not long ago, could barely squeeze into their seats (I gave up my bulkhead seat to allow at least one to have some comfort, as I'm a shrimp at 6', but at least fit into the design range). To attempt to cover 100% of the population would be virtually impossible (and extremely costly), so designers aim for 90 percent.

It occurred to me recently that much of what we do in performance measurement is also geared to the 90 percentile man, or more correctly, organization. Perhaps not consciously, but the effect is the same, nevertheless. GIPS(R), for example, doesn't address every facet of investing. And while it could, it would expand the standards considerably and require a great deal more work. This makes it difficult, at times, for those firms (like the 7' basketball players) to properly fit in with what we do have.

Take overlays, for example. The standards are virtually silent on this topic. And even in publishing we rarely see much written on this subject. And yet it is a fascinating one that many firms are involved in. Could it be that it's outside the 90 percentile range? If it isn't, it's hugging the boundary.

I would argue that software vendors, too, aim for the 90 percentile firm. If they invest their time and effort to satisfy 100% of the market, they'd find few takers for some of the features they'd deliver and possibly not even recoup their investment.

When facing situations like this some firms (which are near or outside the 90% range) are sometimes frustrated to find little or no satisfaction or answers. This doesn't mean that the extremes can't be accommodated. Just as airlines provide seat belt extenders for those individuals who are a tad larger than what the standard seats are meant to handle, standards and software can be expanded, too. Sometimes it requires some effort on the part of the firm or individuals in the industry to champion their causes for them.

To stay within the 90 percentile range is generally a good business decision for software and designers and standards makers, although there are times when some expansion is warranted.

There's more to be said on the issue of overlays, so stay tuned!

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