Beyond the Balanced Scorecard - ABM SMART · Beyond the Balanced Scorecard: Improving Business...

Beyond the Balanced Scorecard:

Improving Business Intelligence with Better Metrics

Mark Graham Brown is one of the world’s leading authorities on

performance measurement. He will share real-life examples of how

key performance indicators have become more sophisticated and

complex so that intricate aspects of performance can be more

accurately evaluated. This Best-Selling Author and former Baldrige

Award Examiner will teach you how analytics can be designed to

accurately measure & evaluate complex aspects of performance

such as corporate culture, customer relationships, communication

and intellectual capital. Learn how to evaluate your existing

scorecard, design and implement better metrics based on best

practices and measure employee morale quickly without formal

surveys.

Beyond the

Balanced ScorecardImproving Business

Intelligence with Better MetricsMark Graham Brown

Objectives

Evaluate your existing scorecard

and metrics

Develop analytic metrics

Obtain ideas on how to measure

difficult aspects of performance

Create a plan for improving your

metrics and scorecard

Types of Data Needed to

Manage Performance

Observation

Asking Questions

Conducting Studies

Reviewing Performance

Statistics (Balanced

Scorecard)

10 Stupid Measurement

Practices

1. Trying to link all metrics to

a vague vision

2. Annual metrics

3. Single question surveys

4. Superstitious process

metrics

5. No measures of

ethics/governance

10 Stupid Measurement

Practices

6. Arbitrary targets

7. Surveys

8. No external metrics

9. Worthless HR metrics

10. Measures drive wrong

behavior

Fourth Generation Scorecards

Most metrics analytics

Equal # of metrics for performance dimensions

Scorecards linked to strategic plan and mission

Use of scorecard software

Definition of links between metrics

Scorecards for all employees

Good mix of past, present, future metrics

3rd Generation Scorecards

Most measures link to vague vision versus mission

12-20 metrics typical

Customer, Financial, Internal, and Growth metrics

All singular metrics

Customer & employee metrics annual and lack integrity

Spreadsheets and PowerPoints used to review data

2nd Generation Scorecards

Many quality/financial metrics

30-50 metrics common

All singular metrics

More measures are better

Metrics for many levels – not just

executives

All measures are lagging

More financial and operational

measures than other types

Ist Generation Scorecards

Metrics just for senior management

80-90% of measures financial/operational

All lagging metrics

Periodic studies on non-financial performance

Scorecard drives short-term focus and poor decision making

Analytics vs. Singular Metrics

Hard to cheat on

Better data on

performance

Provides more

information

Decreases risk

and improves

analysis

A few key metrics

Easy to cheat on

Easier to collect

Provides a singular

number

Simplistic analysis

but greater risk

Requires many

metrics

APQC Best Practices Study

on Scorecards

Majority have scorecards with

some non-financial measures

Best scorecards found at: Bank

of America, Saturn, Crown

Castle, Jet Blue, L.L. Bean

Best were level 3, most level 2

Many problems even in best

scorecards

Old vs. New Scorecard

Architecture

Financial

Customer

Internal

Learning,

Innovation, &

Growth

Financial &

Strategic

Customer

Internal

People

External

Strategic Metrics

Linked to Vision

Assess Progress on major

strategies

2-4 Key metrics

Change as vision and

strategies change

People Analytics

Employee

Engagement/Satisfaction

Safety and Health

Intellectual

Capital/Knowledge and

Skills

External Metrics

Like weather for a pilot

Supplier/partner performance

Political factors

Economic factors

Prices of raw materials

Consumer/customer trends

Competitor success/failures

Major Information Missing

From Most Scorecards

How much do we aggravate our

customers?

How much do we aggravate our

employees &

suppliers/partners?

What is going on in the world

that could devastate our

organization?

What Managers Need to

Know

Level – Actual versus Target

Trend – Performance/Time

Analysis – Why is this

happening?

Action Plan – What are we

doing to improve/maintain?

Summary

Most organizations struggling with metrics

Most scorecards still include lagging singular metrics

Trend toward more simplistic measures dangerous

Analytics provide more data without more metrics

PB Views ideally suited to analytics-based scorecard