Beyond the Balanced Scorecard: Improving Business Intelligence with Better Metrics

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Theresa Farmer
8 years ago
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1 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.

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,

2 Beyond the Balanced Scorecard Improving Business Intelligence with Better Metrics Mark Graham Brown

3 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

how to measure difficult aspects of performance

4 Types of Data Needed to Manage Performance Observation Asking Questions Conducting Studies Reviewing Performance Statistics (Balanced Scorecard)

5 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

6 10 Stupid Measurement Practices 6. Arbitrary targets 7. Surveys 8. No external metrics 9. Worthless HR metrics 10. Measures drive wrong behavior

7 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

plan and mission Use of scorecard software Definition of links

8 3 rd Generation Scorecards Most measures link to vague vision versus mission 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

and Growth metrics All singular metrics Customer & employee metrics

9 2 nd Generation Scorecards Many quality/financial metrics 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

better Metrics for many levels not just executives All

10 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

lagging metrics Periodic studies on non-financial

11 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

Provides more information Decreases risk and improves analysis A few

12 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

found at: Bank of America, Saturn, Crown Castle, Jet Blue, L.

13 Old vs. New Scorecard Architecture Financial Customer Internal Learning, Innovation, & Growth Financial & Strategic Customer Internal People External

14 Strategic Metrics Linked to Vision Assess Progress on major strategies 2-4 Key metrics Change as vision and strategies change

15 People Analytics Employee Engagement/Satisfaction Safety and Health Intellectual Capital/Knowledge and Skills

16 External Metrics Like weather for a pilot Supplier/partner performance Political factors Economic factors Prices of raw materials Consumer/customer trends Competitor success/failures

17 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?

18 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?

19 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 analyticsbased scorecard

more simplistic measures dangerous Analytics provide more data

The Balanced Scorecard. Background Discussion

The Balanced Scorecard. Background Discussion The Balanced Scorecard Background Discussion Contents History and Evolution Important Business Drivers Key Concepts Case Studies & Success Stories 1 Business Intelligence (BI) and Knowledge Management