SFO Blog - Helping You Build Your Company into a Strategy Focused Organization

Real World Advice for Setting Targets for Your KPI’s

If you and your team are going to invest time and effort into measuring the performance of the things you do in your business to put your strategy into motion and move your company forward towards an ultimate success goal, you’ll need indicators (KPI’s).

Of course, choosing the right KPI’s is your first step. The next step is to set performance targets, or a “comparator”, for each KPI. Using performance targets is an essential part of the measurement process. In addition to providing insight into the adequacy of current business performance, targets help you use measurement to learn about your business and make pro-active adjustments when they’re required.

I have written in the past about the art (and science) of setting performance targets and, while that advice is solid, it’s pretty “textbook”. That is, it’s based on theory and best practice, however, my experience has been that conditions “on the ground” rarely lend themselves to the application of theory. In fact, the textbook approach to target setting (i.e. leveraging budget targets or benchmarking historical performance to set incremental targets) can often be impractical. This is particularly true when you’re trying to create a strategy-focused scorecard that extends past the usual financial and operations metrics.

When your company is making the leap to measuring strategy versus operational activities you often need to use “new” KPI’s that don’t have a convenient data trail. Problems also arise for companies when they try to add measurement discipline into their business management toolkit for the first time.

So, what are some practical options for setting reasonable performance targets when you’re in one of these situations? Here are the steps I take my clients through to set targets for first time KPI’s:

 

1 Establish what “success” looks like for your business at a defined point in the future

What is your business trying to achieve by a certain date in the future? What does “success” look like? What would we measure and how would you know that success has in fact been achieved?

Answering these questions requires some big picture thinking at the total business level. If you are lucky, you might even have some performance data to inform your discussions. Once you answer these questions, you’ll have a metric (or metrics) defined, a performance target, and a timetable for achieving that target.

EXAMPLE: Grow revenue from new products by 25% over the next 5 years.

 

2 Break down your vision for business success into measureable annual milestones

Now, looking at your business success metric, target and timeframe, think about where your company’s performance is today. Is there a gap and how big is it? If you have data to refer to that’s great! If you don’t, make a ballpark estimate on the size of the gap. Then, using this information, plot out a series of annual targets for your success metric that are realistic and will get your company from today’s performance to the level you defined for your future date.

EXAMPLE: % revenue growth from new products

Year 1	Year 2	Year 3	Year 4	Year 5
0%	3%	8%	17%	25%

 

 

3 Determine how the business activities your KPI is measuring would be performing at each milestone to support the achievement of your measureable business success goals

Now that you’ve got the big picture defined and the progression from today to the future plotted out, take one of your KPI’s and think about the business process/work it represents/measures.

Think about how that business process contributes to the achievement of your business success goal. Don’t forget to also think about how it combines with other business processes or projects to achieve the success goal. Now, based on this thinking, describe how the process needs to perform over the next few years if it’s going to play its part in helping your company achieve each of the annual targets you’ve set for your success goal. These descriptions might include a number but it’s more likely that they’ll be a word description.

EXAMPLE:

KPI: Product Idea Conversion Rate

Relevant Business Activity/Process – Product Idea Generation

Year 1: Get better insights into customer needs and the solutions they need/will buy – leverage technology and analytics; Develop processes and capabilities to clearly align product ideas with customer needs and solutions

Year 2: Demonstrate clear customer need alignment in 70% of new product ideas – Increase speed of new product ideas into the product development process 

Year 3: Demonstrate clear customer need alignment in 100% of new product ideas – optimize speed of new product ideas into the product development process

Year 4: Achieve top 10 rating in the marketplace – customers rating our new products as products they want and need; Develop ability to anticipate emerging trends in customer needs and the solutions they need via advanced analytics

Year 5: Achieve top 3 rating in the marketplace – customers rating our new products as products they want and need  

 

4 Set the target for the KPI at a level that aligns with/supports this year’s success goal

Now, leveraging the information you created in step 3, set a performance target for year 1 ONLY for the KPI in question. (there’s no point in setting targets beyond year 1 at this point because we’ve still got some learning to do)

EXAMPLE:

KPI: Product Idea Conversion Rate (% of product ideas that get through our product development stage gates AND generate forecasted sales in the marketplace)

Year 1 Target: Maintain current performance (i.e. the same results) for Product Idea Conversion Rate

 

5 Begin collecting performance data and notice how actual results compare to target

Now it’s time to get busy collecting data for your KPI and comparing your actual results to the year 1 performance target. Collect actual results data using your year 1 target for 2 – 3 measurement periods and then pause to see what the data may be telling you.

 

6 Review and analyze

With some actual versus target data in hand, it’s time to look at what you’ve got. Asking and answering a few key questions will give you some valuable insights.

How are actuals doing against your year 1 target?

Is actual performance above, at, or below target on a consistent basis?

What kind of performance are you seeing on your success goal with this KPI performing at its current levels?

Are actual performance levels (success goal and KPI) moving us forward and is it at the right/expected pace?

 

With the answers to these questions in hand, move on to step 7.

 

7 Learn and adjust

Step 7 is all about learning (a) whether the targets you have set for your success goal and KPI are appropriate; and (b) where today’s business performance stands versus where you need to be on the journey to your ultimate success goal (i.e. is there a performance gap today and if there is, is it bigger than, smaller than, or as you expected when you were completing steps 2 – 4?), and then making some decisions about where to adjust (if needed).

What kinds of adjustments do I mean? Sometimes you decide that you need to change targets/the progression of targets because you discover that the performance gap is bigger than you thought it was. However, sometimes you discover that the performance gap is bigger than expected and you decide that, rather than adjusting targets, you’re going to invest in building capabilities to perform at higher levels. In other words, you decide to go after the performance gap issue itself. The adjustments you make will depend on what you learn and how you want to respond.

 

Taking this learning-based approach to setting targets for new KPI’s works in the real world and has lots of important benefits for you and your business that extend beyond successfully implementing measurement. Here’s just a few:

• It gets you and your team thinking and talking about what you are trying to achieve in your business in both quantitative and qualitative ways - getting everyone clear about what success looks like for your company has a big impact on accelerating results;
• By helping you link KPI performance targets with desired business results, measurement feels less theoretical and more relevant to your business performance management efforts;
• You can get started with measurement sooner than later (no waiting to create a data trail before setting targets); and
• Because you have more insight into your business than you did before, you and our team can make the evidence-informed business decisions that drive greater business results and outcomes much faster.

 

 

A Little Less Measurement, A Lot More Conversation

For someone who began their career in strategy management as a Balanced Scorecard practitioner, it might be a bit strange to say this but here goes:

 

In the upcoming year I’d like to see executive teams spend less effort collecting data points and more time talking about what their data is (or isn’t) telling them.

 

Now, don’t get me wrong – I’m not letting anyone off the measurement hook. Gathering performance data is an important activity but sometimes business leaders can take it too far. From obsessing about the “perfect” or best in industry metrics to looking at soup to nuts data sets, I see too many executive teams focusing their energy and resources on collecting results (including junk numbers) rather than investing time creating a collective understanding of the meaning behind the data.

 

In an age where no one has a minute to spare, it’s important that business leaders invest their business management time and effort in activities that have the greatest impact. And let’s be clear – collecting and looking at volumes of data that may or may not be crucial for informed business decision making is not the best use of executive, and organizational, energy.  

 

When it comes to successful business management, the smart place to invest time is in connecting the dots between data points, figuring out what the meaning is, and then deciding what (if anything) to do with that insight.

 

In my experience, the best way to do this is through discussion and conversations.

 

Here are a few steps that executive teams can take to add more meaning-making conversations to their business management activities:

 

1. Focus on a Clear Reason for Measurement

Executive teams often end up looking at huge amounts of results data simply because they haven’t decided on the questions they want the data to help them answer. Questions like “Are we doing the right things right?”, “Are we delivering an experience to our customers that they still value?”, and “Are we building the right employee capabilities for future business success?” all require specific metrics to help answer the question. Lack of clarity in your reason for measurement results in a scattershot approach to data collection and an explosion in the number of numbers you regularly have to look at.  

 

2. Focus on Data Quality Rather than Quantity 

Once you know what questions you want data to help you answer it’s easier to select a focused set of quality metrics and have confidence that they’ll give you the information you’ll need. Looking at a smaller, more manageable number of data points makes it easier to understand the story your results are telling you, connect the dots, and see the bigger picture (and its implications).  

 

3. Use Conversations to Transform Data into Insight

Data without context isn’t that useful and can be misleading. While data is evidence, without context, it’s still open to interpretation. Commentary, analysis, and discussions add context to data and, when many people participate in the conversation, they are able to develop a shared understanding of the meaning behind the data. The process of conversation is critical for transforming data into shared insight that everyone in the organization can then use to determine next steps and make informed decisions with context.

 

 

 

While we can agree that gathering results data is important for business success, I’ve learned that it’s only the beginning. What really enables sustainable business success is the creation of the shared insight that enables informed decision-making across your organization. In a world that seems to be biased towards valuing action over thinking, conversation is often dismissed as a luxury or an impediment to progress. However, nothing could be further from the truth because discussion is often the best route to making faster, higher quality business decisions.

 

This year, why not make a commitment to giving conversation a higher priority in your business management activities?

 

Your reward will be a more engaged team that’s focusing their energy on creating new (and shared) insights that enable the decisions necessary to manage your business more pro-actively moving forward.

Activity ≠ Impact (and the ROI of measurement clarity)

Measuring the stuff we do, and achieve, in business is critically important – performance data and results information give us necessary insight into what’s going on inside AND outside of our organization. Many organizations invest heavily in measurement so it’s important to be sure that that time and effort is spent gathering the right information.

Unfortunately, I’m not convinced that organizations regularly remember to take the time to think this through before they get going with measurement. Sometimes they aren’t given the option when a well-meaning funder, government agency, or Board places misplaced measurement demands on them.

Whatever your story is, your organization must be laser focused on maximizing the value you are getting out of the data and results you are collecting.

So how exactly can you do this? The trick is to be sure about (1) what you are hoping to learn from measurement and/or what question(s) you are trying to answer through measurement and (2) what you intend to use the information you get from measurement for. In other words, the key to getting the greatest possible return on your measurement investment is to be crystal clear on your purpose for measurement.

Getting clear on the “why’s” and “what’s” of your measurement activities isn’t really that difficult – you just need to take the time to talk it out amongst interested parties and get agreement before you get started. Here’s a list of some of the typical purposes for measurement I see:

• Compliance reporting – Is our performance reliably meeting regulatory standards?
• Strategy management Q1 – Are we doing what we said we were going to do?
• Strategy management Q2 – Is our strategy/are our efforts producing the expected results?
• Strategy management Q3 – Are our results still delivering value to our customers/stakeholders AND differentiating us in the marketplace?
• External benchmarking – How does our performance compare to others in our industry? Where do we stand relative to our competitors?
• Learning and improvement – Do we have any performance gaps and how much do we need to improve? What are we doing well, why, and how can we transfer successes to other parts of our organization?
• Operational management – Are we doing things right and what are the results?
• Impact assessment – Are the results we’re producing/enabling having the reach we’ve planned for? Are we creating the community/societal outcomes we’re aiming for?    Etc.

It turns out that you’ll probably have multiple purposes for measurement across your organization. The key, however, is to realize that different purposes for measurement mean that you’ve got to have different types of metrics in your toolkit.

Being sure to carefully consider the unique purpose for measurement for any given measurement situation will help prevent a misplaced measurement scenario.

Let me show you what I mean with an example of a frequent purpose for measurement – metrics mismatch:

Let’s say we are running an English as a Second Language program for newcomers and we want to assess the impact our program is having in helping newcomers become contributing members of the community. Since we wish to assess impact, we are probably looking to answer the following questions:

• Are we helping as many people as we’d planned leave our program with the standard of English literacy we’d established for grads of our program? (i.e. Are the results we’re enabling having the reach we’ve planned for?) and/or

• Are we helping to make it possible for newcomers to participate in and contribute to the community socially and economically? (i.e. Are we creating the community/societal outcomes we’re aiming for?)

Beginning with these questions in mind makes it pretty obvious that it will take very specific metrics to give us the answers we need and help us assess the impact of our program.

But let’s say that we decide to jump into measurement, sidestepping a discussion about our purpose for measurement and the questions we’d like to answer. Not unlike many organizations, we might find that we end up measuring the completion of a project to update the ESL curriculum. Or, we might decide to measure the growth in the number of ESL classes we offer to newcomers. And we might even invest in a process to track and measure the average number of newcomers actually participating in a certain percent of their ESL classes.

And while these may be important things to measure (they do give us critical information about our ESL training activities), the problem with these metrics is that they help answer a strategy management question (“Are we doing what we said we were going to do?”), not our impact assessment questions.

Eh violà! If we try to apply these metrics to our attempt to assess impact we'll end up with a measurement mismatch!

 

Unfortunately, measurement mismatches like this happen every day in organizations. The result is sub-optimization of the time and energy organizations invest in their measurement activities and the feeling that measurement isn’t delivering the expected return on the effort.

So here’s a quick recap of the steps you can take to minimize the risk of measurement misalignment and maximize the value you are getting out of the data and results you are collecting.

For any scenario where you are considering measurement:

1 Begin by developing consensus on the purpose(s) for measurement

2 Develop the key questions you’d like to be able to answer through measurement

3 Identify a short list of metrics that will give you the data, information, and insight you need to answer your key questions with confidence

4 Test out these selected metrics and see whether they do the job (if they don’t change them out and try something new), and

5 Regularly review and validate your purpose for measurement and the associated key questions – be open to change and evolution (and remember to change your metrics accordingly!).

Measurement is an important activity for all organizations but no one wants measurement to become an effort and money black hole. Your goal should be to ensure that you are getting the most possible from your investment in measurement. Putting your purpose for measurement at the center of your metric selection and measurement activities will go a long way to ensuring that you receive the maximum value for your measurement investments.

 

In a Successful Balanced Scorecard, Indicator Relevancy Includes a Reality Check

A golden rule for selecting powerful Balanced Scorecard indicators is to focus on the attribute of relevancy. That is, any given indicator must be a good representative of the thing you are trying to measure. Without indicator relevancy, any Balanced Scorecard quickly loses its power and credibility as a strategy management tool.

The best way I’ve found to ensure indicator relevancy is to begin with a good strategic objective definition. A solid strategic objective definition lays out the playing field and provides a little more detail as to what’s included under the strategic objective. Equally important, a strategic objective definition outlines the boundaries of the strategic objective. Essentially, a well written strategic objective definition gives an organization and its employees guidelines on what’s in and what’s out when it comes to executing the strategic objective. This component of a strategic objective definition also plays an important role in helping organizations identify which business processes have the highest potential as measurement sources.

Another important part of a good strategic objective definition is a statement of the importance of the strategic objective. When written to convey the benefits and/or customer/stakeholder value resulting from the execution of the strategic objective, this part of the strategic objective definition can point us in the direction of candidate outcome and impact indicators.

When you write strategic objective definitions that include these important elements it’s easy to see how they offer a gateway to selecting highly relevant indicators.

However, it’s important to remember that, when an organization is using their Balanced Scorecard as part of their internal strategy management system, relevancy has an additional component. In these situations, a relevant indicator must also be reflective of where an organization is in its business and strategy execution life cycles.

When organizations search for candidate indicators for a strategic objective the most logical place to look is at the business processes associated with that strategic objective. Why? Since the execution of strategy, and the majority of the work done in a business, is largely achieved through the completion of critical (i.e. strategic) business processes, business processes naturally act as a great reservoir for finding relevant indicators.

However, sometimes organizations find that they have an orphan strategic objective on their hands – that is, one with no associated/supporting business processes.  While this might seem improbable, it happens more frequently than you might imagine. For example, when a company is just starting out or when an existing organization is doing a business pivot or launching out into a new strategic direction, it’s not unusual to find that the business process infrastructure necessary to support strategy execution is missing.

Without supporting business processes your measurement options are limited. However, let me show you how organizations can deal productively with this scenario. 

When you have a strategy execution gap (i.e. no supporting business process infrastructure), the usual solution for shoring up the gap is to launch a project designed to create, launch, and entrench the required (new) business process within the business. Sometimes these projects can be completed quickly but, in my experience, they often take some time to run their course. Rather than wait several months or quarters for a project to conclude and the new business process to be available for measurement purposes, organizations will often include a project-based indicator on their Balanced Scorecard. While the process-based indicator may be the ultimate objective for any given strategic objective, it’s perfectly fine to leverage a project-based indicator in the interim.

While taking this approach may not seem very strategic it is in fact the right thing to do over the short-term if you (1) want to move your organization to a place where it’s able to execute your strategy efficiently (i.e. have the necessary business process(es) in place to support the execution of any given strategic objective), (2) you want to manage that forward progress, and (3) you want to have an indicator on your Balanced Scorecard that is relevant to the strategic objective AND the current state of reality within your organization. However, once the project has concluded and the business process is in place and functional, it’s time to replace your project-based Balanced Scorecard indicator with a relevant process-based one.

Making the move to process-based indicators, and then keeping an eye on the evolution of the type and mix of the process-based indicator you select (i.e. input, in process, output, or outcome), are all part of ensuring that your indicators reflect the reality of your organization’s current state of maturity at all times (key if your Balanced Scorecard is going to remain relevant for internal strategy management purposes).

Many organizations I work with are uncomfortable with this dual approach to indicator relevancy. They don’t like the idea of including project-based indicators on their Balanced Scorecard because it feels too transactional and operational. The biggest complaint I hear is that project-based indicators are measures of activity and not impact. In fact, I also hear similar complaints when we include process-based indicators other than output or outcome indicators on an organization’s Balanced Scorecard. Mostly, these organizations don’t like the idea of evolving and changing their Balanced Scorecard indicators.

I usually find that these complaints are a sign that an organization is not keeping the more comprehensive definition of relevancy in mind. Often these organizations end up delaying the deployment of their Balanced Scorecard until their organization is in a strategically mature state – which is too bad because waiting represents an opportunity lost.

And more often than not that ideal state never arrives.

Ensuring indicator relevancy is a critical tenet for creating a solid Balanced Scorecard but it’s important to expand your definition of relevancy if you want to use your Balanced Scorecard as a powerful tool for internal strategy management. Remaining open to selecting representative indicators that are also reflective of where your organization is in its business and strategy execution life cycles means that you don’t have to wait until your organization is in a fully mature state to adopt a Balanced Scorecard approach to business performance measurement and management.

Using your Balanced Scorecard in this way means that you have a method for assessing and managing your organization as it progresses successfully from crawling to walking and eventually running from a strategy execution perspective. Taking the opportunity to manage your organization through each stage of the journey via the Balanced Scorecard translates into more efficient progress through these stages – accelerating the achievement of your strategic objectives, mission, and, ultimately, the impact on your customers, stakeholders, and business results.   

     

The Unexpected Value of Manual Data Entry into Your Balanced Scorecard

At some point in their strategy creation and execution/Balanced Scorecard journey, almost all organizations and business leaders come to the realization that, to experience the benefits of their investment in, and commitment to, strategy management they would be wise to leverage the power of technology.

Let me be clear that I am still saying that strategy management (in general) and the Balanced Scorecard (in particular) is NOT a technology project – far from it. However, today, more than ever, organizations can, and should, leverage technology to enable their strategy management processes, activities, conversations, and interactions.

With all the technology advancements and options available to us, this is absolutely the best possible time for organizations to finally slay the strategy execution dragon. Though it’s not the complete answer, technology goes a long way to removing past barriers to strategy execution success.

While this post is not meant to be a primer on technology selection criteria (I wrote a comprehensive blog on that topic a few years ago), I think that now is a good time to take a closer look at one capability that most performance management platforms tout and that many organizations look for in an application: automated data upload. The automation of data upload refers to the ability of a performance management application to extract data from internal source files and import that data into the application itself - most commercial applications available today make it pretty easy for this activity to happen.

From an organization’s perspective, automated data upload is very seductive. It suggests a reduction in the work needed to get results data into the performance management application and the hands-off factor offers some assurance of data quality. Yes – automated data sounds like a “must have” capability that will make the implementation of strategy management much easier and more efficient.

However, before you can automate data uploads into your performance management system, your data must be available in a compatible electronic format. This can be problematic for many organizations. You see, in my experience, results data is often located on local desktops and in a variety of different formats. In some cases, results exist in paper files or on daily data capture sheets, though as we get further into the technology age, this situation occurs far less often than it used to.

It isn’t unusual for the results data you want to include in your performance management application to exist in a combination of electronic and manual formats. When this is the case, the dream of fully automated data upload can’t happen without some level of effort.

As for ensuring data quality, automated data uploads will not magically fix an existing bad data problem – data gets uploaded in “as is” condition. Yes – removing manual data entry from the picture eliminates data transposition errors (for example), however, unless you complete data quality checks somewhere in your pre-upload data handling process, data quality can still a problem in an automated data upload world.

The truth is that, for most organizations, automated data upload still requires hands-on manual work. So why wouldn’t organizations just consider opting for the manual data input approach? It sounds ridiculous in an era of advanced technology but hear me out because it actually turns out that manual data entry has some unexpected benefits you may not have thought of before.

When you go the manual data entry route your first step, after determining where the data is coming from, is to assign people to data entry (“owner”) roles. The key here is to select people who normally touch the targeted results data as part of their regular work. Rather than asking them to submit their data to a data warehouse (in preparation for data upload), why not have them enter their data straight into the performance management application? In my experience, a distributed network of data entry owners results in each data entry person entering only a small number of data points into the application. This keeps the per person data entry burden minimal PLUS it has the benefit of giving individuals who are familiar with the data the opportunity to inspect results as they go into the application. When something doesn’t look quite right, knowledgeable and empowered data owners can investigate and resolve data issues before results are added into your performance management application.

When you look closely you see that manual data entry doesn’t really increase the administrative work associated with assembling results data for most organizations, AND it performs a necessary data quality assurance function.

However, there is another, more important benefit to manual data entry that business leaders shouldn’t overlook. Manual data entry within a distributed data owner network gives more people across your organization a role in, and an opportunity to interact with, your organization’s business strategy. In fact, in my experience, data owners develop significant feelings of ownership for both “their” data and the organization’s strategy as a result of their accountability and role. In addition, data ownership allows more people to physically connect with your strategy and see their contribution (and that of their team) to the achievement of strategy.

Why is creating a culture of strategy ownership important? Because this employee ownership is a critical factor in strategy execution success and employee engagement with your strategy is a key enabler of a strategy ownership culture.

One argument that I hear against manual data entry is the risk of data/results manipulation. While this is a concern worth thinking about, I will say that the risk is actually low when your strategy governance model includes indicator commentary owners and the review of performance management results data in an open forum. Having results data open to inspection and questioning by others has the effect of minimizing acts of results manipulation. Essentially, an open approach to strategy management plays a preliminary auditing role, resulting in a fairly high degree of quality assurance and data integrity.

 

Realistically, most organizations end up taking a hybrid approach to getting data into their performance management application – some results will be automated but more will require manual data entry than expected. It turns out that manual data entry isn’t as much of an administrative and organizational burden as business leaders may expect  - when you look closely, automated data upload isn’t really a “hands-off” process after all. More importantly, the use of data entry owners* has some unexpected and powerful benefits that support enhanced strategy execution success and, ultimately, the achievement of desired business performance results and outcomes.

 

*Bonus insight:

Organizations that are able to automate the upload of their performance results data may still wish to consider assigning data owners, however, the role will be primarily focused on data quality review. Asking specific employees to inspect the quality and accuracy of uploaded performance results data allows your organization and employees to experience the benefits of data ownership while still leveraging the data upload automation capabilities in your selected performance management application.

 

What is your organization’s experience with manual or automated data upload into your performance management application? How has your data entry approach helped or hindered your organization’s strategy execution and management efforts?

 

Tips for Measuring Value for Money in Healthcare Organizations

Value for Money is an important concept that is receiving increased attention in the healthcare sector - the sense of urgency around demonstrating value for money continues to accelerate for Canadian healthcare organizations.

This heightened focus has triggered a closer look at what we really mean when we talk about ensuring value for money (VfM). While some limit their perspective on VfM to the financial elements of a transaction or investment (including an evaluation of the associated elements of economy, efficiency, and effectiveness), others have advocated for a broader perspective that includes integrating other important elements (such as strategic fit, potential health outcomes, and implementation risks) into the framework for thinking about value for money. To learn more about VfM concepts, please click HERE to read a previous blog post on this topic.

While the increased emphasis on achieving value for money has stimulated deep thinking and discussion among healthcare leaders, it has become critical for healthcare organizations to demonstrate that they are achieving optimal value for money. Of course, the usual way of doing this is through evaluation and assessment – particularly because governments and funders are looking for evidence that value for money is being achieved by the healthcare organizations they support.

So, how can your organization measure and demonstrate that it is achieving value for money? Let’s take a closer look.

 

Deciding What to Measure 

It turns out that there are a range of measures and tools that organizations can use to assess the cost savings and economic effects component of a broader value for money framework. However, the tools used will depend on the situation, the perspective of stakeholders, and the question organizations wish to ask/answer through their assessment of VfM.

With this in mind then, your starting point for measuring VfM is to answer a few important questions – this will help you determine what process, measurement methodology, and measures you should contemplate using. Here are the key starting questions suggested in the article “Evaluation Methods for Assessing Value for Money”:

 

1 How are we defining value in this situation? From who’s perspective? Who is going to decide on what value looks like/includes? (remember that the assignment of value is a very subjective thing and that the perception of value can vary from stakeholder to stakeholder, across time and location, and from situation to situation. Before you can think about measuring value for money you must be clear about what constitutes “value”)

 

2 What is the purpose of measurement? (more on this shortly)

 

3 Are we evaluating the value of one project/option/ solution/opportunity or are we comparing several to each other?

 

4 Is value being evaluated in monetary terms only or will we use a broader definition that may or may not include a proxy measure of value?

 

5 Will our evaluation process make sure that we have agreement on the costs and benefits used for our calculations? How will we do that and how will we ensure that the calculations are transparent?

 

6 Will our assessment process be used to engage and promote participation by stakeholders? Will we use measurement and results to promote and demonstrate our accountability to stakeholders?

 

With the answers to these questions in hand, you will be in a position to select the most appropriate evaluation methodology for the cost evaluation portion of your value for money assessment/ measurement.

Here are some examples:

 

Purpose   of Measurement	Suggested   Methodology
Compare   alternatives that aim to achieve the same goal/outcomes	Cost   Effectiveness Analysis
Compare   alternatives that aim to achieve different goals/outcomes	Cost   Benefit Analysis
Want   to determine whether benefits outweigh the costs	Cost   Benefit Analysis
Want to   consider individual stakeholder preferences	Cost   Utility
Want   to consider social costs	Social   ROI
Compare   the impact and performance of each program/solution relative to other   programs/solutions	Basic   Efficiency Resource Analysis and Rank Correlation

 

To see a description of each measurement methodology, and the advantages and disadvantages of each one, please read the article “Evaluation Methods for Assessing Value for Money”.

Once you have finalized your measurement methodology, you are ready to move forward.

 

Deciding When to Measure

The key question here is should you, as a matter of your usual practice, measure VfM pre- or post-decision and implementation of the program/option?

Some healthcare leaders advocate using value for money measurement as part of the decision-making process which includes building the completion of a VfM framework right into the decision-making process.  This makes a lot of sense as it can pro-actively ensure that your organization’s business decisions are driving optimum value.

Others opt to assess whether optimal value for money was achieved after the fact – this is the thinking behind value for money audits that are done by an organization itself and/or by the funder. While auditing limits your ability to correct past decisions, it does enable learnings that can be applied to future decisions with VfM implications.

I would recommend a dual approach that builds a VfM evaluation into the business case/decision-making process and then validates whether the projected value was achieved post implementation.   Doing this helps healthcare organizations make better decisions, based on validated VfM criteria, up front. And the learnings from the VfM audit process can be used to improve the VfM evaluation process (including the criteria used and the organizational skill level related to VfM assessment). The outcome of the dual approach should be improved organizational ability to make better, more efficient business decisions with the confidence that implementation will deliver the expected optimal value for the money.

 

Building Your Organization’s Capability to Measure VfM

Any healthcare organization that wishes to make value for money measurement part of its regular approach to business decision-making and management absolutely MUST implement three essential elements – without organizational capability regarding value for money assessment, efforts to measure and leverage value for money performance results will be sub-optimal.

 

1 A consistent framework and set of criteria

You need to establish a commonly understood framework to assessing value for money that is highly flexible and sensitive enough to accommodate appropriately and responsively to the varying nature of the definition of value.

 

2 Organizational skills and capacity

The people who are participating in value for money evaluation processes need specialized skills including financial analysis capabilities, an understanding of your business environment and business strategy, and strategic thinking. You must be prepared to invest in building these important skill sets and you must ensure that people have the time to focus on VfM assessment activities.     

 

3 An effective and efficient approach to process completion 

Evaluating VfM as part of your organization’s business decision-making process doesn’t have to take a long time however it’s important to do it right. Many organizations choose to make their VfM evaluation process participatory in nature with a representative group of employees and stakeholders taking part in the process. Benefits of this approach include higher quality inputs and discussions, greater transparency in decision-making, and more realistic assessments of value for money outcomes.

 

To learn more about how a framework for VfM was used at the National Health Service, click HERE.

 

While realizing your goals for your value for money measurement efforts doesn’t have to be difficult, it’s important to approach the task in the correct way, allowing you to create and nurture a solid foundation for success. Being clear on your purpose for measurement and developing a consistent but flexible framework for assessing value for money, that uses the right metrics for that purpose, is a critical element for getting the most out of your VfM assessment processes.

However, equally important is building an organization that is ready, willing, and able to participate in, and leverage, value for money assessment processes and results when making regular business decisions.  In fact, having this innate organizational capability is what sets the leading healthcare organizations apart. How do they create this capability? That’s the topic for my next blog post.

 

References

To learn more about how to measure Value for Money, check out the articles leveraged for this blog post:

“Measuring Social Value” Geoff Mulgan, Stanford Social Innovation Review, Summer 2010,   http://www.ssireview.org/articles/entry/measuring_social_value

“Evaluation Methods for Assessing Value for Money” Farida Fleming, October 2013, http://betterevaluation.org/resource/assessing-value-for-money

Waiting for the Perfect Balanced Scorecard Indicator

Having been a Balanced Scorecard practitioner, and as a Strategy Management consultant, one of the things I know for sure is that the EASIEST part of an organization’s Balanced Scorecard journey is deciding to adopt the Balanced Scorecard and its approach to strategy management.

 

The first challenges arise when it comes to actually selecting indicators to represent and reflect your strategy. However, this pales in comparison to the effort and decisions required to implement a Balanced Scorecard and get to the point where you are actually producing a Balanced Scorecard with real data that (1) provides meaningful insights into the health of your strategic objectives, and (2) enables high quality, strategy-focused organizational conversations and learnings.

 

It’s for exactly this reason that I encourage my clients to begin their initial Balanced Scorecard efforts leveraging, where possible, existing relevant metrics (most organizations I work with have lots of good existing metrics to work with/choose from). When you are able to use existing metrics on your Balanced Scorecard, indicator detailing is much easier (though not without its challenges) and data collection processes are already established. Using existing metrics as indicators on your Balanced Scorecard means that you can get your Balanced Scorecard up and running faster, and with less effort, than you would if you created your indicators from scratch.

 

It also means that you can focus your Balanced Scorecard implementation efforts on developing the new organizational capabilities required to get the most out of Balanced Scorecard utilization – things like writing really great results commentary, and building the leadership skills required to ask the right questions and explore the strategic implications of Balanced Scorecard results.

 

Another good reason for beginning with existing metrics is that, through experience, I have learned that you will see significant turnover in your initial Balanced Scorecard indicators over your first year of Balanced Scorecard use.

 

Why?

 

One reason is that indicators that looked good on paper turn out to be duds when you actually start using them. That is, they don’t tell you what you thought they would or they don’t provide you with actionable information. People often ask me if there’s a way to get around this dilemma and unfortunately there isn’t. Based on what I’ve seen time and time again, it’s virtually impossible to assess an indicator’s true utility and informational value before you begin using it.

 

Another reason for high indicator turnover is organizational maturity – both as a Balanced Scorecard user and as a functioning organization. Over a year your organization will introduce new business processes and improve others, giving you new opportunities, and options, for improved performance measurement. Changing your Balanced Scorecard indicators as your organization changes is a way of adding enhanced insights into how your strategy is working into your Balanced Scorecard.

 

For all these reasons, it just makes sense to start off your first Balanced Scorecard with existing metrics wherever possible – it reduces your indicator development costs and risks, places less of a burden on your organization during Balanced Scorecard implementation, and it accelerates your Balanced Scorecard use learning curve.

 

Sometimes, however, organizations balk at the idea of going through the process of trying out and shedding Balanced Scorecard indicators – it feels messy and wasteful.

 

Instead, they’d prefer to complete a fact-based project to define the perfect enduring indicator for the strategic objective or objectives in question. They want to undertake an exhaustive literature review, best-practice benchmarking activities, and robust indicator testing before implementing the best possible indicator(s). Often these types of activities can take up to a year’s time to complete with significant investment. The downside with this approach is that your organization is flying blind without a window into strategic objective health until that perfect indicator is ready for launch.      

 

The problems with taking this approach are obvious – some for the reasons I outlined above.

 

However, the biggest issue for me is that the search for the “perfect” indicator is a waste of time and effort because the definition of the perfect indicator for your organization will change over time.  While you will always be looking for indicators that are representative of the strategic objective they relate to, what you choose to actually measure at any given point in time will naturally reflect the current realities of your business operations and your existing processes.

 

That is, unless you are willing to implement the best practice processes that support your ability to gather the data required for your perfect indicator. Practically, most organizations I know don’t have the capacity to engage in such efforts.

 

More importantly, there may not be real business value in implementing the best practice process required to support your measurement ideal – the ROI for you and your customers or stakeholders may just not add up. I think that this is the most important message that gets lost when organizations get caught up in benchmarking activities and best practices implementation.

 

If your organization is delaying Balanced Scorecard implementation and use while you search for ideal indicators I would encourage you to stop now. If you are like most organizations I’ve seen take this approach, your search for perfect Balanced Scorecard indicators is an indicator itself – often of an organizational culture that sacrifices action for perfectionism and is extremely fearful of risking “failure” of any kind.

 

A more productive approach to the Balanced Scorecard is to see it as an opportunity to learn, improve, grow, and iterate. While you must do some real work to lay the right foundation, you’ve just got to jump in and get started where you are right now as an organization and develop your Balanced Scorecard from there.

 

It turns out that when you embrace the Balanced Scorecard and the messy journey that it is (rather than try to exert extreme control over the process), that’s when you’ll actually experience the best benefits and Balanced Scorecard outcomes possible! 

  

What’s the Real Business Value of the Balanced Scorecard?

I get asked this question on a fairly regular basis.

When business leaders pose this question, I know that what they are really asking me is – “How much of a bump in our business results will using the Balanced Scorecard give us?”

When I get asked this question, I usually respond with “it depends”. Though this may seem like a wishy-washy answer (and not really what a business leader wants to hear), it’s my honest response to the business results impact question.

You see, the business results that the Balanced Scorecard CAN enable for any organization that uses it are dependent on four critical factors directly related to the organization and its business strategy:

 

1. Whether it has a clearly defined PRIMARY customer or stakeholder value proposition (i.e. either operational excellence, product/service leadership and innovation, or customer/stakeholder intimacy – not one that’s focused equally on all three),

 

2. Whether its selected customer or stakeholder value proposition and business strategy are “right” (i.e. there’s a market/need and a “customer” for what it offers/sells, providing it with a reliable revenue stream or access to funding),

 

3. Whether its operating model is adequately designed to support the profitable/cost-effective delivery of its customer or stakeholder value proposition, and

 

4. Whether the organization is aligned with and focused on executing its business strategy and delivering its customer or stakeholder value proposition.

 

What the Balanced Scorecard CAN do is help organizations optimize each of the four critical elements outlined above. Let’s take a closer look:

 

Enabling Organizational Alignment and Focus (Element 4)

The old adage “What gets measured gets managed” seems trite but it’s still true. Assuming that your Balanced Scorecard indicators adequately reflect your strategic priorities, your Balanced Scorecard will help your employees gain a better understanding of your customer or stakeholder value proposition and the associated business strategy, AND your organization's work will become more aligned with, and focused on executing, your strategy.

 

Improving Organizational Capability (Element 4)

The Balanced Scorecard measures progress on building strategy-critical employee and organizational capabilities. When Balanced Scorecard results indicate that progress here is lagging, targeted capability improvement investments can be made with the confidence of knowing that they will ultimately translate into the desired customer or stakeholder outcomes and business performance results.   

 

Validating Your Business Operating Model (Element 3)

When it’s designed to reflect the underlying cause and effect relationships within your business operating model AND between your business operating model and your customer or stakeholder value proposition (as depicted in your Strategy Map), the Balanced Scorecard makes those relationships transparent. This is great because transparency allows you to see whether they are actually working in the way that you expect. When Balanced Scorecard results call these cause and effect relationships into question, you have an opportunity to review and adjust your business operating model, if required, to enable the consistent delivery of your customer or stakeholder value proposition.  

 

Improving Organizational Efficiency (Element 3)

Balanced Scorecard results let you know whether your organization is operating at optimal efficiency and whether your business model appropriately enables profitability. When results are off track, relevant efficiency improvement initiatives, designed to eliminate root cause problems, can be implemented.    

 

Helping You Determine Whether Your Customer or Stakeholder Value Proposition and Business Strategy are “Right” (Elements 1 and 2)

Your Balanced Scorecard results may be showing you that you are executing your business operating model, business strategy, and customer or stakeholder value proposition flawlessly but is this producing desired customer/stakeholder and financial results? Your Balanced Scorecard results will tell you this too. When customer/stakeholder and financial results are below expectations, your Balanced Scorecard could be telling you that something isn’t quite right about your customer or stakeholder value proposition or business strategy. What your Balanced Scorecard WON’T tell you is what “right” looks like. But, it CAN help guide your investigations and customer or stakeholder value proposition and business strategy revision activities.

If, however, you insist at being the best at producing cement lifejackets, there’s nothing the Balanced Scorecard can do to help you achieve better top and bottom line business results!   

 

When all four of the critical business success elements are successfully optimized through Balanced Scorecard use, the Balanced Scorecard WILL help an organization: (1) experience higher levels of performance in the business imperatives/areas required to deliver its customer or stakeholder value proposition, (2) deliver its customer or stakeholder value proposition consistently, allowing it to achieve the desired customer/stakeholder impact and outcomes, and (3) achieve targeted financial performance results.

 

What these specific business performance/results areas are is unique to each individual organization and customer or stakeholder value proposition. And the level of improvement realized/results achieved depends on how effectively the Balanced Scorecard is implemented and used by that organization.

 

So, with this in mind, I hope you`ll understand why, when you ask me “What’s the real business value of the balanced scorecard?”, my answer will be “It depends”.

 

Your “Red is Dead” Culture is Killing Your Balanced Scorecard

Organizations and business leaders adopt the Balanced Scorecard for lots of different reasons. Sometimes they want to bring a more rigorous business performance measurement approach to their organization. Other times, they are looking for a more concise set of outcome metrics to up-level external results reporting. Sometimes business leaders are looking for a way to keep on top of the things that keep them up at night and the Balanced Scorecard seems like a great tool to help them do just that. Others believe “what gets measured gets managed” so they use the Balanced Scorecard to communicate what’s important to the people in their organization.

There are almost as many reasons WHY business leaders decide to adopt the Balanced Scorecard as there are business leaders themselves.

In my years of helping organizations design and implement Balanced Scorecards, I have found that, as long as everyone in an organization is on the same page about the primary reason why the organization is using the Balanced Scorecard, the reason behind Balanced Scorecard adoption doesn’t limit the level of success achieved thorough Balanced Scorecard use.

(That being said, troubles do happen when organizations start trying to use their Balanced Scorecard to do multiple things at once – like external compliance reporting and internal strategy management. Multiple WHY’S always dilute your Balanced Scorecard, and its effectiveness)

 

However, what DOES impact the traction and success of the Balanced Scorecard in organizations is HOW the organization uses their Balanced Scorecard. That is, it’s the cultural attitude an organization has to measurement and, more specifically, business performance that’s tracking below expectations, that is a strong predictor of Balanced Scorecard utilization success or failure.   

 

In my experience, organizations with a persistent “red is dead” approach to performance results have a fundamental cultural flaw that will eventually trigger a Balanced Scorecard collapse.

So what is a “red is dead” culture? It’s one where underperforming results are met with negative reactions from business leaders including directing attacking questions squarely at the person who is unlucky enough to be bringing the problem results into the leaders’ cross-hairs. A “red is dead” culture usually pervades all levels of an organization from the top right down through the entire management structure so that even front line employees know exactly what the organization’s attitude is about underperformance.

 

How can you tell if your organization has a “red is dead” culture? Just ask yourself how comfortable you’d be bringing “bad” news or underperforming results to the attention of an executive in your organization. If the very thought makes you queasy then your organization has a “red is dead” culture.

 

Now, to be fair, not all “red is dead” cultures are created equal. In the mildest cases, bringing areas of underperformance to executives’ attention on repeated occasions ends up branding individuals as the chronic purveyors of bad news. However, in the worst cases, results review meetings become a close-quarters paintball session where the chances of getting out “alive” are slim to none when presenting red results is on the Balanced Scorecard agenda.

In organizations with a “red is dead” culture a lot of work goes into preventing underperforming or “red” results from making it onto the Balanced Scorecard. Results get manipulated. Targets get changed. Performance ranges get negotiated and altered. Considerable energy goes into trying to hide the truth. And when underperforming results do make it to the Balanced Scorecard, employee stress levels rise and everyone associated with the offending results takes a “duck and cover” approach as the Balanced Scorecard meeting nears.

Everyone grows to resent, and even hate, the Balanced Scorecard until the predictable rebellion that rises up against it ends with the Balanced Scorecard as the primary casualty.

A “red is dead” culture is extremely unhealthy yet it isn’t unusual in many of the organizations I see. The problem is that, to maximize the value of the Balanced Scorecard in an organization – to allow it to fulfill its WHY – organizations have to be willing to see, admit, and deal with real performance issues. In addition, they need to see them as organizational, not personal issues, and be mature enough to face them collectively.

 

However, organizations with a “red is dead” culture really have a bigger problem in my opinion – a problem with confronting all sorts of disappointing truths about their business.

 

Changing a “red is dead” culture isn’t easy but it’s necessary if you want to tap into the power of the Balanced Scorecard to change and improve your organization and operations, business strategy, and results.

Some organizations try to address their “red is dead” culture by moving away from their traffic light/red, yellow, green approach to performance results color-coding. However I don’t need to tell you that the problem runs deeper than this. Exchanging a red color with a sad face icon or exclamation point symbol doesn’t change the fact that results are performing below expectations. A new warning sign will still trigger the same organizational response and behaviors!

 

What IS required is a change in attitude – one where underperformance and “bad” news of any kind are seen as opportunities for learning and improvement.

 

This may sound a little simplistic but it’s as easy (and difficult!) as that.

 

The first step in making this important change is to realize that your organization has a “red is dead” approach to business performance that’s below expectations. Once leadership agrees that this is in fact the case, and that it’s getting in the way of moving the organization forward, you’ve got something to work with.

 

The next step is to (1) adopt a mindset that truly sees underperformance, bad news, and business problems as opportunities for improvement and then (2) demonstrate the behaviors that align with this new perspective. For example:

Not pouncing on underperforming results is a good start.

Asking tough organizational questions in a way that probes the issues fairly and from a place of understanding and support (rather than attacking the messenger) is key.

Encouraging respectful group discussions and collaboration about potential solutions makes problem sharing safe and an expected behavior.

And enabling learning and internal best practice modelling accelerates the pace at which your organization, strategy, and results improve.        

 

When behavior like this becomes the norm throughout your organization, you’ll know that you have successfully conquered your “red is dead” culture. From there, once you’ve got this change mastered, the next frontier you’ll naturally gravitate towards is an active search for new opportunities for improvement so that your organization can stay ahead of the change curve.

 

Is your Balanced Scorecard an object of fear in your organization? Is shaming and blaming a normal part of your company’s Balanced Scorecard results review process? If so, it’s a sure sign that you have a “red is dead” culture.

 

To salvage your Balanced Scorecard investments it’s important to take corrective action now.  It’s never too late to start working towards creating a company-wide mindset that embraces seeing underperformance and “problems” for what they truly are – opportunities to work together to build a healthier organization and accelerate its progress, results, success, and impact!

      

Follow These Steps To Select High Value Indicators for Your Balanced Scorecard

Selecting exceptional balanced scorecard indicators is part art and part science. The key to success in both is to start with a good definition of the strategic objective you are trying to measure.

A good strategic objective definition describes what the strategic objective looks like in action including what is and isn’t included. It also outlines why the strategic objective is important including the value it contributes to your organization and delivers to your stakeholders, and how it enables the achievement of desired business and customer or stakeholder outcomes, your mission, and your vision.

In addition, clear strategic objective definitions provide a critical guide for your employees as they focus on executing your strategy, and, important for this discussion, they provide a touchstone for determining your balanced scorecard indicators.

 

With this in mind, let’s first discuss the science side of balanced scorecard indicator selection.

 

As it is in most things in business, a well thought out set of criteria is the foundation for producing good results – the same applies when selecting BSC indicators. I like to use SMART criteria as the technical basis for selecting indicators but I define the elements of SMART differently than you typically would for personal goal setting. When it comes to SMART and BSC indicators:

 

S stands for specific and simple: First of all, the indicators you select for any given strategic objective should relate closely to/be representative of the strategic objective based on its definition. This helps ensure that the indicators you use are relevant and effective for strategy management. Simple indicators are easy to calculate, understand, and analyze. Because most people find it hard to respond to indicators with multiple components and complex calculations when results are performing below expectations, simple is always the best route.

 

M stands for measureable. Most organizations measure lots of things so it is rare that you need to invest in creating new indicators. Look at what you are already measuring today and consider elevating the good candidates to indicator status. Another option is to take two measures that you currently use and combine them in a different way to create a completely new indicator for your balanced scorecard.

 

A stands for available. A strong candidate indicator provides results within 3 – 5 days after the close of your measurement period. Having to wait weeks for results means that you will be managing your strategy with old information and, in these days of rapid change, stale results do you no favors.

 

R stands for reliable. When you are measuring the vital signs of your company, you want to use indicators that will pick up changes as soon as they happen. While you may choose not to respond to a change immediately, good indicators let you know that a change has in fact occurred, giving you the option to respond based on your assessment of the nature of the change.

 

T stands for timely. Good indicators give you information to look at on a regular basis – usually monthly or quarterly. The ideal measurement/reporting frequency will depend on what you are measuring, why you are measuring it, and the amount of time required to see the impact of corrective action on results. The goal is to select a measurement frequency that maximizes your ability to manage your strategy effectively.

 

Many organizations add additional criteria to their list (e.g. validity, data quality, etc.). While the list above is a solid set of criteria, there is nothing to stop your organization from adding more items to your list.

 

I generally suggest that you apply these technical criteria (the "science") first to assemble your list of 1 or 2 candidate indicators for each strategic objective on your strategy map.

 

The next step is the art part of selecting your balanced scorecard indicators. The real art comes in answering three questions that form the critical test you must apply to determine whether a candidate indicator should “make the cut” onto your balanced scorecard.

 

The first question to ask is: “What behavior will this indicator drive?” Recall that each strategic objective definition outlines what the strategic objective looks like in action. Putting a strategic objective into action requires specific organizational behaviors. By selecting indicators that drive the behaviors necessary to execute the strategic objective as it's defined AND provide insight into strategic objective health, you will ensure that your strategy is moving forward in the right direction. Sometimes you will be surprised by the behavior an indicator produces! So, when considering a candidate indicator, think through what employee, customer, and/or stakeholder behavior this measurement might drive and consider whether that behavior will move the strategic objective forward in the desired way. If the answers to these questions aren’t as positive as you would like, I would recommend looking for another indicator.

 

Next, ask “What conversations will this indicator enable?” The key to effective strategy management is organizational conversations - your balanced scorecard results, including the data and commentary provided for each indicator, should set the scene for meaningful conversations about the health and progress of your strategic objectives and, ultimately, your entire strategy. A strong indicator helps people across your organization have solid discussions about what is and isn’t working in your organization, the inter-relationships and impacts across your organization and within your value chain, and whether your business strategy is doing what you expect and need it to do. Be sure to select indicators that will elevate the quality of the strategy conversations at all levels of your organization.

 

Finally, be sure to ask “Will this indicator drive action if required?” Strategy, and its execution, is usually achieved through organizational change. Because achieving your mission is a never ending goal, you will always be striving to do something more/different/better to get where you ultimately want to go. Your balanced scorecard is a key feedback mechanism that tells you how well you are progressing and sometimes things don’t progress as planned. When this happens, indicator performance results will give you an early warning sign. Now, we all know that indicators are not diagnostic – you need to do more investigation to identify and understand the root cause problem. The key to turning indicator and strategy underperformance around is resolving root cause issues. A high value indicator will enable you to do your root cause detective work effectively and then take appropriate action to eliminate critical issues that are negatively impacting the health of the strategic objective. Indicators that do not help you take action that produces meaningful organizational change should be left off of your balanced scorecard.     

 

Crafting a robust balanced scorecard is BOTH an art and a science. The science part relies on a solid set of selection criteria which helps ensure that you identify quality candidate indicators.  Applying the art side of the indicator selection process by asking the three critical questions outlined above ensures that only high value indicators appear on your final balanced scorecard.  

 

Remember: While a quality indicator set is a good goal to have for your balanced scorecard, resist the temptation to stop there because a high value indicator set is the real key to making sure that your balanced scorecard is the powerful strategy management tool it can, and should, be for your organization.