Mastering the Balanced Scorecard

Another problem that organizations frequently make is jumping into measurement programs too fast and making the programs too complicated. Deriving meaningful measurements, gathering reliable data, developing useful analytical techniques and educating managers about how to use the data all are difficult steps. Doing all this at one time with a bucket full of 50 different measures is doomed to failure.

Understanding the nuances
The real trick behind any measurement program is to figure out first what you want to measure, and then to figure out how to measure it. Many times, managers who want to evaluate their work groups simply jump into collecting measures — not because the measures relate to organizational attributes in which they are interested, but more because the measures are simple and available.

That’s the reason managers build assessments based on measures such as attendance data, number of currently registered volunteers, production and fulfillment records, budget deviances, and computer system up-time. When you build an assessment program around the measures you have available, instead of building metrics around the concepts you need to measure, then you have a classic case of the tail wagging the dog.

You can tell what is important to measure by referring to your organization’s strategic plan, which lists your goals and the strategies by which you hope to achieve them.

Generally speaking, goals relate to outcomes, and strategies relate to procedures. Measures can and should relate to both. Process measures can be used to reflect how well your organization is executing its strategies. Outcome measures can be used to indicate how well your strategies actually accomplish their intended results.

For example, your organization’s leadership might have decided it is important to have a larger base of active donors. In your strategic plan, you might have set a goal of expanding your organization’s donor mailing list by 25 percent over the year. As one of your strategies, you planned to do aggressive acquisition mailings using several new rental lists you think will yield good results.