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Balanced Scorecard principles:
Don't just manage what you can measure,
Measure what you want to manage.

Importantly, NEVER start with measures
and always communicate your objective as well.

Measure what you want to manage: You have probably heard the phrase, but what does it mean? 

It means having the 15-20 measures that really make the difference, not the 70 to 100 that you are currently measuring.

Let us take project management as an example. Put 10 or 20 project managers in a room and ask, “How can we measure successful projects?” (This actually works just as well with one project manager). Within 10 minutes you will have three flipcharts full of measures: Probably 50-60 different ones.  All are valid. All are potential measures of a project’s success. People are very creative.

The next question is, “Which is most important?” “Which should we use?”. At this point the arguments start. “I prefer this”, “we need this as well”, “This is better” etc etc... You can leave them for the whole day arguing about this. No one will win. They won’t agree. They will probably, like most organisations, end up justifying having all of them.

The problem is that they are falling into the classic trap. They know they need to measure, so they are listing all the things that they can measure. And they probably are measuring them. Like me, you probably see management reports with 100-200 measures in them. (For more details see our case studies)

So, do they communicate them all to the staff?  Which are actually important?  Not all 50, 75, 100, I am sure.  What about the “So what?" test? So. what am I looking for and what will I do about it, if it changes?”

Please, please, please, Never use a measure without explaining why!

We all know about dysfunctional measures. Ones that distort behaviour, cause information to be hidden, ambulance drivers to park outside Accident and emergency,

Why. Simply, because measures on their own do not communicate what is required. This is one of our favourite rants.

Lets take a simple example. Central government used to send out over 100 measures of “Best value” for councils. When originally sent out, not one actually said why it was being measured. You had to guess and interpret what was the intention.

What is going on? Ssomeone in Whitehall (or corporate headquarters) is deciding that a particular issue is important. Rather than explaining what they want to achieve they decide to present it as a measure. So they spent ages thinking up suitable measures to represent what they are thinking.

Now, rather than explaining the thinking and why the measure was chosen, they just communicate the measure. But, the measure is actually merely a surrogate for what they are thinking: What they want to achieve.

You receive the measure. Now you have to reverse the logic. Here is the measure. What did they mean by that? What was their underlying thinking? You have to guess the underlying logic. To work backwards to the original objective.

Ever played the children's game Chinese wispers, where the message gets passed along the line and becomes distorted as it goes. Of course by the time these steps have been taken (think of the objective, create the measure, communicate it, guess what it means or rather what they intended, communicate it to others, and then act to satisfy it) you can be a long way from the original intention.

It gets worse when the first measure does not work so another, and another is added. Its like a series of ranging shots from a gun, this one fell short, so try something a but longer next time.

This is compounded when the measure, without the explanation is used to rank or penalise people. How will I be penalised.

What is the cause of the problem? 

They have started in the wrong place. They are also pre-judging what they can measure.

Now imagine you banned discussion of measures. Now you simply ask, "What is it you are trying to achieve?" "What is important ?" Do this without prejudging whether you can measure it or not.

Often, at this point there is usually a discussion about not trying to achieve things you cannot measure.  Fine, but again that pre-judges things.  You have to decide whether you can measure something before you suggest it. 

Now, my experience is that when I work with clients, between 40-60% of the measures we come up with were not even on the list at the start. They are useful measures and tell whether the strategy is happening, but not standard measures.

I did this once with a City Council. Despite having 140 customer survey measures, only half the 8 objectives in the customer perspective that they wanted to measure were actually being collected. As  a result, they re-cast their customer survey.

In a large retailer, of the 25 measures on the top level scorecard, only 10 came from existing measures. In an insurance company, the figures were similar.

Now, they were measuring what they needed to manage and not measuring all those things that were easy to measure, just because they could.

So our message to everyone is this:

Never, ever, ever….use or communicate a measure
without explaining why you are using it:
What you are actually trying to achieve.

And if you are given measure, always ask,
“What are you trying to achieve by measuring this?”

It’s the least you deserve.

The secret is to develop your objectives in each perspective,
BEFORE you do any measure design or choice.

then, don't just manage what you can measure, measure what you want to manage,

and explain why you are measuring it.

Want to cut your measures down to size, then talk with us

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