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The Measures That Matter

Posted June 30, 2011 1:29 PM by Brandon Kline

In the previous post, Mark Cutler highlighted a recent Wall Street Journal article entitled "School Reform, Chicago Style." Near the end of the post, he mentions that one issue for Chicago Public Schools may be the fact that they are measuring too many things. This got me thinking about how important it is to spend time determining the appropriate measures for your organization, and making sure they are tied directly back to the strategy. Having too many measures can be a drain on an organization's time and resources, without providing much added benefit. With budgets being cut and more supporters demanding proof of impact, measuring the wrong things can be costly in more ways than one.

Luckily, the Balanced Scorecard can serve as a great platform to help determine the measurements your organization may want to track. During the process of developing your strategy, the objectives are broken down into four classic perspectives (financial, customer, internal processes, learning & growth), or some variation of these. Once the organization has a clear strategy in place, the objectives should be used as the foundation for determining the appropriate measurements.

Developing measures is not simply about identifying anything that you could measure, it is about drilling down to determine the key metrics that can be utilized to track achievement against your objectives. Each measurement should be linked directly back to an objective in one of the four perspectives. In other words, you are first deciding what you would like to achieve, and then determining what needs to be measured on the path to get there. By doing this, the organization is showing how success in achieving the overall strategy will be measured and tracked.

Understanding that measures need to be linked back to your strategy is a key first step, but you may still be asking yourself, "What makes a good measure?" One thing that might help in developing effective measures is following the S.M.A.R.T. framework.

  • Specific - Clearly and precisely state what will be measured
  • Measurable- Every measure should be numeric and able to be graphed
  • Actionable- The results are easy to interpret and you should understand the actions that will affect the measure
  • Repeatable- You need to be able to consistently gather the information over time
  • Timely- It needs to be measurable at a reasonable frequency

Determining the appropriate measurements for your organization is just as much about deciding what to measure, as it is about deciding what not to measure. Having the appropriate measures provides context for discussing your strategic objectives, and when properly communicated, drives people to get things done. In his article "Strategic Performance Measurement and Management in Nonprofit Organizations," Robert Kaplan states, "By quantifying and measuring the strategy, organizations reduce and even eliminate ambiguity and confusion about objectives and methods. They gain coherence and focus in pursuit of their mission." Integrating measures that track performance in key activities and processes is essential to the success of the Balanced Scorecard in any organization. Without clearly defining your measures, there is no way to determine the effectiveness of an organization towards achieving its mission.

Thanks for reading and keep us posted with any questions or comments!

Filed Under Measurement