Why are you creating your measurement management system? (And do you really need a balanced scorecard?)

A few years ago, I read an article by Ian Graham called, What’s Wrong with Targets? Graham made the case that setting targets or goals for employees creates the wrong kind of behavior. This is because it focuses the employee on the target rather than on the underlying processes that create value for customers and stakeholders. And once a goal is achieved, there is often no reason to reach further. He also asserts that targets can be gamed. The alternative he suggests is to focus on specific processes and measure everything you can with an eye to continuous learning. His perspective comes out of the quality movement and the concept of continuous improvement.

We thought of Graham recently when we read an article about the games that colleges play to ensure that they meet the thresholds for statistics used by US News and others to “rank” colleges. Areas that can be manipulated include soliciting alumni donations of as little as $1 to increase their alumni giving percentage, giving more weight to applicant GPA and SAT scores than in the past, and manipulating class size.  Anyone who has ever worked in a for-profit or not-for-profit organization knows that goals can drive behavior in good and bad ways. Read more

Intangibles Measurement IV: Indicators and Performance Management

Here’s the next post in my intangibles measurement series. The last two posts have provided details on investment and assessment. This time, I am going to talk about the third kind of data: indicators.

Indicators and performance management are the most widely used forms of intangibles management today. This approach arose in direct response to the limitations of financial data in understanding the knowledge era business. Common approaches build a dashboard to show key performance indicators (KPI’s) of the company’s operations. Sometimes the dashboard is associated with a balance scorecard as well.

The idea is to identify data points that are leading indicators of strategic success and track them closely. Read more

Simple but Powerful Ways to Generate Ideas and Track Satisfaction

Michael Fraser is someone who gets the power of using technology to put knowledge to work within the organization. He has held a number of positions since I first met him. Currently he is the Recovery Act Program Manager for the Loan Guarantee Program Office at the Department of Energy.  He recently wrote to me:

One experience I wanted to share was about employee ideas for improvement. On a former project known as CHRIS, one of the major subsystems was Employee Self Service which was a home grown web site built in Cold Fusion. All employees and contractors had access although the contractors’ was limited to a smaller subset of functions. Read more