Design Your KPIs
6 Disadvantages of a Balanced Scorecard
The balanced scorecard (BSC) has been a buzzword in performance management since Kaplan and Norton introduced it in the ’90s. But is it as flawless as it seems? Before making it part of your performance measurement and strategic plan, let’s check out some surprising downsides you need to know. 6 Biggest Disadvantages of Balanced Scorecards:…
5 Advantages of a Balanced Scorecard
Developed in the early ’90s by American management consultants David Norton and Robert Kaplan, the balanced scorecard (BSC) has quickly become a go-to tool for performance measurement and strategic planning. In fact, around half of Fortune 1000 companies in the USA and 40% of large European firms now rely on it (Source: Bernard Marr). At its…
The definition mistake that cost $328m
One team, two measurement systems On December 11th 1998 NASA launched the Mars Climate Orbiter. The probe was designed to measure water distribution on the surface of Mars. 286 days after launch the $328 million probe arrived at Mars. It missed the correct orbit by 100km. The probe dipped into the atmosphere, overheating the engine…
Process KPIs, the pain-free way
Some KPIs are obvious, but important… When it comes to choosing some KPIs, careful thought may be needed to align them with strategy (see this article on why you should use KPI Trees to do this). Other measures are in the ‘obvious but important’ camp. In process and production environments it’s fairly safe to say that we care about…
Choosing KPIs the right way
Choosing your KPIs the RIGHT way I used to be a bit of KPI purist. I would argue that you must build your KPI selection from ‘scratch’ as your KPIs must reflect your strategic objectives and you should never ‘borrow’ another organisation’s strategic objectives. Having spent a lot of time actually creating KPIs for organisations…
Accurate KPIs, Van Halen and brown sweets.
How do you know if you are looking at accurate KPIs, reports or dashboards? Perhaps we can learn a lesson from rock legends Van Halen. A copy of their 1982 tour rider makes for interesting reading. It’s 53 pages long and contains some very specific requirements, including: Two dozen English muffins Six bars of soap Six…
How Many KPIs Should I Have? A Guide on How to Choose the Right Metrics
Having too high a number of KPIs isn’t just annoying – it’s dangerous for your business. When organisations track an overload of metrics, they often face: Decision paralysis Wasted time and resources Confused and overwhelmed teams Diluted focus on what truly matters This leads to the common question: “How many KPIs should I have?” But how do you…
Why Finance should not own (all) your KPIs
A point to make is that KPIs are not just financial measures. Financial measures are crucial in many organisations, but they are also `lagging’ – which means they tell you what happened after the event. KPIs should also help you see what is coming, not just what has passed. It’s like the difference between a…
KPI Management – Using KPIs to improve your business
KPIs are the first step for improving or controlling a business. Measures are the eyes and ears of anyone who has to manage anything bigger than a one-man business. KPI management is all about using KPIs to give you a clear and honest view of whichever organisation you are looking at. I use two processes…