by Will Phillips
4A study of 120 that compared one hundred twenty businesses managed by measurement against those that were not reported the measurement managed businesses were roughly twice as likely to be an industry leader, ranked financially in the top third of their industry, and judge their last major change effort as successful.
In addition to performance differences, the measurement managed companies were two to four times stronger in:
- Senior management agreement on strategy
- Teamwork and cooperation.
- Sharing information openly and candidly.
- Willingness to take risks.
- High levels of self monitoring by employees.
It is helpful to consider a balanced set of strategic success factors. Here are some thoughts on what balance means:
- Long vs. short term measures.
- Internal vs. external measures.
- Outcome/results vs. driver/activity measures
Measures in these six areas:
a. Market/customer
b. Financial
c. People: staff, contractors
d. Environment (stakeholders; community; regulators; etc.)
e. Partners
f. Operations
Each of the above six areas may have components which are long and short term, results and activity, and internal and external.
Why a balanced score card?
Too often we measure financial data only. Without a balanced score card the financial measures play an overly important role in shaping decisions. Without a balanced score card it is difficult to see how a course of action will impact key non-financial performance areas.
A balanced score card (BSC) provides a clear way to communicate goals and strategies to staff and board.
A BSC enables the strategic alignment of the organization's culture, structure, budget and rewards.
It also fosters alignment across functions and levels. A BSC provides a radar system to detect problems early and a framework to actively manage and achieve goals and strategies.
Museum Measuring
Check the box at the end of each statement to indicate your perception of the statement's accuracy in describing your institution.
SA = Strongly Agree
A = Agree
U = Uncertain
D = Disagree
SD = Strongly Disagree
- We have 10-30 scorecard measures to track strategy implementation.
- By looking at our scorecard you can infer our unique strategies.
- Senior managers have strong agreement on the measures of strategic success.
- Our governance team has strong agreement on the measures of strategic success.
- The measures we track are balanced between desired results and their drivers.
- The measures we track are balance between internal and external factors.
- Our decision making is driven by market and customer measures.
- Our decision making is driven by staff and contractor measures.
- Our decision making is driven by financial measures.
- Our decision making is driven by operations measures.
- Our decision making is driven by external environment measures.
- Our decision making is driven by partner/supplier measures.
- Our decision making is driven by market and customer measures. Our decision making is driven by market and customer measures.
- Our decision making is driven by community measures.
- Our goals and strategies are understood at all levels in the organizations.
- Specific measures have been derived from the strategic measures for all sub units.
- Sub units are committed to those derived measures.
- Each sub unit has a balanced set of performance measures.
- Individual performance measures are directly linked to sub unit and organization measures.
- Strategic measures are linked to important rewards.
- Each senior manager take responsibility for performance on all strategic measures.
- Regular reviews of performance on measures occurs at senior and sub unit levels.
- Regular reviews of measures focus on corrective action and problem solving.
- Individual development goals are linked to strategic measures.
- A simple, understandable system integrates measures across levels and functions.
- The strategic measurement system is reviewed and updated at least annually.
Total Checked in Each Column =
Barriers to Building a BSC
- Unclear, unspecific goals
- Unclear, unspecific strategies.
- Lack of focus in objectives and strategies.
- Lack of leadership commitment
- Resistance not addressed.
Steps to a Measurement Managed Museum
Define
- Organizational goals
- Strategies for achieving goals
- Organizational improvements selected
- Commitment secured.
Design
- Organizational improvements begun
- Measurement areas selected
- Performance targets or ranges set
- Review and action planning cycle set
Cascade
- Cascading structure designed
- Goals cascaded
- Measures cascaded
- Measures integrated.
Embed
- Management processes
- HR policies
- IT systems
