You have all probably heard of the first two analogies for scorecards and measurement systems, but i created the third after talking to an executive of a large multi-national company.
- A Balanced Scorecard is like having the instruments to fly a plane. Kaplan & Norton used to compare the 4 quadrants in a balanced Scorecard to the “T” on the flight deck. By keeping an eye on a few key indicators you can pilot your organisation to your destination.
- However, improving performance isn’t done by measurement. You don’t increase the speed of your car by forcing your finger through the glass of the speedometer and pushing up the indicator. You improve performance by focusing on the activities that deliver the performance and then capture the improvement using the measures or KPIs. On a personal note I remember my young brother many years ago suggesting we could stop my father from speeding by putting a peg in the speedometer at 70 miles an hour!
More recently companies seem to have lost the plot with measurement, so from my discussion this was like
- An aeroplane cockpit being continually filled with new indicators until we reach the point that the aeroplane can’t take off because of the weight of the instrumentation!
I like this one as it reminds us that measurement isn’t for free, it puts a load on a company. The added cost has to be worth the benefit derived and in some big organisations I believe we have passed the point where the additional measurement is beneficial.