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Sunday , August 31 , 2014
You are here:  Metrics Features

Designing Metrics

© Paul Arveson 1998

The development of a proper portfolio of organizational performance metrics has proven to be the most difficult aspect of the Balanced Scorecard approach. It requires deep and perhaps unprecedented re-examination of the vision, strategy, and mission of an organization. The relationship between customers and the organization's own survival needs will have to be considered.

One way to address the issue is this: if we could create any metrics we wish, what 'instruments' would senior executives like to see the most, to help them to make better strategic decisions? Ideally, these instruments would have the following 12 features:

  1. Leading indicators: forecast future trends inside and outside the agency
  2. Objective and unbiased
  3. Normalized - so they can be benchmarked against other agencies
  4. Statistically reliable - small margin of error
  5. Unobtrusive - not disruptive of work or trust
  6. Inexpensive to collect - small sample sizes adequate
  7. Balanced - qualitative/quantitative, multiple perspectives
  8. Appropriate - measurements of the right things
  9. Quantifiable - for ease of aggregation, calculation and comparison
  10. Efficient - can draw many conclusions out of data set
  11. Comprehensive - show all the significant features of agency's status
  12. Discriminating - small changes are meaningful.

This is a tall order. However, it seems undebatable that these are desirable features of the portfolio of metrics. By listing these desired features in advance, it may help us to identify how to design the metrics to meet at least some of these requirements.