Design of Measurement System of an organization is critical factor in determining the success and sustainability of the organization’s performance. More often than not, the senior leadership of the organization tends to focus on the key organizational initiatives and programs with implicit assumption that the design beneath is right and well catered to. The reality is with less attention coming from top such designs are not only weak in multiple areas but also lack the alignment with the organizational level measurements.
For example, senior management may be focussed on customer NPS scores whereas the key internal assurance metrics measuring defects may not be measuring exactly what determines customer’s propensity to recommend. Similarly, the leadership may be looking at the Business Unit level utilization numbers whereas the aggregation methodology itself may not be right. These are couple of issues with Alignment and Aggregation. There are issues even with the operational definition of the measures.
Similarly, a consolidated view of organization’s performance from different perspective may not be measuring all that it needs to measure. For example, how much the current performance score provides assurance around performance sustainability in near and mid-term. Are all perspective well balanced in line with organization’s strategy? Are all strategy elements being directly / indirectly measured?
These are few of the questions that point to the opportunity of improving the design of metric system and organization’s scorecard. While we provide consultation around it, we firmly believe the nuts & bolts can be addressed only by trained & competent resources internally. We at ShilpBodh offer an in-depth program around Measurement System Design and BSC concepts. It covers the most fundamental building block of such design and goes right up to strategic measures & enterprise level aggregation. The program broadly covers the following:
Importance of measurement system, concept of lead & lag measures, concept of Key Indicators vs Outcomes, Operational Definition of metrics, what to measure – why & how, Creating Measurement Alignment, Frequency of reporting & Analysis, Process / Function wise key metrics & ownership, Process Level Reporting & Analysis, Performance Baselining, Performance Reviews & Governance, Key methods of Aggregation – factoring consistency with optimal performance, Aggregated Performance Score Cards, Identifying key measures for each of the strategic perspectives, Pros & Cons of Org wide metric computation vs. Org wide Scoring, Trend Analysis etc.