What’s Missing from your Balanced Scorecard?

June 7, 2009

Mark Graham Brown has published a short, but insightful, piece about eight categories of metrics that are often poorly designed called ‘What’s Missing from Your Scorecard?’.  I won’t incude the full article here since it’s available for purchase on Harvard Business Online, but Mark suggests that the eight areas that should be better represented on a balanced scorecard are as follows:

  • Customer aggravation
  • External factors
  • Employee satisfaction
  • Brand image
  • Customer attractiveness and relationships
  • Communication effectiveness
  • Employee health and safety
  • Ethics

Mark’s issue with employee satisfaction is that most companies measure it annually which provides little opportunity to take action on the findings.  While I agree, I also worry about organizations that use surrogate measures of satisfaction like average length of service or retention percentage.  To make matters worse, as I discovered in my own career, many employee satisfaction surveys suffer from the Coke vs Pepsi problem.

I also like Mark’s suggestion on brand image.  Instead of the traditional brand surveys (which are also measured annually), use a sentiment analysis tool to listen to the voice of the customer.  This can provide an early warning radar for topics or regions might have pending issues.

From my point of view, the other thing missing from most balanced scorcards is focus.  Too many scorecards are littered with metrics with little strategic value that appear largely because they are easy to measure, rather than because they provide insight into an organization’s performance.  As I frequently remind people, “not everything that counts can be counted and not everything that can be counted, counts.”

(Note: Mark’s article provides a great example of measurement missteps at a fried chicken franchise.   By focusing on an efficiency metric at the expense of customer satisfaction, one store owner came out looking like a turkey.)