Choosing business measures to monitor
Identifying useful output measures which help you see the impact of improvements is often a challenge, as the factors influencing simple headline measures like profit or staff turnover are often complex and may be poorly understood.
One approach is to adopt a range of output measures – sometimes referred to as a ‘balanced scorecard’ or ‘dashboard’ – and monitor these over time. The aim is to identify how the improvements impact on performance in different ways. This also makes it easier to identify potential problems or weaknesses in intermediate measures (e.g. customer satisfaction, organisational reputation) before they begin to impact on the bottom line (e.g. profit, turnover, share price). Different models of this type exist, and often include some of the following types of output measure:
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Financial
- Turnover growth
- Profit
- Share price
- Cost reduction
- Market share or performance relative to competitor organisations
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Customer/Stakeholder
- Retention of customers/loyalty
- New customer acquisition
- Customer recommendation
- Grading in external assessments
- Achievement of awards
- Feedback/satisfaction/perceptions
- Brand awareness/reputation
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Employee
- Satisfaction and commitment
- Staff turnover
- Rates of sickness absence
- Results of performance management/appraisals
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Operational
- Meeting operational targets
- Quality of product/service delivered
- Participation in/usage of business processes
- Innovation/new products developed or patents awarded
- Application of new techniques/skills
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