You wouldn't dream of flying a plane without a working instrument panel or of driving a car without properly functioning gauges. So why would you run an organization without performance metrics? A balanced score card let you monitor key metrics — both internal and external — of organizational success. These metrics can be set to different depths of complexity, at either the strategic or operational level.
Robert Kaplan and David Norton wrote about the balanced metrics approach in a series of articles in the Harvard Business Review. They believed that senior executives must measure organizational performance in four key areas: financial, employee value, customer value and organizational effectiveness operationally.
Strategic level metrics, typically found in a balanced score card require an approach that measures key performance areas such as operational efficiency outcomes, internal and external customer satisfaction and financial performance. Operational efficiency may include response time metrics, fire loss, and other key business performance indicators. In fact, fire service organizations report measuring outcome driven performance such as how quickly water is flowing onto the seat of the fire, how quickly the fire is extinguished and how quickly primary and secondary searches are completed for potential civilian victims. We can examine other industries such as health care in defining how important outcomes are measured and reported such as how quickly reperfusion occurs for occluded vessels either with clot busting medicines or interventional techniques. These times are then even benchmarked against other institutions in measuring “door to reperfusion” times.
Successful organizations also focus on internal and external customer satisfaction measures. Internally these typically measure employee wellness areas such as lost work time, employee injuries, sick days, and other functions of employee morale. External customer focus typically centers on satisfaction measures as to the experience they had with your services and personnel and how they would rate those. One common mistake organizations tend to make with these measures in particular, are that they unilaterally design them from their perspective and not the customers viewpoint. An example of approaching this indicator most successfully is to query prior customers as to what their expectations were of fire system response and then develop indicators to measure.
Finally, financial performance in the private sector typically measures return on investment. In public sector organizations, it may be as simple as budget performance variances by pay cycle. This allows senior executives to closely monitor organizational fiscal performance on an as you go basis.
While other quality management systems are available the balance score card approach has applicability to most all industry and service organizations. The approach assures that an organizationally holistic approach is taken to measuring the “wellness” of the key pillars for organizational success.