Balanced Scorecard: Step-by-Step for Government and Nonprofit Agencies, 2nd Edition

8

Performance Measures, Targets, and Initiatives

Roadmap for Chapter 8 When Kaplan and Norton originally conceived of the idea for a Balanced Scorecard, they were attempting to solve a measurement problem: How do organizations balance the historical accuracy and integrity of financial numbers with the drivers of future success? Since that time, over 16 years ago, the Balanced Scorecard has evolved from a measurement system to a strategic management system, and a powerful communication tool. Creative Scorecard adopters are finding ever new ways to harness this revolutionary tool. However, at its core, the Scorecard retains a commitment to performance measurement. In this chapter we examine the final pieces necessary to develop a Balanced Scorecard measurement system—measures, targets, and initiatives.

We’ll begin the chapter by defining measures and considering the types of measures most used by public and nonprofit organizations. We’ll then examine each of the four Scorecard perspectives in detail, providing information and techniques you can use to develop your performance measures. To help you choose the most appropriate measures for your organization, a number of criteria are presented. The chapter also includes advice on the number of measures your Scorecard should contain, gathering feedback from critical stakeholders, and even creating data dictionaries for your new metrics.

The critical role played by targets is the next stop in our Balanced Scorecard journey. Different ...