“If you can’t measure it, you can’t manage it.”

Categories: Winnthinks

It’s a well known and well respected quotation from the eminent management expert, Peter Drucker. I use it all the time when working with organisations looking to improve their service delivery or the effectiveness of their managers, and there won’t (I hope!) be a single business person reading this now who won’t agree with it.

After all, how will you know what ‘poor’, ‘good’ and ‘outstanding’ performance looks like if you haven’t set any criteria against which to measure those things? My idea of ‘good’ customer service or ‘poor’ people management may be very different to yours. So what we need is a baseline measurement, a benchmark, a starting point that defines those terms for us. Then we can start bridging the gap between what we are actually delivering, and what we want to deliver.

As is often the case, there are useful lessons to be learned from business in the way we run the rest of our lives. Take the Balanced Scorecard* measurement tool, for example. Its basic underlying principle is this: that all business activity must be fully aligned to, and focused on the delivery of, the vision and strategy of the organisation.

The Balanced Scorecard model focuses on four key perspectives:

  • Financial: What are the financial measures by which an organisation can be regarded as ‘successful’ and do the numbers add up?
  • Internal Business Processes: How efficiently and effectively is the work being done?
  • Learning and Growth: How does the organisation constantly improve and develop, particularly in terms of the knowledge, skills and attitude of its people?
  • Customer: How well does the organisation meet the wants and needs of its customers? How do we make them want to stick with us?

By keeping these four perspectives in balance, says the model, we shall deliver the vision.

Your Personal Balanced Scorecard

Many people go through life without any real sense of vision or direction. Life can often feel like it is happening to us, and we are likely to at least have periods when we are simply battling to keep our heads above water. But you know what? We all have the capability to work out a vision for ourselves, or at the very least a sense of the direction we want to be travelling in. Financial independence, a career that allows us to ‘give something back’, a home of our own, intellectual stimulation, professional qualifications, an improved skill, time to pursue a hobby or a dream, a fulfilling relationship, a great social life, seeing the world, retiring to Spain … take your pick.

The Balanced Scorecard perspectives for our own lives might go something like this:

  • Financial: What are the measures by which I would say my life is ‘successful’? Money may be one of them, but how time-poor, or relationship-rich am I too?
  • Internal Business Processes: How effectively am I working towards my vision? Have I even worked out where I want to be going yet? If not, how will I know when I am on the right track? (If I can’t measure, it, I can’t manage it).
  • Learning and Growth: How do I constantly learn and improve? What keeps my thinking fresh and my mind open? Do I question enough?
  • Customer: How well do I meet the needs of my ‘customers’ – the people I share myself with? My ‘customers’ are my family, my friends, my neighbourhood, my world. It’s everyone who needs me to be there for them, either as regular customers or occasional ones. Do I understand what they need, and how hard do I work at giving it to them? And what is the payment I get in return?

It’s an interesting application of the model, and it won’t be everyone’s cup of tea. Let me know what you think.

Robert S Kaplan and David P Norton: “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review (January-February 1996): 76.