InetSoft Webinar: How To Avoid Making Common Mistakes When Measuring Performance

This is the transcript of a Webinar hosted by InetSoft on the topic of "Business Intelligence Agility" The speaker is Mark Flaherty, CMO at InetSoft.

What we’re going to cover is first of all how to avoid making common mistakes when measuring performance. I’ve seen a lot of organizations develop their scorecards or dashboards, or whatever they call them, and there are some very common mistakes. We’re going to go over those and probably all of you will find you’re doing at least one or two of them, so I apologize in advance for that.

I’m going to talk about how to develop indicators or analytic measures that give you a way to still have a reasonable number of gauges or metrics that you look at and have a lot of intelligence behind them by being able to drill down and give you some ideas on how to measure difficult aspects of performance, like customer satisfaction and employee satisfaction.

Finally, I’ll show you how to drill this all the way down to the employee level where the work gets done so you can actually improve performance rather than just looking at reports.

#1 Ranking: Read how InetSoft was rated #1 for user adoption in G2's user survey-based index Read More

Supplement the Statistics

The first thing to understand is that I don’t care how good your scorecard is or the kind of data that you’re collecting. Whether it’s financial or some other type of data, you need to supplement the statistics with other types of data: observational data, asking questions of people, having periodic studies done like audits and evaluations and finally, tracking the stuff that you look at daily, weekly, monthly that makes up your scorecard.

Often what I find in organizations is their scorecard measures might show that they are at a green level of performance. In other words they are hitting their target or standard but their anecdotal data or their gut feel data tells them they’re having a problem. Maybe you have a gut feel you’re having a problem with your customers. Little subtle things like they don’t return emails as quickly as they used to. The point of all this is that you need other types of data besides statistics and charts and graphs.

The bigger the organization, the less time they tend spend collecting observational data and asking questions and the more time they spend in meetings looking at charts and graphs. I’m sure that a lot of you have seen the show Undercover Boss where the CEO puts on a beard and glasses and goes and pretends to be a worker, they are collecting observational data. Most CEOs come away in tears and get a whole lot of different information about their organization that they’d never get by sitting in a boardroom looking at charts and graphs.

The point of this is that your scorecard is only one type of a performance management tool that you need to run your organization. You also need to ask questions and see what’s going on and periodically. Involve outsiders to do some kind of audits and studies.

dashboard demo
View a 2-minute demonstration of InetSoft's easy, agile, and robust BI software.

Link All Your Metrics

Here are some of the biggest mistakes I’ve seen organizations make. Probably one of the most common ones is coming up with some vague vision statement and then trying to link all your metrics and your scorecard to the vision. In fact, some of the books on balanced scorecards even suggest that that’s how you should do it.

The vision statement should be clear and focused, ideally written by one person; the CEO or the director or the general. I’ve never seen a good one that’s written by a team. A typical scenario is you go off and have a strategic planning retreat and everybody brainstorms a bunch of these stupid Dilbert words and then you cobble them together in some awkward sentence that no one understands, but everyone is happy because they got their pet word in there. So you end up with something that says, “Our vision is to be a world-class leading edge customer focused producer of value added products and services using empowered employees in a lean Six Sigma fashion,” and everybody is happy but nobody knows what it means. Once you have clarity in your vision it makes a big difference.