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Wednesday, December 02, 2009

Executive Decisions: Goals and Metrics

In InformationWeek, good article and case study:

" ... The terms "scorecard" and "dashboard" are often used interchangeably, but there's an important distinction. Scorecards are all about tracking against defined metrics, and most scorecards are attached to a methodology, such as the Balanced Scorecard or TQM, says Mychelle Mollot, VP of worldwide marketing, analytics, and performance management at IBM. "Top executives have actually laid out a map for where they want to drive the business, and they've created metrics that will drive the behavior that will get them there," Mollot says.

Dashboards display key performance metrics and perhaps green, yellow, and red zones, but they don't tend to show predefined targets or goals established by management and aligned to strategy.

Whether they call their decision-support tools scorecards or dashboards, only a small percentage of leading companies have actually mapped out enterprise-wide goals with a formal methodology. (The Balanced Scorecard Hall of Fame currently lists only about 120 members, including Best Buy, Hilton, UPS, and Wells Fargo.) Some companies come up with their own methodologies, but the key question is whether it's a comparative decision-support interface --does it track performance trends relative to predefined goals? A much larger chunk of companies use dashboard-style interfaces that simply monitor the health of the business. "These types of decision-support tools aren't often attached to a grand methodology or linked down to the bottom of the organization," Mollot says ...

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