Performance management depends on measurement, and many of the measures are financial. But financial measures have little impact on business performance; they measure the past and tell us little about the future. However, they are comfortable and tangible. We know how to count dollars. Even the common non-financial measures are tangible, retrospective, and relatively easy. Many of the things that we need to assess seem to be especially difficult to measure, so we measure what is easy instead of what is needed.
The right things to measure are those that drive goal attainment. This means changing the measurement focus from outcomes to influences—from past to future. Outcome-based measurement uses lagging indicators, which monitor past performance but contribute little to managing future performance. Influence measurement uses leading indicators—predictors of future performance and levers to shape the future.
Business analysts and business managers; analytics designers and developers; BI program and project managers; problem solvers
Preparing to Measure
V. Analysis & Action