When I first started my career in performance measurement, the Balanced Scorecard was the new thing. I was really excited at first, as it was being heralded as the best methodology for measuring organisational performance that had ever been developed. I was the Measurement Consultant in Queensland Rail at that time, and my hope was that I’d found the guidance I’d been looking for to lead my colleagues to more meaningfully measure organisational performance. But when I learned more about it, I felt let down.

There was nothing at all in the Balanced Scorecard that guided me on how to design performance measures for strategic objectives.

Sure, the methodology explained why we need a scorecard of measures that is balanced, and explained how to get that balance. But there was nothing about how exactly to decide what the measures themselves would be, and how to implement them, and how to report and interpret and use them to drive performance improvement.

The practical, on-the-ground struggles I had in making performance measurement happen were not addressed at all in Balanced Scorecard.

That’s because it’s actually a strategy design methodology, and not a performance measurement methodology. And so I’ve found with many other so-called measurement methodologies and frameworks: Program Logic Model, Results Based Accountability Framework, and the Drivers Model are examples.

These methodologies and frameworks guide us to decide what aspects of performance are important. They give no practical guidance on exactly how to choose and create and use the measures that are needed to monitor those aspects of performance. They are results frameworks.

We need to integrate a measurement methodology into whatever results framework we’re using. And we do this by linking it in at the point of defining what our performance results are. These performance results might be called objectives, goals, outcomes, or even inputs and outputs.

In the balanced scorecard, for example, this is the point at which strategic objectives are developed for the strategy map, before strategy map is cascaded and before initiatives are developed. And in any other results framework, it’s the point where goals are written to describe the end states the strategy aims to make reality. We need to identify this step in whatever results framework we’re using, and insert into that point a true methodology for designing our measures.

We’re using measurement, at that point, to make the results specific and observable or detectable. We’re making them measurable. The act of designing a measure for a result forces that result to be expressed clearly, so it can be understood and recognised when we bring it into reality, as we make it happen.

We might have strategic objectives on our strategy map, or outcomes in our logic model, or goals for our critical success factors, like these:

• Enhance customer loyalty
• Foster a resilient and adaptable workforce
• Optimise environmental sustainability

Good luck trying to find meaningful measures for results like these, by following only the steps in your results framework. Almost all results frameworks fail to produce measurable results statements, and consequently fail to guide us to meaningful performance measures. We need a true measurement methodology to support our results framework.

What’s a true measurement methodology? It’s a set of instructions for exactly how to design the best evidence that would convince us our result was happening, to convert that evidence into quantitative measures, to define the exact details of how to calculate the measures and bring them to life, to report them in the right context and the right graphical presentation to monitor their change over time and how far they are from target, and to find the leverage that will close the gap between actual performance and target.

DISCUSSION:

What’s the results framework you use? How well does it guide you to meaningful quantitative measures of performance?

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