Common Construction Characteristics
The benefits of vertically cascaded and horizontally shared performance measures are maximized when the related measures share a common set of characteristics. Common construction of vertically cascaded measures enables easy roll-up of lower tiered measures to create higher tiered benchmarks. Horizontally shared measures having similar construction characteristics are more readily comparable, thus enhancing the evaluation and decision-making processes.
When developing a vertically cascaded and horizontally shared performance measurement system, care should be taken to ensure that associated performance measures share common characteristics. These characteristics include:
- Data Characteristics (including type, integration, accuracy, and source)
- Units of Measure (including time references)
- Scaling (including axis scaling, numeric scaling, unit spacing, axis sizing, and scaling over time)
- Update Frequency
Alignment of these dimensions both vertically and horizontally, further enables the creation of a core performance measure subset; enhancing focus on the organization’s mission and alignment of activities to its accomplishment.
Additional information regarding organizational performance measure construction can be found in the StrategyDriven whitepaper series Organizational Performance Measures.
About the Author
Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.
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