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3 easy steps to choose your Balanced Scorecard measures

by Beca Han on July 25, 2016

Selecting your strategic measures is one of the most important steps in implementing your Balanced Scorecard System (BSC); it holds the key to taking your scorecard from theoretical speculation to physical actualization. Yet too many organizations fail to carefully select their strategic measures in their BSC development process for their business strategy.


In fact, a flawed development process is one of the leading causes of BSC implementation failure. Oftentimes, organizations focus solely on financial measures, but having only a financial perspective cannot provide a full picture of what is driving an organization’s performance.  There are three basic steps you can follow to successfully select your measures:

Learn more about developing your measures by downloading our Measures Best Practices White Paper.


1. Identify Critical Success Factors

In order to determine where your organization should focus its measures development, you need to identify Critical Success Factors (CSFs). CSFs describe what must be accomplished to successfully achieve a strategic objective. When identifying CSFs, try to consider behaviors that they motivate and use them to drive high performance behaviors.

2. Develop the potential measures for critical success

Now, define a set of potential measures using your CSFs. Develop one or more measures that will track your performance. When selecting measures, it is important to select only those that provide clear assessments on how your organization is accomplishing its CFSs, thereby achieving your strategic objective. But what if my organization doesn’t currently collect data for a particular measure? That’s okay! As mentioned in our previous blog, a lot of your strategy measurement and review is based on your organization's unique structure. Simply determine what information you need first. Then you can on decide how you will collect your data afterward. 

3. Develop the Balanced Scorecard Measures

Now that you have all of your potential measures listed out, choose one or more measures for each objective. You’ll want to focus on the measure that best tracks progress toward each objective. Your goal is to identify measures that primarily influence a successful outcome. While developing your measures, it is important to keep in mind that measures do not replace analysis as a way to determine the causes of performance. Rather, they simply identify where to focus the attention to for such an analysis, as well as where to best seek corrective action for an objective.


If BSC teams can minimize the number of measures to focus on just the critical few, the organization’s BSC System will be much more successful and they will be able to make informed, strategy-focused decisions.

 Download Measures Best Practices White Paper

Topics: Balanced Scorecards Measures

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