Comment: Understanding the value of non-financial measures
Although in most organisations we evaluate overall performance using some kind of financial measurement, most of the time the things we do in order to achieve this outcome are best monitored using non-financial measures. Non-financial measures reveal what activities are happening within an organisation, and help us to understand the impact these activities are having - are they delivering the outcomes that are required? People within the organisation use non-financial information to help manage the delivery of the required results. People outside the organisation use non-financial information to form an opinion about how well-run the organisation is, and to predict future (financial) performance. Given how important non-financial measures are, it is perhaps surprising to find that many organisations and managers struggle to select, measure and report non-financial measures in a time-efficient and useful way. Often we measure what is easy rather than what is useful.
Performance management frameworks such as the 3rd Generation Balanced Scorecard have evolved to make it easier to select, specify, collect, and use non-financial measures. They don't tell you what to measure, but provide a simple, proven, and time-efficent mechanism to help managers identify the measures a that are most appropriate and relevant to them. Firms like 2GC help organisations implement devices like the Balanced Scorecard quickly and reliably.
Gavin Lawrie
Managing Director, 2GC
Highlights for December 2008
“How do I create a strategic Balanced Scorecard?”
Ever wondered? Download our newly updated FAQ Answer and learn about the eight-step plan 2GC has developed and uses to design and implement best practice 3rd Generation Balanced Scorecards. Download the answer in PDF format from the Frequently Asked Questions section of our award winning Performance Management Resource Area.
If you find the FAQ interesting, learn more by coming on a 2GC Training course. Our highly interactive two-day training courses have received exceptional reviews from those attending, and represent excellent value for money. Click on the link below to find out more about dates and to download a brochure / registration form.
Come on a 2GC Balanced Scorecard Training Course!
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