The Balanced Scorecard is well known as a strategic planning and metric management system that is used in business, industry, government and non-profit organizations worldwide. The primary purpose of this system is to align an organization’s business activities to the vision and strategy of the organization, optimize both the internal and external communications, and monitor financial, operational and organizational performance against the stated strategic goals. While originated, by Dr. Robert Kaplan and Dr. David Norton, as a performance management framework that stressed more of the non-financial performance measures as opposed to traditional financial metrics in aims of helping managers to better view and understand organizational performance, one must ask, in a much more technology-based interaction between companies and potential customers, where should the focus for performance measurement lie and how does that focus shift based on a company’s desired mode of integration with its customers and constituents?
In the traditional business economy, metrics management helps to propel an organization from simply recording agreed upon performance metrics to using said information to drive action plans for the organization by key department and manage to goals on a daily basis.
Properly applied metrics management is meant to provide feedback around the internal business practices and the external results and outcomes in aims at continuously improving business performance and operational results.
A brief review of the key categories of performance metrics lead to an understanding for not only which types of metrics are critical for measuring, but the relative importance of each metric to the organization given their strategic objectives. The most traditional metrics that companies understand, are measured by, and resonate with are financial or “money”-related metrics. The financial landscape of metrics management that keeps a constant pulse on profit and loss performance, cash management and risk profiling has always and will be critical for organizations to understand where they stack up vis-à-vis their competitors. However, as technology continues to change the dynamics of social interaction, other metric landscapes will become increasingly important.
The business operations landscape allows managers to have an understanding as to how efficiently and productively different processes are performing, and gives them the ability to identify problems in process flows and address said problems as quickly as possible.
The customer landscape has become increasingly important over time. Businesses continually increase focus on understanding customer requirements and developing initiatives aimed at driving customer satisfaction in aims at driving and improving customer affinity and loyalty. If a company is unable to meet its customer’s needs then the customers will certainly seek out other solutions. A leading indicator of failing overall business performance is an inability to satisfy customer needs and an inability to succeed along the customer landscape of metric performance.
As we move forward into the technology-based business economy, what has become apparent is that the learning and growth landscape for metrics management has become critical for companies looking to create and sustain a long-term competitive advantage. This dimension is not only critical for companies looking to build on their core asset, employee knowledge of their respective business, and more importantly, knowledge of the needs of their customers and clients. This will be the separating dimension for business leaders going forward.
But in this new technology-based viral economy, what are the right metrics and what are the dimensions that companies should be looking to compete in? What are the correct social media metrics? What are the best social media platforms to employ and how does that change based on product, service, channel of distribution, manufacturing process, etc.? Twitter? Facebook? AOL? Myspace? LinkedIn? Pinterest?
Stay tuned because at Viral Solutions, we have a perspective. And depending on your individual business situation, a perspective can change your individual approach to business success going forward.
Thomas von Ahn | Chief Elephant Slayer | Viral Solutions LLC (Content assist by Dino Browne)