Articles

Articles written by Keith Munro

Building profitability through business excellence

The role of leadership in business excellence

The role of strategic planning in business excellence

The role of customer & market focus in business excellence

The role of information & analysis in business excellence

The role of human resources in business excellence

The role of process management in business excellence

Monitoring results in business excellence

How well is your organisation performing? What are the organisation’s strengths and where are the opportunities to improve? These questions have always confronted the leaders in any organisation. Much effort has been put into addressing them in a business context in the last hundred years. Fredrick Taylor developed concepts around establishing detailed instructions for simple tasks to maximise efficiency and uniformity – used effectively by fast food outlets today. Deeming promoted the improvement of quality by using statistical tools to identify variations in process performance. Once identified the errors could be eliminated through process improvement, with continuing measurement to ensure the errors did not reoccur. From Deeming the Total Quality Management approach evolved. This in turn has developed into Business Excellence. These later frameworks recognise an organisation must balance an internal focus on improving efficiency with an external focus on its environment i.e. its effectiveness.

The Criteria for Performance Excellence asks you to describe how you are responding to your situation in terms of the approaches you are using, how well you are deploying these approaches and what results you are achieving. At present the criteria appear to be the most comprehensive and rigorous approach to organisational improvement. They are the basis for the government sponsored Malcolm Baldrige National Quality Award in the USA. Tracking the financial performance of past winners has shown them to be several times more profitable than businesses in general.

In New Zealand there are at least two national awards using the criteria. Recent winners of the New Zealand Business Excellence Awards include ANZDL (silver), Coca Cola, Gracelands Vocational Services, Horner & Partners, the New Zealand Navy (bronze) and Livestock Improvement Corporation (progress). 

While there is a wide range of organisations using the criteria, including local government, education and health organisations have tended to be absent in New Zealand.  In 1999 separate Baldrige criteria were established for these industries, with the first USA education awards being made in 2001. 

  Individual organisations can use the criteria in any number of ways, from using one criterion to address a particular issue through to a detailed application for a national award. From experience the criteria are an excellence means of providing focus on key issues. They also provide an effective structure for staff to contribute to organisational improvement.

A useful starting point is to draft an Organisational Profile.  This is described as a snapshot of your organisation.  It can show gaps in important information and provides the context for your responses to the criteria themselves.  In the profile describe your organisation in terms of organisational environment (including products, culture, employee profile, technologies), relationships, competitive environment, strategic challenges and performance improvement system. 

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This is the second in a series looking at using the business excellence approach to improve business results.  The Criteria for Performance Excellence, the criteria used for the American Baldrige National Quality Prize and the New Zealand Business Excellence Awards, is increasingly being used by New Zealand organisations as an effective framework to lift performance.  The criteria categories provide the basis of these articles: Leadership, Strategic Planning, Customer & Market Focus, Information & Analysis, Human Resource Focus, Process Management and Business Results.

The Leadership category asks how senior leaders guide the organization.  It looks at four elements:

Senior Leadership Direction

To assist in setting the organisation’s direction many businesses write a vision, mission, values, goals and objectives.  These need to be meaningful to both the leaders and other members of the organization.  Are leaders’ day to day decisions in line with the stated direction and values.   Do staff understand them and can they recall the general intent?  Is the wording specific enough to be of use?  Virtually all organizations are “customer focused, value added and results orientated.”  The challenge is to write and communicate the direction effectively to all staff.

In setting the direction senior leaders also need to create an environment for empowerment, innovation, organizational agility and learning appropriate to their situation. 

Performance Review

What measures are reviewed?  When and how?  How do your senior leaders monitor the performance and capabilities of your organization? 

How are results translated into priorities and these priorities actioned?  Such review links leadership to the other categories.  However within leadership it is important to retain a global or ‘helicopter’ view to ensure there is a good overall understanding of what needs to stay the same, what needs to improve and what needs to change altogether.

How do senior leaders improve their own performance? 

Responsibilities to the Public

The criteria acknowledge the impact products, services and operations can have on society.  While this includes meeting legal requirements you are expected to anticipate and address risks and potential risks to the public

Support of Key Communities

It is up to you to identify your key communities and support and strengthen them. This might include a local community or communities of interest. 

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The role of strategic planning in business excellence

This is the third in a series looking at using the business excellence approach to improve business results. The Criteria for Performance Excellence, the criteria used for the American Baldrige National Quality Prize, is increasingly being used by New Zealand organisations as an effective framework to lift performance. The criteria categories provide the basis of these articles: Leadership, Strategic Planning, Customer & Market Focus, Information & Analysis, Human Resource Focus, Process Management and Business Results.

Typically planning is based on an annual cycle, with internal / external review, the plan, implementation and review stages.

Some organisations would benefit from more time spent on gathering and analysing data used as the basis for decision making. A section of the criteria is an ideal checklist for areas to cover in the initial review phase. One item is technological change. All organisations have a wide range of choices in communicating with customers, processing transactions etc. While some are using new technology to create competitive advantage, including the internet, others are more cautious about the possible benefits. There is merit in regularly questioning the assumptions made for a particular business regarding its needs and its customers’ preferences. As part of this process new technology should be assessed on how it could support the organisation in achieving its goals, which may include improving communication with stakeholders, increasing sales or reducing expenses.

Your objectives link back to the organisational direction in the Leadership category. Are you seeking to be a low cost supplier, a market innovator or a high end provider? Are you wanting to be more responsive, more innovative, provide better quality or better value for money? Are you going to grow through better products, better services, more outlets, acquisitions and / or partnerships? (If you don’t have any strategic objectives – do you need them?)

An article in a business magazine claimed only 10% of plans were fully implemented. If you aren’t following your current plan it may indicate a low commitment to the plan in the first place. Did the plan address the core issues and are the planned actions going to deliver the promises? The key to implementing a strategic plan is to break the plan down into practical tasks staff can carry out, and to monitor progress regularly. At a minimum an action plan needs to identify each specific task, the person responsible and the deadline. Changes in the organisation and its environment inevitably occur after the plan has been written. The challenge is to build these changes into the plan rather than to abandon the plan as irrelevant.

Key measure projections help tie the strategic planning process back to Leadership direction and expectations. The analysis of differences between actual and projected results is an important element of a strategic review.

In reviewing the strategic planning undertaken in a fashion house the owner has chosen to put more focus on getting key dates into her business calendar. The basis for this focus is, firstly, the highly seasonal nature of the business and the need to have each new season’s offering available at the beginning of the season and, secondly, the value of mapping out a timetable and keeping to it when making changes within a business. In her words – "(The criteria is) very clear and focused and forces you to think about the future. You make more of a priority of what’s coming up rather than what’s happening at present".

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The role of customer & market focus in business excellence

This is the fourth in a series looking at using the business excellence approach to improve business results.  The Criteria for Performance Excellence, the criteria used for the American Baldrige National Quality Prize and the New Zealand Business Excellence Award, is increasingly being used by New Zealand organisations as an effective framework to lift performance.  The criteria categories provide the basis of these articles: Leadership, Strategic Planning, Customer & Market Focus, Information & Analysis, Human Resource Focus, Process Management and Business Results.

How does your organisation determine customer requirements, expectations and preferences?

The customer and market focus category questions how you ensure your products/services remain relevant and how you create new opportunities.  While the category has 11 questions I’ll attempt to summarise them into 3 representative questions:

1.      How do you decide on target market segments and how do you determine their requirements?

2.      How do build relationships with customers to increase repeat business and how does your complaint management process work?

3.      How do you collect and use information on customer satisfaction and dissatisfaction?

Throughout you are asked how you ensure your methods remain current.  For retailers, while customer purchasing patterns will always be in a state of flux we are in a period of high uncertainity as the internet grows, malls continue to evolve and the High Street, mail order, multi-level marketing et al face the challenge of remaining relevant.

Knowing your customers well reduces the risk of losing them.  It also provides the basis for identifying and attracting other customer groups.  All organisations need to base marketing plans and advertising spend on an understanding of their target markets.  If your competitors are focused on growth they are likely to be seeking information on your customers.  You are in a vulnerable situation if your competitors understand your customers better than you do.

While you won’t be able to eliminate the risk of committing to a product line which doesn’t sell, a structured approach to buying decisions, based on customer preferences and buying patterns, will minimise slow moving and obsolescent stock.  Where a product has a short life cycle overall profitability may be highly dependent on managing stock levels after the peak sales period and thereby avoiding having stock at the end.

Getting customer feedback provides a basis for taking action to remedy a specific issue.  Kapiti FourX4 Adventure Ltd provides quad bike adventures north of Wellington.  All customers are asked to complete a questionnaire at the end of their visit.  The questions cover 11 aspects of their experience and last year Kapiti had an overall excellent rating of 92%.  Not only do they know current customers are highly satisfied, they have a tool that is very sensitive to slips in performance.  Issues can be identified immediately and follow up with an individual customer is possible.  At a Wellington clothing boutique, such a system is deemed inappropriate as it intrudes on the customer’s shopping experience.  The challenge is to find ways to measure customer satisfaction that fit with the situation.  This may include staff wearing items to monitor appearance, durability, comfort etc.

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The role of information & analysis in business excellence

This is the fifth in a series looking at using the business excellence approach to improve business results.  The Criteria for Performance Excellence, the criteria used for the American Baldrige National Quality Prize and the New Zealand Business Excellence Award, is increasingly being used by New Zealand organisations as an effective framework to lift performance.  The criteria categories provide the basis of these articles: Leadership, Strategic Planning, Customer & Market Focus, Information & Analysis, Human Resource Focus, Process Management and Business Results.

How does your organisation provide systems for measuring, analysing, aligning and improving performance throughout the organisation?

1.      What data do you collect and how do you use it?

2.      How does this support daily operations and overall performance review? 

These simple questions should be the basis for information management throughout the organisation and are the foundation for fact based decision-making.  The scope extends well beyond financial systems.  Any activity critical to your operation can, and should be, measured.  If front line service is being measured through mystery shopping, the results need to be analysed and made available to those who can effect performance improvements.  This is likely to be training specialists, line managers and frontline staff themselves.  A review of recent training activity against mystery shopper findings may indicate the degree to which mystery shopping is being integrated into the relevant business system.  Periodic review needs to question how effective the mystery shopper tool has been in raising and maintaining performance.

The selection of measures / indicators is important for both tracking daily operations and overall organisational performance.  For a particular business it may be important to collect data on hourly sales, daily sales value per staff member, weekly profit margin on key items, monthly stock-turn and annual return on investment.  It is important there is a selection of the ‘critical few’ measures in each aspect of the organisation’s operation to allow broad and robust analysis of the data. 

The analysis of data to support organisational review should reflect the organisation’s strategic direction.  While the balanced scorecard concept has been with us for some time many organisations appear to be in the early phases of aligning their analysis and review with their strategic direction.  The practice of relying mainly on traditional financial measures is likely to be based on the relative availability of such measures.  A more balanced or holistic scorecard is only possible when data is collected and analysed for all key aspects of the organisation’s strategy.

What does excellence mean?  What is excellent and what is merely good?  Appropriate benchmarks are an important source of comparative data.  Initially a company may seek to better its own past achievements or achieve the industry average for its key measures.  However excellence means being the best in the industry, first locally, then nationally, and finally internationally.  Relevant benchmarks may be drawn from other industries.  For example, best practice for a particular element may lie outside your industry sector.  An airline used a Formula One pit crew as the ‘benchmark’ when they sought to address their baggage handling performance.

Data availability is key to information management.  Are decision-makers at all levels of the organisation, suppliers and customers getting the information they need?  How do you ensure data and information integrity, reliability, accuracy, timeliness, security and confidentiality?  An organisation needs to take each of these aspects and measure its current competency.

Important elements of the Customer & Market Focus category were determining levels of customer satisfaction and the effective resolution of customer complaints.  How accurate are the indicators of current customer satisfaction?  Are they a sound basis for future decision making?  Are customer complaints being dealt with effectively?  How can you be sure?

How the Criteria is changing to reflect current business needs and practices is reflected in new questions in this year’s Criteria which specifically address hardware and software suitability and capability.  “How do you ensure your hardware and software is reliable and user friendly?”  “How do you keep your software and hardware systems current with business needs and directions?”

There appears to be 3 groupings of organisation in New Zealand

1.      Those who collect very little data

2.      Those who collect large volumes of data but tend not to use the data to identify and address performance issues, measure progress against objectives etc.

3.      Those who both collect and use data to drive improvement

These groupings need not be tied to the size or resource base of the individual organisation.  Effective systems do not need to be sophisticated or computerised.  While there are common underlying issues a small organisation can address these issues with solutions appropriate to their size.  In the age of computers manual recording may still be the most effective method of handling a particular issue. 

Small business software packages are widely available.  While they require manual data entry their management and reporting capability continues to improve.  Features such as automatic reordering, previously only available in more expensive software, are now appearing in such programmes. 

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The role of human resources in business excellence

This is the sixth in a series looking at using the business excellence approach to improve business results.  The Criteria for Performance Excellence, the criteria used for the American Baldrige National Quality Prize and the New Zealand Business Excellence Award, is increasingly being used by New Zealand organisations as an effective framework to lift performance.  Tourism and export awards use a version of the criteria in identifying and acknowledging excellence in their respective areas.  Local awards such as our own Hutt Valley Business Excellence Awards are based to varying degrees on the criteria as well and are an ideal introduction to the approach.  The criteria categories provide the basis of these articles: Leadership, Strategic Planning, Customer & Market Focus, Information & Analysis, Human Resource Focus, Process Management and Business Results.

The human resources category is divided into 3 ‘items’:

1.      Work systems

2.      Employee education, training and development

3.      Employee well being and satisfaction

How do you organise work and jobs to motivate and enable employees to achieve high performance? 

The organisation of work and jobs to promote cooperation, initiative and the organisational culture is a key element in high performing work teams.  The concept of pitting employees against each other has fallen from favour.  It is recognised such strategies ran counter to building overall performance and could in some situations led to staff undermining each other in a win – loose battle.  At the least there was likely to be a resistance to sharing knowledge and resources.  The challenge is to recognise and reward excellent performance without creating divisiveness.  Related to this is the sharing of best practice skills and knowledge across work units, jobs and locations.  There also needs to be flexibility within work practices and job structures to allow the organisation to keep current with changing business needs.

Both in the past and today many employees are expected to simply work their hours, having left their brain and ambition at home.  Better organisations have always assisted employees to develop and utilise their potential.   This assistance is likely to come in a mix of formal and informal mechanisms.

A powerful tool for achieving sustained high performance is a regularly reviewed employee performance management system.  While the criteria are not specific on the nature of the system, clarity on the scope and expectations of a particular job can be established through a position description and a (usually annual) individual performance agreement.  These documents should form the basis of regular discussions.  In the case of a new employee a monthly review cycle may be appropriate.  Discussions over poor performance can become highly emotionally charged.  The issue is more likely to be resolved if discussions are based on a written set of reasonable expectations.  Gaps between actual and expected performance can be identified and a remedial plan put in place.  Progress, or lack of it, in raising the level of performance as per the plan can be measured against key dates.  

Compensation and recognition is more effective if it reinforces the business’s objectives.  Team work is increasingly being recognised through the payment of bonuses based on team performance.  A useful debate is one around providing monetary rewards to staff for high customer satisfaction scores in customer surveys.  On the one hand rewarding high customer satisfaction scores aligns with the emphasis on providing excellent customer service.  On the other hand some types of reward may undermine the value of the customer satisfaction measures as a monitoring and training / coaching tool.  One action that can, and should be taken, is sincere recognition for individuals and teams who receive high scores in such surveys.

The criteria recognise the role of succession planning in creating sustained performance.  A quick test of current succession planning is to review recent appointments, checking for the percentage which were internal.  How many of the internal appointments were groomed for their new role? 

 Hiring new staff is an opportunity to either bring in new skills and ideas or ensure current competencies are maintained.  To maximise the likelihood of making a good appointment the characteristics being sought need to be well defined in the early stages of the appointment process.   These characteristics are likely to include values and attitudes as well as skills and knowledge.  Some form of ‘balanced scoresheet’ allows comparison between candidates on the basis of the characteristics.

How does your education and training support the achievement of your overall objectives, including building employee knowledge, skills and capabilities?

The organisation’s ability to successfully implement current action plans needs to be checked from a human resources perspective.  Without identifying and addressing specific competency gaps among key staff the standard of implementation may be disappointing.  Given many plans are poorly implemented this may be a widespread shortfall in current practice.  In many cases the training required may not place a large demand on resources. 

Education and training planning should consider the short and longer term objectives of the organisation.  It should also balance the needs of the organisation with the needs of the individual in terms of development, learning and career progression.

Specific areas organisations need to address in their education and training programs are technological change, management / leadership development, new employee orientation, safety, performance measurement / improvement and diversity.

The delivery of education and training may involve both formal and informal methods.  The effectiveness of training and education should be evaluated in terms of both individual and organisational performance against the needs identified above. One approach that can be highly effective is mentoring.  However from experience, the approach depends on commitment from those being mentored.  They have to see the value in the process and relate well to the mentor.  If they have any concerns about the neutrality of the mentor they will tend to be guarded in their comments, a natural self-protection strategy but one which renders the process largely ineffective.  

Reinforcing newly learnt skills and knowledge on the job is important to ensure the training ‘sticks’.  Unless a change in behaviour is established and maintained immediately after the training the improvements sought will not occur.  Periodic refreshment of key training points through on the job coaching is likely to be beneficial. 

How does your organisation maintain an environment that contributes to employee well being, satisfaction and motivation?

“The beatings will continue until morale improves”.  An important element in delivering high levels of customer satisfaction over a long period is a healthy and happy workforce.

An organisation needs to monitor and address the health, safety and ergonomic factors relevant to each of their sites.  Employee involvement in improving these factors should be part of the overall approach. 

Employee support can be provided through services, benefits and policies, tailored to the needs of the particular workforce and employee types.

Employee wellbeing, satisfaction and motivation should be monitored.  Both formal and informal approaches may be appropriate.  A formal method such as a regular staff survey can be run alongside observing staff commitment to various customer service initiatives.  Other indicators might include retention, absenteeism, grievances, safety record and productivity measures.  Regular monitoring across a range of measures allows both specific issues and trends to be identified and addressed.

Assessment findings should be related to key business results to check relationships between staff well being and overall performance.  From this priorities can be identified for improving the work environment and employee support.

For a local business visited by the author, a current strength is the sense of ownership staff have in the business.  Individuals take responsibility for their activity, allowing the manager to get on with business development.  One opportunity to improve current practice is to put in place a simple induction checklist to provide a guide when bringing new staff on board.  Another opportunity is around utilising staff suggestions.  While staff have been asked for their input in the past they have not been kept informed of those ideas which will be implemented and those that wont.  There is the opportunity to keep staff better informed, encouraging them to make further suggestions because they can see past suggestions have been given serious consideration.

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The role of process management in business excellence

This is the seventh in a series looking at using the business excellence approach to improve business results.  The Criteria for Performance Excellence, the criteria used for the American Baldrige National Quality Prize and the New Zealand Business Excellence Award, is increasingly being used by New Zealand organisations as an effective framework to lift performance.  National award winners for 2001 reflect the wide range of organisations using the framework.  Commendation (Bronze) Awards went to Auckland Regional Council and Royal NZ Navy while Progress Awards went to Auckland City Council, Degussa Peroxide, Svedala Barmac and Synergy International.  While some of these organisations are large, Degussa has 30 staff –indicating the relevance of the approach to smaller organisations.  The New Zealand awards are not first past the post.  Any number of applicants could win the gold award in any year.  As only two gold awards have been made to date New Zealand has some way to go on its journey to excellence.

The criteria categories provide the basis of these articles: Leadership, Strategic Planning, Customer & Market Focus, Information & Analysis, Human Resource Focus, Process Management and Business Results.

How do things get done in your organization?

Process is simply staff undertaking their normal tasks and, possibly, working on special projects from time to time.  How well they do this is obviously central to the organisation’s overall success.  Key elements include effectiveness (doing the right stuff) and efficiency (doing the right stuff quickly and cost effectively).  To ensure the right activity is done repeatedly and is improved over time key processes need to be managed.  In an informal situation a set of instructions may or may not be maintained over time.  Some systematic approach, that ensures consistency and regular review, is desirable. 

While ISO registered companies are required to have written procedures with flow charts, document control etc the criteria do not specify this approach.  Your approach need not be written down, however this may make it difficult for staff to have clarity on what is expected.  Simple lists of instructions may be appropriate.  The bottom line is: do staff know what to do and are they doing it?    While the criteria don’t specify how you document processes my recommendation is to involve staff as much as possible.  Experienced staff can provide valuable input.  It is important to avoid producing a technically perfect masterpiece that lies unread.  Also, best to avoid restricting responsiveness with unnecessarily complicated procedures. While your organization may not be ISO registered some of the ISO disciplines are useful.  Consider flow charting key processes.  They can be put next to machines, in offices etc giving everyone access to the expected method of doing the key activity (which should also be best practice).  Flow charting is easily taught and ensures a common understanding.

Process management is divided into 3 ‘items’:

1.      Product and service processes

2.      Business processes

3.      Support processes

1. Product and service processes

1.a. How do you design new products / services?

In a world of continual change how do you ensure you offer customers what they want now and in the future?  How do consider new technology?  How do you improve your design process and ensure new products / services are defect free?

1.b. How do produce products / deliver services? 

What are your key ‘production’ processes and their performance measures (both output and in-process)?  How do you ensure day-to-day operations meet these measures?  What processes do you have to prevent errors?  How do you improve processes? 

2.  Business processes

Business processes might include research and development, technology acquisition, supply chain management, outsourcing, business expansion, project management and sales & marketing. 

3.  Support processes

Support processes might include finance and accounting, asset management, legal, human resources and administration.

With business and support processes you need to address similar issues to product / service processes.  How do you ensure your processes are meeting your needs?  How are you measuring performance and addressing performance issues?  How do you ensure your key processes are improving over time?

Monitoring results in business excellence

This is the eighth in a series looking at using the business excellence approach to improve business results.  The Criteria for Performance Excellence, the criteria used for the New Zealand Business Excellence Award, is increasingly being used by New Zealand organisations as an effective framework to lift performance.  The New Zealand Business Excellence categories provide the basis of these articles: Leadership, Strategic Planning, Customer & Market Focus, Information & Analysis, Human Resource Focus, Process Management and Business Results.

In the New Zealand awards results account for 450 of the 1000 points available.  This reflects the view that an organization can only be considered excellent when it has achieved superior results for a sustained period.

The criteria look for six types of results: Product and Service, Customer Focused, Financial and Market, Human Resources, Organisational Effectiveness and Leadership and Social Responsibility.  The criteria provide a framework for virtually any organization to build their own set of results to monitor.  The following are paraphrased extracts from the criteria to give an indication of their scope: 

Product and Service Outcomes

What are your current levels and trends of product and service performance?

How do these results compare with your competitors performance?  

Customer Focused Results

What are your current levels and trends in customer satisfaction and dissatisfaction measures?

What are your current levels and trends in customer-perceived value?

Financial and Market Results

What are your current levels and trends in financial performance, including measures of financial return and/or economic value?

What are your current levels and trends in marketplace performance, including market share? 

Human Resource Results

What are your current levels and trends in work system performance and effectiveness?   

What are current levels and trends in employee learning and development?

What are your current levels and trends in employee well-being, satisfaction and dissatisfaction?

Organisational Effectiveness Results

What are your current levels and trends in measures of the operational performance of key value creation and support processes? (These might include cycle time, productivity, supplier performance)

Leadership and Social Responsibility Results

What are your results for measures of accomplishing your organizational strategy?

What are your results for ethical behaviour?

What are your results for fiscal accountability?

What are your results for regulatory and legal compliance?

What are your results for citizenship in support of your key communities?

 Creating your own  scorecard

While a large organization has the resources to create a sophisticated monitoring system a smaller organizations can create their own ‘scorecard’.  The questions remain the same:

What should we be monitoring?

How can we do this simply and at least cost?

How often should we review the results and who should see them? 

Not-for-profit organizations also benefit from a scorecard approach as almost all organizations have an audience interested in how they are performing their key functions.  For a not-for-profit organization the financial results focus on the effective use of available funds rather than maximizing profit.  

Note, while I consider the criteria the ideal framework for creating a ‘scorecard’ the term, balanced scorecard, is not used in the criteria itself.  While Baldrige has been available as a scorecard since 1987, the term Balanced Scorecard was first used by Kaplan and Norton in their 1996 book, which proposed businesses were focusing too much on financial results.  They suggested measuring business strategy through four perspectives: Financial, Customer, Internal Business Process and Learning and Growth. They also covered strategic alignment, resource allocation, feedback and strategic learning – all elements with strong parallels within the criteria.

One of the issues in focusing on financials is they tend to be lag indicators.  They record what has happened.  By the time you have April’s turnover the month has passed.  It is desirable to have a mix of lead and lag indicators.  Financials that may be useful lead indicators, ie predict future results, in certain organizations include sales growth in new products / services, advertising spend, training spend, overdue debtors and creditors.  Non-financial lead indicators may include: new accounts opened in target customer segments, advertising effectiveness, customer complaints, error rates in manufacturing / distribution, staff performance agreements completed on time, staff satisfaction, training effectiveness and so on. 

Another useful term not in the criteria is the ‘Dashboard’.  A car dashboard displays the critical information you need when driving: speed, engine temperature, oil pressure and so on.  A company dashboard promotes regular focus on the critical few results drawn from the balance scorecard. These results should be carefully chosen and restricted in number.  In some cases they will the aggregate of a number of scorecard measures. While the majority of the measures should remain for a long period the makeup of the dashboard should change to reflect new priorities.  As well as review at management meetings monthly staff meetings are ideal for presenting the dashboard.  Excellent results can be acknowledged and celebrated.  Poor results can be discussed, alternative remedies considered and an action plan agreed. 

What results are you measuring?  Do they cover all key aspects of your organization?  Are you using them to improve your organizations performance?