I’ve seen balanced scorecards with as few as nine measures and monster scorecard hierarchies that eventually drill into thousands of measures. Whether yours is large or small, you'll run into questions about where to find the data you want to track on scorecards. Across industries and even in government, a "rule of thirds" seems to hold: you are already reporting 1/3 of the data you need, another 1/3 is “around here somewhere,” and you can’t get at the last third — yet.
- The first third. Most of this data already exists in reports or dashboards currently being produced. Often, you will only need a level or two of summary from a given report. Unfortunately, there can be A LOT of reports where you need only a few data elements.
- The second third. These are measures that can exist in lots of forms: scribbled on a post-it in someone’s cube, on the excel spreadsheet that Jane in marketing keeps, on reports from external vendors or partners, or inside that rickety old legacy system everyone is afraid to touch. Tracking down all of this data can be a lot of work but it is also a relatively quick win when you start managing performance with it.
- The last third. This is the "Boy, it would be great to measure this" stuff. I tell executives (note: only the executives) to leave these on a scorecard (as place keepers) if they really think the organization can get around to measuring them in the coming year*. Then, it's up to the executive to push and prioritize people to come up with a plan to actually measure these. Lots of these don’t end up getting measured, but some do and they can actually have a huge impact.
This "data audit" process can take up a chunk of time in a Balanced Scorecard/Strategy Execution implementation, so plan accordingly in your project plan.
Wherever you end up getting your measure data, make sure you come up with good, clean definitions. The definition should explain exactly what the data element is, where it comes from, and give an example calculation if applicable. If there are ten definitions of revenue in a company and your scorecard doesn’t explicitly call out which one you're measuring, you are going to create more questions than you answer.
* So actually, the rule of thirds can be self limiting: if you eliminate a lot of the measures you won’t be able to get to, you will end up with less than a third in the category.
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