Three Types of Metrics

A good ScoreCard has a balance of strategic, operational and problem-oriented metrics:

Strategic metrics track critical “must do’s” over the next 12-18 months. These “must do’s” arise out of your longer range strategic themes. Do you want to be #1 in product reliability? Or lead a market segment? If so, strategic metrics track these goals.

Operational metrics track key drivers of profitability, including revenues, margins, headcount growth, on-time delivery, product quality, and other “business basics”.

Problem-Oriented metrics address critical challenges facing your company. Do you have a problem collecting receivables? controlling costs in particular areas? You may want a metric that keeps this problem, and efforts at fixing it, visible.

Operational metrics remain on your ScoreCard year after year. Strategic metrics change over the long term. Problem-Oriented metrics fall off the ScoreCard as problems are fixed, making room for emerging problems (see updating your ScoreCard).