Saturday, 1 August 2015

Balance the right mesasures

When coming up with the Balanced Scorecard concept, Kaplan & Norton reminded us of the need for balanced measurement - focusing on a number of important factors.

Yet, most measures used are simple measures of physical output over resources consumed.

In many modern companies, however, physical output is low - the 'productivity' results in ideas. This cis the knowledge-based economy.

We have not yet figured out how best to measure such output.

Yet financiers and investors, when they judge a start-up, do value ideas.  Many 'tech' companies have high valuations - but few physical assets or outputs.

Productivity measurement - measures of 'output' in particular -need to keep pace with this new economy.

In the meantime, in your own company, value the bright young minds you have and the ideas they generate. that is what will create your future wealth.

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