Performance Measurement Framework by BSC Designer

Learn how to set up a performance measurement framework to ensure data consistency, effective reporting, and continuous improvement.

Steps to set up a performance measurement framework to ensure data consistency, effective reporting, and continuous improvement.

1. Define Context of Measurement

What’s the state of performance measurement in 2025?

  • On one hand, experts agree on the importance of starting with the business context.
  • On the other hand, this recommendation is often ignored, and measurement systems are designed in isolation from business challenges.

A common example is the popular Balanced Scorecard framework being used merely to group KPIs into four perspectives. As a result, the framework is reduced to a performance measurement exercise that fails to create any meaningful value for stakeholders.

S.M.A.R.T. is another common practice for goal setting and performance tracking. In this approach, goals, metrics, and targets are combined into a single smart goal. While effective on a small scale, it becomes challenging to maintain and adapt as the business environment grows more complex.

What’s the best way to define the business context? Start with high-level aspirations and cascade them down to scorecards, objectives, KPIs, and initiatives.

This approach, explained in our Strategy Implementation System, is adaptable to any organizational scale or domain. For instance, we have demonstrated how to apply it effectively to business groups.

5-Step System for Strategy Implementation: Supported by Balanced Scorecard Principles

2. Set Up KPIs

When setting up a performance monitoring framework, consider these stages:

  • Idea generation
  • Technical setup
  • Ensuring data consistency
  • Organizing KPIs into a hierarchy

Let’s discuss these stages.

Idea generation stage

This stage involves identifying KPIs to quantify the value created for stakeholders within the defined context. This can be challenging and often requires iterations. In the KPI System, we shared our approach to finding KPIs in challenging cases.

General advice: Use KPI definition to clarify goals and their quantification. Engage your team in discussions and avoid linking individual KPIs to rewards.

AI tools can facilitate this process, especially when contextual information about your strategy and metrics is available. In BSC Designer, this is automated on the AI tab.

Another practical recommendation for the KPI generation step is to agree on terminology – what you call a measure, target, indicator, or metric. Refer to the terminology used in the BSC Designer platform for guidance.

The structure of KPIs in the quality scorecard within BSC Designer

The structure of KPIs in the quality scorecard within BSC Designer. Source: View Quality Scorecard online in BSC Designer Quality Scorecard.

Technical setup

Technical setup of a KPI includes:

  • Defining its name and description to clarify how it is measured.
  • Assigning an owner (responsible for updates)
  • Assigning stakeholder (interested party) to clarify the relevance of a KPI.
  • Specifying measurement units, such as quantitative, qualitative (e.g., Likert scale), or binary (yes/no) units.
  • Selecting a performance function, e.g., determining whether a higher value (such as customer satisfaction) indicates better performance or whether a lower value (such as response time) is preferred.

Consult the tutorial to learn how to set up KPIs in BSC Designer.

Ensuring data consistency

Consistency is crucial in performance measurement. To achieve it:

  • Define actualization intervals (e.g., weekly, monthly) to ensure regular updates.
  • Establish data inheritance behaviors for periods without specific data.
  • Set data grouping rules for aggregated metrics, such as averaging customer satisfaction or summing sales values.

The Values Editor allows access to all data for a KPI and ensures data consistency.

The Values Editor allows access to all data for a KPI and ensures data consistency. Source: View Quality Scorecard online in BSC Designer Quality Scorecard.

Automation tools support data consistency by offering features such as:

  • Detailed audit trails for KPI changes.
  • Lock of historical data to prevent unauthorized edits.
  • Approval workflows for validating data.

Consult the tutorial to learn how to ensure data consistency in BSC Designer.

Organizing KPIs into a hierarchy

Finally, individual KPIs should be organized into hierarchies or scorecards:

  • Define their position of a KPI in the hierarchy.
  • Specify data connections between KPIs (e.g., one KPI contributing to another).
  • Establish contextual connections.
  • Clarify the relationship between parent goals and indicators (leading vs. lagging).
  • Assign weights to prioritize metrics within the same parent goal.

3. Plan and Track Performance

Once the measurement framework is created, we begin using it for actual planning and performance monitoring.

Planning

Define targets of KPIs for specific dates:

  • Set single-date targets (e.g., achieving 90% customer satisfaction by year-end), or
  • Establish cumulative targets (e.g., gradually increasing trained staff percentages quarterly).

Monitoring

  • Update KPIs according to their actualization interval.
  • Calculate performance for each KPI.

Data collection and calculations can be automated using performance measurement software.

4. Analyze Performance

Once updated, KPIs should be systematically analyzed to assess performance:

  • Conduct a basic analysis of KPIs by comparing their current states with previous updates.
  • Apply analytical methods to identify trends, anomalies, or significant changes.
  • Perform gap analysis to investigate discrepancies.
Analytical methods for performance metrics to support data-driven decision

Visualization tools:

  • Use dashboards to track trends and make comparisons.
  • Use strategy maps to assess the impact of performance on objectives.
  • Explore aggregated performance views for perspectives, scorecards, or overall results.

5. Improve Continuously

Goodhart’s Law states:

“When a measure becomes a target, it ceases to be a good measure.”

That’s one of the reasons that induce undesired behavior.

Best practices:

Use performance measurement to understand challenges better and revise response strategies. Avoid tying KPIs directly to rewards and compensation.

Continuous improvement involves:

  • Map observations and corrective actions via KPI comments.
  • Send automatic notifications to metric owners for reviews.
  • Engage stakeholders through performance reports.

As Alex Brueckmann, an internationally renowned strategy expert, articulated:

“Make Strategy a Conversation. Create space for your team to ask questions, share ideas, or even challenge assumptions. Buy-in happens when people feel heard, not when they’re simply told.”

Consult the tutorial to learn about discussing KPIs in BSC Designer.

Automation Toolkit and Examples

Most performance measurement frameworks start with Excel spreadsheets. With increasing complexity, using specialized tools like BSC Designer becomes essential.

Common use cases of BSC Designer platform include:

Results Achieved

Find below some quotes from the stories shared by our users about the results that the BSC Designer platform and measurement framework helped to achieve:

  • “BSC Designer’s reporting capabilities have enhanced our ability to monitor performance and make data-driven decisions.”
  • “The customizable dashboards in BSC Designer provide a clear and concise view of our performance metrics, aiding in quick decision-making.”
  • “BSC Designer has been instrumental in helping us to develop a comprehensive performance measurement framework tailored to our organization’s needs.”
  • “Measure progress towards our long-term strategy with a structured and actionable framework.”
  • Integrating KPI tracking and performance measurement seamlessly.”
  • “The KPI monitoring tools in BSC Designer make it easy to identify which metrics require attention and adjust initiatives accordingly.”
  • “BSC Designer has helped improve internal and external communications, and monitor organizational performance against strategic goals.”
  • “It truly goes beyond normal capabilities improving performance. Now it’s simpler and quicker to get things done.”
  • “BSC Designer has streamlined our performance reporting, making it easier to track progress and identify areas for improvement.”
  • “The integration of KPIs with strategic objectives in BSC Designer has provided us with a clear framework for performance measurement and management.”
  • “The software has facilitated a more structured approach to performance measurement, helping us to focus on key strategic areas.”

Video Tutorial

Performance Measurement Framework by BSC Designer

What’s Next?

  • Sign up for a free plan on the BSC Designer platform to start prototyping your performance measurement framework.
  • Join one of our training sessions to deepen your knowledge of performance measurement.
  • Arrange one-to-one consulting sessions to identify the best KPIs tailored to your business challenges.
Cite as: Alexis Savkín, "Performance Measurement Framework by BSC Designer," BSC Designer, January 17, 2025, https://bscdesigner.com/performance-measurement.htm.

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