KPI Portal

BSC dimensions during the credit crunch

One of today’s most discussed topics is the credit crunch. Politicians, managers, consumers, everybody is looking at the currents all over the world with Argus’ eyes. Managers wonder if they steer at the right management information. Have they assembled the right set op KPIs? That’s why KPI Portal published a series of articles on surviving the credit crunch. Which business areas are worth considering at the moment, and which KPIs are appropriate to measure these areas?

Now the credit crunch is a hot topic for a couple of months, it’s interesting to see if the information need of the visitors of KPI Portal changes. Has the behaviour of our visitors changed in the past months? The trend graph below shows the segmentation of the visitors’ interest in the different Balanced Scorecard (BSC) dimensions in the past three months: November 2008, December 2008 and January 2009. This article briefly discusses the trends.

Trends

Visitors are more and more interested in the customer dimension. This implies an increasing focus at the customer. Maybe the collapsing demands make managers consider how to tempt customers, how to increase the revenues per customer and how to minimize the risks of debtors (broadening the customerbase, looking at creditworthiness, etc.). And perhaps this crisis will finally change the focus of mangers form purely inside the organization (financial measures, managing the internal processes) to the external environment (customers, competitors, legislation, etc.).
The degree of interest in the financial dimension is stable. This is conspicuous after all recommendations from experts to focus on costs and revenues. Maybe these KPIs were already admitted in the sets of KPIs and visitors don’t need to gain inspiration about financial measures, or maybe these figures will grow in the coming months.
After a notable decrease, the Internal Process dimension is slowly recovering. Maybe this will persist in the upcoming months. Measuring the internal processes possibly increases the effectiveness and efficiency. It can also contribute to the customer satisfaction and loyalty.
Interest in the Learning & Growth dimension is decreasing. Learning & Growth of employees is often considered as an investment with a relatively long pay-back time. Organizations seem to focus on the short term now, which might be an explanation for this downward movement.

Organizations seem to keep all hands on deck and focus on the critical factors of viability on the short run: costs, revenues and streamlining the internal processes. These figures and, as a result, these conclusions are not significant. First of all the dimensions aren’t showing great up- or downward movements. Furthermore, the credit crunch is only a couple of months on its way now. Changes in managerial thinking can better be expected in the longer run. The last possible conclusion is that organizations will follow their strategy, which has already been translated into a set of KPIs. Despite the severe economical situation, organizations steer at the same set of KPIs as before.

Nonetheless it is interesting to follow the changes, define some trends and learn from the prudent conclusions. KPI Portal will monitor the trends in the upcoming months and share them with you.