Dumbing down performance measures

Abstract

Purpose

The purpose of this paper is to examine why and how firms adopt less‐than‐perfect surrogate measures and, in extreme cases, dumb down measures to support strategic scorecards.

Design/methodology/approach

The paper presents a taxonomy to classify the different types of surrogate measures and workarounds are suggested for evaluating performance when surrogate measures are present.

Findings

The use of low investment surrogate measures is tempting when firms face the prospect of measuring strategic objectives, especially around intangible assets. Current approaches tend to be ad hoc and would benefit from being more systematic.

Practical implications

The approach enables firms to recognise the potential for dumb measures, suggest workarounds and improve current practice for managing with less relevant measures.

Originality/value

The taxonomy and workarounds presented provide greater rigour, insight and legitimacy to the use of surrogate measures in scorecards.

Citation

Walsh, P. (2005), "Dumbing down performance measures", Measuring Business Excellence, Vol. 9 No. 4, pp. 37-45. https://doi.org/10.1108/13683040510634826