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How many color status indicators is the right number for a scorecard? Many users have Red, Amber (Yellow), and Green, but is that enough? Some people have Blue or Gray to represent no data, and others have some shade above green meaning that they are well above the target. What is the right answer? |
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Based on my experiences in dozens of strategy review meetings, I think 3 colors is more than sufficient. Companies often get caught up in the color coding for the wrong reasons and it becomes an exercise in artificial accuracy. The goal is not about pinpointing the color with 100% accuracy - but about driving the right discussions about where strategy is not being executed to achieve the agreed to goals and targets. Companies often get caught up in the precision of their reporting and how close their metrics are to targets that they lose sight of whether or not they are achieving truly achieving their strategic objectives and what they need to discuss to drive better performance. This is about managing to better execute strategy not just about metrics and measurement precision by itself. In the end, the goal with color coding should be about driving more informed, timely, and relevant discussions to drive better decisions and better execution. Otherwise, it is like deciding do I want to go on the red raft or the orange one when your boat is listing. It does not matter - the key point is you need to act. |
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Measuring strategic performance is different than measuring operational performance... for strategy we just need indicators (not measures) and the performance trend over time. To communicate indicators one needs only a few icons. We have moved away from just colours - colour blind people cannot tell the difference between red and green on a report/screen. We use coloured icons (e.g. up arrows etc. or different shapes) for each performance. We typically use five icons ( well below target"red", below target"amber", within tolerance of target "green", too much above target "dark green" and no data "grey") I agree that icons are better than just colors, but I typically use three colors (R, Y, G), plus blue for "no information."
(Jul 13 '10 at 10:55)
Dylan ♦♦
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I have used the Balanced Scorecard in 19 areas. Red,Amber,Green are all that is required. As long as there is an action plan to address the amber and the reds that is the main priority. Now the Customer Scorecard that is a different story, everyone should try to achieve gold on this.
Lisa, please explain your Customer Scorecard.