How To Avoid Making Common Mistakes When Measuring Performance
This is the transcript of a Webinar hosted by InetSoft on the topic of "Business Intelligence Agility". The speaker is Mark Flaherty, CMO at InetSoft.
What we’re going to cover is first of all how to avoid making common mistakes when measuring performance. I’ve seen a lot of organizations develop their scorecards or dashboards, or whatever they call them, and there are some very common mistakes. We’re going to go over those and probably all of you will find you’re doing at least one or two of them, so I apologize in advance for that.
I’m going to talk about how to develop indicators or analytic measures that give you a way to still have a reasonable number of gauges or metrics that you look at and have a lot of intelligence behind them by being able to drill down and give you some ideas on how to measure difficult aspects of performance, like customer satisfaction and employee satisfaction.
Finally, I’ll show you how to drill this all the way down to the employee level where the work gets done so you can actually improve performance rather than just looking at reports.
Supplement the Statistics
The first thing to understand is that I don’t care how good your scorecard is or the kind of data that you’re collecting. Whether it’s financial or some other type of data, you need to supplement the statistics with other types of data: observational data, asking questions of people, having periodic studies done like audits and evaluations and finally, tracking the stuff that you look at daily, weekly, monthly that makes up your scorecard.
Often what I find in organizations is their scorecard measures might show that they are at a green level of performance. In other words they are hitting their target or standard but their anecdotal data or their gut feel data tells them they’re having a problem. Maybe you have a gut feel you’re having a problem with your customers. Little subtle things like they don’t return emails as quickly as they used to. The point of all this is that you need other types of data besides statistics and charts and graphs.
The bigger the organization, the less time they tend spend collecting observational data and asking questions and the more time they spend in meetings looking at charts and graphs. I’m sure that a lot of you have seen the show Undercover Boss where the CEO puts on a beard and glasses and goes and pretends to be a worker, they are collecting observational data. Most CEOs come away in tears and get a whole lot of different information about their organization that they’d never get by sitting in a boardroom looking at charts and graphs.
The point of this is that your scorecard is only one type of a performance management tool that you need to run your organization. You also need to ask questions and see what’s going on and periodically. Involve outsiders to do some kind of audits and studies.
Link All Your Metrics
Here are some of the biggest mistakes I’ve seen organizations make. Probably one of the most common ones is coming up with some vague vision statement and then trying to link all your metrics and your scorecard to the vision. In fact, some of the books on balanced scorecards even suggest that that’s how you should do it.
The vision statement should be clear and focused, ideally written by one person; the CEO or the director or the general. I’ve never seen a good one that’s written by a team. A typical scenario is you go off and have a strategic planning retreat and everybody brainstorms a bunch of these stupid Dilbert words and then you cobble them together in some awkward sentence that no one understands, but everyone is happy because they got their pet word in there. So you end up with something that says, “Our vision is to be a world-class leading edge customer focused producer of value added products and services using empowered employees in a lean Six Sigma fashion,” and everybody is happy but nobody knows what it means. Once you have clarity in your vision it makes a big difference.
Rare Earth Metal Recycler Switched From Databox to InetSoft for a Performance Measurement Solution
Rare earth metal recycling is a highly specialized industry where efficiency and precision have an outsized impact on profitability. Companies in this space must carefully track yield rates, recovery efficiency, environmental compliance, and logistics costs across multiple facilities and supply chains. One recycler had long relied on Databox to monitor performance, but the platform’s limited customization and integration options made it difficult to capture all the nuanced metrics their operation demanded. As their business expanded, they needed a solution capable of combining data from complex sources such as industrial IoT sensors, ERP systems, and environmental monitoring tools into one cohesive view. This led them to adopt InetSoft’s performance measurement solution.
InetSoft provided the flexibility and scalability the recycler required. Unlike their previous setup, InetSoft’s platform supports direct data mashup without forcing the company to restructure existing pipelines or heavily rely on IT to maintain integrations. Real-time connections to manufacturing control systems and third-party compliance reporting tools allowed managers to see production efficiency, recovery rates, and emissions levels in a unified dashboard. This gave the operations team immediate visibility into bottlenecks and quality issues, enabling proactive adjustments rather than reactive reporting.
Another key advantage of switching to InetSoft was the ability to fully customize KPIs and dashboards for different stakeholders. Databox had a more rigid approach that worked for general business metrics, but rare earth recycling requires industry-specific insights like contaminant ratios, furnace uptime, and shipment lead times. With InetSoft, the company built role-based dashboards that provided plant operators with granular operational metrics while giving executives higher-level views focused on profitability and sustainability goals. Self-service reporting empowered engineers and analysts to explore data independently, reducing reporting backlog and speeding up decision-making cycles.
The transition also delivered measurable cost and performance benefits. By consolidating reporting into InetSoft’s platform, the recycler eliminated redundant tools and manual reporting tasks, reducing overhead. Enhanced visibility and predictive insights helped them optimize equipment maintenance schedules, improving uptime and cutting energy waste. Compliance reporting for regulators and clients also became faster and more reliable, strengthening the company’s reputation in an industry where trust and transparency are critical. For this rare earth metal recycler, moving from Databox to InetSoft meant far more than a platform upgrade; it enabled a culture of data-driven performance measurement that keeps pace with their complex and rapidly evolving business.