What many boards and executives STILL don’t know about the health of their businesses

April 2007 from Deloitte – “In March and April 2004, the Economist Intelligence Unit surveyed 249 senior executives and board members around the world and interviewed a number of corporate directors in North America, Europe and Asia. The report concluded:“While the overwhelming majority of board members and senior executives say they need incisive non-financial information on their companies’ key drivers of success, they largely find such data to be lacking or, when available, of mediocre to poor value…

Almost three years later, Deloitte and the Economist Intelligence Unit worked together to see whether things had changed and conducted the research along much the same lines as before. A global survey fielded in December 2006 obtained responses from 175 senior executives and board members. Then, through January 2007, in-depth telephone interviews were conducted with senior executives and board members at large companies.

Some key findings include:
(1) Existing performance measurement frameworks are inadequate, and the majority of executives perceive a growing need to better understand the underlying drivers of their performance through non-financial measurements.
(2) Though companies are aware of the pitfalls of focusing exclusively on financial performance, the ability of executives to measure and monitor performance through non-financial measurements appears to be inadequate. Companies either do not have or are not sharing critical nonfinancial performance data with their boards.
(3) Despite the dissatisfaction with the quality of non-financial measurements of performance, current impediments to the broader use and greater sophistication of non-financial performance metrics include undeveloped tools, organizational skepticism relating to the value of these tools, unclear accountability for nonfinancial performance, time constraints and the concern that such metrics may convey too much information to competitors.

180 View – Every problem for someone is an opportunity for another. There are many consulting firms and software developers that are standing by to help.

The non-financial data is a key to the balanced scorecard. See our white paper
“Corporate Performance Management - It's ready - Are You?” for a discussion of balanced scorecard under Scorecarding.