Metric Overview

Critical Measures / Scorecard

Your Critical Measures serve as a way to track progress toward the goals outlined in your organization's Focus/Strategy. To determine the most important metrics, consider the following questions:

• Is this measure critically important to your organization or department?

• Do you have a reliable way to measure it?

• Can you collect meaningful data on this metric every month?

If the answer is no to any of these questions, reconsider whether the measure is necessary or find a way to make it measurable. Your list should include no more than 15 critical measures to maintain focus and effectiveness.

Validating Measures

To ensure your metrics remain relevant:

• Quarterly Review: Reassess the relationship between your Critical Measures and your Focus/One Page Strategy.

• Adjust as Needed: If your strategy changes, immediately update your critical measures to reflect the new direction.

Communicating Measures

For metrics to be effective, they must be clearly communicated:

• Monthly Updates: Share critical measures with employees regularly.

• Explain Changes: Ensure any adjustments to metrics are thoroughly explained.

• Employee Impact: Help employees understand how their work contributes to these measures and the organization's success.

Example: Net Worth

• What it measures: Financial strength

• Target: Well-capitalized (greater than 7% as defined by NCUA)

• Why it's important: Organizational stability and ability to withstand financial challenges

• How to improve it:

  • Increase net income

  • Manage deposit growth

• Calculation: Net worth is determined by taking the Credit Union's Total Equity, adjusting for unrealized gains/losses on securities, and dividing by Total Assets.

Discussing Your Metrics

Regular discussions about metrics help drive improvement and accountability. Key areas to focus on include:

• Checkpoint Review: Assess the current status of each measurement.

• Identify Influencing Factors: Understand the internal and external drivers behind the results.

• Project Future Trends: Anticipate upcoming changes that may impact performance.

• Problem-Solve Barriers: Address obstacles preventing success.

• Recognize Achievements: Celebrate progress and contributions.

• Teach & Coach: Ensure all team members fully understand each measurement and its significance.

Balanced Scorecard Approach

A Balanced Scorecard is a widely used framework for setting up metrics. It ensures a well-rounded approach by considering multiple perspectives:

1. Financial – To succeed financially, how should we appear to our stakeholders?

2. Internal Business Processes – To satisfy stakeholders and customers, what processes must we excel at?

3. Customer – To achieve our vision, how should we appear to our customers?

4. Learning & Growth – To sustain growth and adaptability, how will we continue evolving?

By integrating these perspectives, organizations can create a comprehensive and strategic measurement system that drives success.

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