Document Type

Article

Publication Date

1-1-2007

Publication Title

Management Accounting Quarterly

First Page

1

Last Page

12

Additional Publication URL

http://www.imanet.org/resources-publications/management-accounting-quarterly/issues/Fall%202007

Abstract

With or without a balanced scorecard, it is easy for managers to become inundated with metrics and measures. In this article, we first highlight the differences between lagging and leading measures. Second, we illustrate the importance of differentiating the strategic leading indicators-the key leading measures-from those that may improve operational efficiency without significant improvements in profitability. Third, we use a business simulation to demonstrate that focusing on and improving the key leading measures has the greatest impact on profitability, but getting lost in the secondary measures dilutes the effect. Combined, the results illustrate that less may be more when it comes to measuring performance.

Rights

This article was originally published in Management Accounting Quarterly, 2007, Volume 9, Issue 1.

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