Douglas W. Hubbard wrote a popular book on management and performance measurement, How to Measure Anything: Finding the Value of ‘Intangibles’ in Business
Hubbard begins the book this way, expressing the value of measuring anything. He says, “When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind…”. He later states that “Even touchy-feely-sounding things like ’employee empowerment,’ ‘creativity,’ or ‘strategic alignment’ must have observable consequences if they matter at all.” Hubbard declares that “…management needs a method to analyze options for reducing uncertainty about decisions.” In short, measurement is about supporting good decisions.
These quotes support the goals of the Balanced Scorecard and other methodologies that measure or monitor organization performance against strategic goals. The Balanced Scorecard was developed by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that adds strategic non-financial performance measures to traditional financial metrics to give managers and executives a more ‘balanced’ view of organizational performance.
A central theme of the book is that measuring to reduce uncertainty is beneficial even though you cannot eliminate uncertainty altogether. Hubbard says, “when that uncertainty is about big, risky decisions, then uncertainty reduction has a lot of value…”.
SharePoint Server 2010 and the business intelligence capabilities in Visio, Excel, PerformancePoint Services, and SQL Server can help you measure the intangibles discussed in the book and reduce uncertainty in decision making. For introductions to the tools SharePoint provides, see the following.
If you are just starting to uncover what to measure and how, I suggest that you read the book How to Measure Anything. Another book by Douglas W. Hubbard that is worth reading is The Failure of Risk Management: Why It’s Broken and How to Fix It. Then combine what you discover can be measured with tools in SQL Server and SharePoint Server 2010 that can be used to measure.