Performance Metrics Flashcards

The Balanced Scorecard measures performance across four perspectives. Which set is correct?

Answer: Financial, customer, internal processes, learning and growth

Kaplan and Norton's Balanced Scorecard uses financial, customer, internal process, and learning and growth perspectives.

A client's customer acquisition cost (CAC) is $400 and average customer lifetime value (CLV) is $350. What should the coach conclude?

Answer: The business loses money on each new customer and must fix unit economics

When CAC exceeds CLV, each acquired customer destroys value, signaling unsustainable unit economics.

Which metric best captures how quickly a business converts its receivables into cash?

Answer: Days sales outstanding (DSO)

DSO measures the average number of days it takes to collect payment after a sale.

During a quarterly review, a coach notices a KPI target was met by cutting quality inspections. What performance-measurement pitfall does this illustrate?

Answer: Gaming the metric at the expense of true performance

Optimizing a number while undermining the underlying goal is classic metric gaming, per Goodhart's law.

Net Promoter Score (NPS) is calculated how?

Answer: Percentage of promoters minus percentage of detractors

NPS subtracts the percentage of detractors (0-6) from the percentage of promoters (9-10).

A coach helps a client set a baseline before a 90-day improvement plan. Why is the baseline essential?

Answer: It provides a reference point to quantify progress objectively

A baseline establishes the starting point against which improvement is objectively measured.

Which metric would best indicate operational efficiency in a manufacturing client's plant?

Answer: Overall equipment effectiveness (OEE)

OEE combines availability, performance, and quality to gauge manufacturing efficiency.