Foundations of Performance
Control
Management Dashboard & Performance
Control
Said Marroun
Defining Management Control
Systems (MCS)
• “The process by which managers influence
other members of the organization to
implement the organization’s strategies.” –
Robert N. Anthony
• Strategy Formulation (The What) vs.
Management Control (The How)
• The goal: Ensuring strategic objectives are
actually executed.
How Control Systems Work
• 1. Detector (Sensor): Measures what is
happening (Data/Metrics).
• 2. Assessor: Compares current state to desired
state (Dashboards/Variance Analysis).
• 3. Effector: Takes action to alter the behavior
(Management Action).
• 4. Communication Network: Connects all
elements (Information Systems).
From Accounting to Multi-
Dimensional Control
• The Past: Purely financial metrics (ROI, Net
Income, Cash Flow).
– Flaw: Backward-looking. Tells you what happened,
not what will happen.
• The Present: Multi-dimensional metrics.
– Includes: Operations, Customer Satisfaction,
Employee Behavior.
Activity: The Pizza Shop
• Imagine you own a local pizza delivery shop.
• Question: How do you know if your business is
successful TODAY?
Not All Data is Created Equal
• Metric: A quantifiable measure used to track a
business process.
– Example: 'We sold 400 shirts today.'
• KPI (Key Performance Indicator): A metric that
measures progress toward a specific strategic
objective.
– Example: 'Goal: 10% market share growth. Current
growth: 4%.'
• The Rule: All KPIs are metrics, but not all
metrics are KPIs.
Leading vs. Lagging Indicators
• Lagging Indicators (The Output):
– Measure what has already happened.
– Easy to measure, hard to change.
– Examples: Revenue, Customer Churn, Net Profit.
• Leading Indicators (The Input):
– Predictive measures that signal future outcomes.
– Harder to measure, highly actionable.
– Examples: Sales calls made, Website traffic,
Employee training hours.
The Characteristics of a Good KPI
• S - Specific (Clear and targeted)
• M - Measurable (Can be quantified)
• A - Achievable (Realistic target)
• R - Relevant (Ties to strategy)
• T - Time-bound (Has a deadline)
• Actionability: If this KPI drops, does
management know what to do?
The Trap of Vanity Metrics
• Metrics that look impressive but offer no
meaningful business insight.
• They do not inform future strategies.
• Vanity: 'Total registered app users' (Includes
dead/inactive accounts).
• Actionable: 'Daily Active Users (DAU)' or 'Cost
per Acquisition.'
Activity: Leading or Lagging?
• 1. Employee Satisfaction Score
• 2. Quarterly Revenue
• 3. Number of safety inspections completed
• 4. Number of workplace accidents
Structuring the Dashboard
• Dashboards should not be a random collection
of charts.
• Frameworks provide an architecture for KPIs.
• They ensure all areas of the business are
monitored, not just finances.
The Balanced Scorecard (Kaplan &
Norton, 1992)
• Viewing a company purely through financial
lenses is like flying a plane using only the fuel
gauge.
• Four Perspectives:
– 1. Financial
– 2. Customer
– 3. Internal Business Process
– 4. Learning & Growth
Strategy Maps: The Cause-and-
Effect Chain
• Visualizing the 'If/Then' linkage:
• IF we train employees (Learning), THEN
processes speed up (Internal).
• IF processes speed up, THEN customers are
happy (Customer).
• IF customers are happy, THEN profits rise
(Financial).
OKRs: The Modern, Agile
Framework
• Used heavily in tech (Intel, Google, Spotify).
• Objective (The 'Where'): Qualitative,
ambitious, memorable.
– Example: 'Become the #1 CRM in Europe.'
• Key Results (The 'How'): Quantitative
milestones.
– KR 1: Capture 15% market share in Germany.
– KR 2: Onboard 50 new enterprise clients by Q3.
Breakout Activity: Build a
Framework
• Form groups of 4.
• Choose a well-known company (e.g., Netflix,
Tesla, Starbucks).
• Task: Develop 3 OKRs for their next quarter OR
create a Balanced Scorecard with 2 KPIs per
perspective.
• Be prepared to present to the class.