CBC Performance Metrics 3 — Questions and Answers
Question 1: The Balanced Scorecard measures performance across four perspectives. Which set is correct?
- Financial, customer, internal processes, learning and growth (Correct answer)
- Financial, marketing, legal, operations
- Sales, HR, IT, logistics
- Revenue, cost, profit, cash
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.
Question 2: A client's customer acquisition cost (CAC) is $400 and average customer lifetime value (CLV) is $350. What should the coach conclude?
- The business loses money on each new customer and must fix unit economics (Correct answer)
- The business is highly profitable per customer
- CAC and CLV are unrelated metrics
- The client should double marketing spend immediately
Correct 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.
Question 3: Which metric best captures how quickly a business converts its receivables into cash?
- Days sales outstanding (DSO) (Correct answer)
- Gross margin percentage
- Employee turnover rate
- Net promoter score
Correct answer: Days sales outstanding (DSO)
DSO measures the average number of days it takes to collect payment after a sale.
Question 4: During a quarterly review, a coach notices a KPI target was met by cutting quality inspections. What performance-measurement pitfall does this illustrate?
- Gaming the metric at the expense of true performance (Correct answer)
- Regression to the mean
- Survivorship bias
- Seasonality adjustment error
Correct 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.
Question 5: Net Promoter Score (NPS) is calculated how?
- Percentage of promoters minus percentage of detractors (Correct answer)
- Average of all survey scores
- Total promoters divided by total customers
- Percentage of detractors minus percentage of passives
Correct answer: Percentage of promoters minus percentage of detractors
NPS subtracts the percentage of detractors (0-6) from the percentage of promoters (9-10).
Question 6: A coach helps a client set a baseline before a 90-day improvement plan. Why is the baseline essential?
- It provides a reference point to quantify progress objectively (Correct answer)
- It guarantees the plan will succeed
- It eliminates the need for future measurement
- It satisfies tax reporting requirements
Correct answer: It provides a reference point to quantify progress objectively
A baseline establishes the starting point against which improvement is objectively measured.
Question 7: Which metric would best indicate operational efficiency in a manufacturing client's plant?
- Overall equipment effectiveness (OEE) (Correct answer)
- Click-through rate
- Cost per lead
- Share of voice
Correct answer: Overall equipment effectiveness (OEE)
OEE combines availability, performance, and quality to gauge manufacturing efficiency.
CBC Performance Metrics 3
The Balanced Scorecard measures performance across four perspectives.
Which set is correct?