CBS Performance Measurement & KPIs 2 — Questions and Answers
Question 1: A company's customer satisfaction score drops from 87% to 79% over two quarters. What is the MOST strategic first response?
- Launch an immediate advertising campaign to improve brand perception
- Conduct root cause analysis to identify drivers of the decline (Correct answer)
- Replace the customer service team leadership
- Lower price points to retain dissatisfied customers
Correct answer: Conduct root cause analysis to identify drivers of the decline
Root cause analysis identifies the underlying drivers of performance decline before implementing corrective actions.
Question 2: Which type of KPI measures outcomes that have already occurred and cannot be changed?
- Leading indicator
- Lagging indicator (Correct answer)
- Concurrent indicator
- Predictive indicator
Correct answer: Lagging indicator
Lagging indicators reflect past performance outcomes, such as revenue earned or customer churn rate.
Question 3: An organization uses a Balanced Scorecard. Under which perspective would 'employee training hours per quarter' be classified?
- Financial
- Customer
- Internal Business Process
- Learning & Growth (Correct answer)
Correct answer: Learning & Growth
Employee training metrics fall under the Learning & Growth perspective, which focuses on organizational capability development.
Question 4: What does a KPI cascade ensure in a large organization?
- That all departments share identical KPIs
- That executive KPIs are broken into aligned metrics at every organizational level (Correct answer)
- That KPIs are reported only to senior leadership
- That financial KPIs take precedence over operational ones
Correct answer: That executive KPIs are broken into aligned metrics at every organizational level
KPI cascading aligns departmental and individual metrics with enterprise-level strategic objectives.
Question 5: Which of the following BEST describes an Objectives and Key Results (OKR) framework?
- A financial reporting system used to track revenue and cost targets
- A goal-setting method pairing qualitative objectives with measurable key results (Correct answer)
- A project management tool focused on task completion timelines
- A benchmarking system comparing performance against industry averages
Correct answer: A goal-setting method pairing qualitative objectives with measurable key results
OKRs combine an inspirational qualitative objective with 2–5 quantitative key results that measure progress toward it.
Question 6: A business strategist notices that a KPI is consistently met but the underlying strategic goal is not being achieved. This MOST likely indicates:
- The target is set too low
- The KPI is a poor proxy for the actual strategic objective (Correct answer)
- The team is underperforming on execution
- External market conditions have shifted unfavorably
Correct answer: The KPI is a poor proxy for the actual strategic objective
When KPI achievement doesn't produce strategic outcomes, the metric is likely measuring the wrong thing.
Question 7: In the context of performance measurement, what is 'benchmarking'?
- Setting internal performance targets based solely on historical trends
- Comparing an organization's metrics against best-in-class or industry standards (Correct answer)
- Establishing a baseline measurement before a new initiative launches
- Reviewing KPIs on a fixed quarterly schedule
Correct answer: Comparing an organization's metrics against best-in-class or industry standards
Benchmarking compares organizational performance against external standards to identify gaps and improvement opportunities.
CBS Performance Measurement & KPIs 2
A company's customer satisfaction score drops from 87% to 79% over two quarters.
What is the MOST strategic first response?