SPP Performance Measurement & Evaluation 2 — Questions and Answers
Question 1: Which characteristic distinguishes a leading indicator from a lagging indicator in strategic performance measurement?
- It measures outcomes after they have occurred
- It predicts future performance before outcomes are realized (Correct answer)
- It is reported on an annual basis only
- It requires financial data as its primary input
Correct answer: It predicts future performance before outcomes are realized
Leading indicators are predictive measures that signal future performance, whereas lagging indicators reflect outcomes that have already occurred.
Question 2: An organization's strategy map shows a weak causal link between 'employee training hours' and 'customer satisfaction scores.' What should a strategic planner do first?
- Remove the training hours KPI from the Balanced Scorecard
- Investigate whether an intervening variable explains the weak link (Correct answer)
- Increase training hours to strengthen the correlation
- Replace customer satisfaction with a financial metric
Correct answer: Investigate whether an intervening variable explains the weak link
Before altering the strategy map, planners should investigate confounding or intervening variables that may obscure the hypothesized causal relationship.
Question 3: In the context of the Balanced Scorecard, the 'internal business process' perspective primarily addresses:
- How the organization appears to shareholders
- Which processes must excel to satisfy customers and owners (Correct answer)
- How the organization learns and improves over time
- What financial returns are generated by operations
Correct answer: Which processes must excel to satisfy customers and owners
The internal business process perspective focuses on the critical processes organizations must excel at to deliver the value propositions that attract and retain customers.
Question 4: A government agency uses program logic models to evaluate strategic initiatives. What does the 'outputs' box in a logic model represent?
- Long-term community changes attributable to the program
- Direct products or services delivered by the program activities (Correct answer)
- Resources invested to run the program
- Short-term changes in participant knowledge or behavior
Correct answer: Direct products or services delivered by the program activities
Outputs are the direct, tangible products or services produced by program activities, distinct from the longer-term outcomes they are intended to generate.
Question 5: Which method is MOST appropriate when an organization needs to evaluate whether a strategic initiative caused a specific outcome versus other environmental factors?
- Benchmarking against industry peers
- Quasi-experimental or counterfactual analysis (Correct answer)
- Customer satisfaction survey
- Return-on-investment calculation
Correct answer: Quasi-experimental or counterfactual analysis
Quasi-experimental and counterfactual methods compare outcomes to a control or comparison group to isolate the causal effect of an initiative from confounding factors.
Question 6: What is the primary risk of setting too many KPIs on an organizational scorecard?
- It reduces the budget available for data collection
- It disperses attention so that no single metric drives meaningful action (Correct answer)
- It violates most regulatory reporting standards
- It prevents the use of software dashboards
Correct answer: It disperses attention so that no single metric drives meaningful action
An excessive number of KPIs dilutes focus, making it difficult for leaders to prioritize actions and often resulting in measurement without management.
Question 7: A strategic planner is presenting performance results to the board and notices actual revenue is 10% below target. Which framing best demonstrates strategic acumen?
- Report only the favorable metrics to maintain board confidence
- Contextualize the gap with root-cause analysis and corrective action options (Correct answer)
- Defer the discussion until a full fiscal year of data is available
- Blame external market conditions without offering solutions
Correct answer: Contextualize the gap with root-cause analysis and corrective action options
Effective strategic communication pairs variance disclosure with root-cause analysis and actionable corrective options, enabling informed board decision-making.
SPP Performance Measurement & Evaluation 2
Which characteristic distinguishes a leading indicator from a lagging indicator in strategic performance measurement?