Overview
Discussion: More and more, senior leaders are developing management systems based on holistic metrics that offer different options to better measure success.
Imagine that the senior leader of your company/organization has hired you as a consultant to provide advice. You yourself have just returned from Jerry Muller's seminar on the Tyranny of Metrics. The timing is good. You want to share what you learned.
Considering the metrics you reported on in Week 1, the new management approaches you learned about this week, and your learning from the Tyranny of Metrics:
- Briefly summarize, in your own words, the following management approaches: a) Balanced Scorecard, b) Danaher Business System, and c) OKR. Then, choose which one is most appropriate for your company, making sure to explain the rationale behind your choice.
- Make sure to use metrics in your recommendation. Be specific. Show the numbers. Make a numbers-based argument for your choice. If you have to estimate numbers, that's okay. Just make sure they're realistic.
In your responses to others, focus on arguing for alternate viewpoints. Challenge each other on "the most appropriate choice" for management systems. What could work better? Why? Play the devil's advocate if need be. What considerations are we not considering?
Assignment: In 2022, British International Investment (BII), the 8.1 billion pound development finance arm of the British government, implemented a new impact measurement system called the Impact Score to align its financial and impact objectives systematically. The tool was designed to measure and manage impact across three dimensions, including productivity, sustainability, and inclusion, and to guide portfolio-level decision-making. By integrating the Impact Score into its investment framework, BII aimed to achieve its dual mandate of achieving development impact while maintaining moderate financial returns. The case examines BII's efforts to balance financial and impact trade-offs through portfolio construction and features a simulation exercise to explore the practical application of the Impact Score in optimizing impact and financial outcomes.
Read the case study, Balancing Impact: Modeling the Future at British International Investment, in your Harvard Coursepack. Also, read the simulation instructions and download the Simulation Portfolio Download Simulation Portfolio (PowerPoint presentation). Using the deals included in the case, select up to four deals and:
- Complete the simulation, designing an optimal portfolio based on your understanding of BII’s investment goals.
- Design your own personal impact thesis and design an alternative portfolio.
Prepare a memo for Nick O’Donahue, the CEO, that explains your optimal portfolio based on BII’s goals and advocates in favor of your alternative portfolio.