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Are Nonfinancial Metrics Good Leading Indicators of Future Financial Performance?

June 13, 2016 | Vincent O'Connell, Don O'Sullivan | Strategy

Although using nonfinancial metrics like customer satisfaction has become increasingly popular in assessing executive performance and determining compensation, the practice has some significant drawbacks. Not all metrics apply equally to all industries. Companies considering such metrics for strategic performance management frameworks should be mindful of the importance of knowing their strength as lead indicators and applying them appropriately.

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