What is a common mistake made by managers when setting improvement targets for nonfinancial measures?

Setting improvement targets for nonfinancial measures often involves a broader perspective than just one metric. The selection of assuming that 100 percent customer satisfaction is the only important goal exemplifies a common mistake. This perspective can lead managers to overlook other crucial factors that contribute to overall success and sustainability in a business.

Focusing solely on achieving perfect customer satisfaction can create an unrealistic target that is practically impossible to reach. While high customer satisfaction is essential, it should not be considered in isolation. Other nonfinancial measures, such as employee engagement, operational efficiency, and innovation, are equally important as they contribute to a holistic view of the organization's health and long-term performance.

By emphasizing only the goal of absolute customer satisfaction, managers risk neglecting the interconnectedness of various operational components. This can lead to potential organizational imbalance, where areas like employee morale or product development are compromised, ultimately impacting customer satisfaction itself. Therefore, a balanced approach that considers multiple aspects of nonfinancial measures is critical to setting effective improvement targets.