Executing Strategy – Measures of Performance

I think that this is everyone’s favourite part of executing strategy.  It’s certainly the part everyone rushes to get to! I have found many times over the years that this is the starting point for organisational planning – measures are decided upon before anything else, even before deciding what it is they actually want to achieve.  In this article I want to have a look at measures and why we have them.

“Before you worry about who should measure what, and what colours the presentations should be to show off your fabulous strategic implementation, start with what results your strategy should be achieving. Measures are born from clear, specific, measurable results.” Catherine Lavery

Your measures should be clearly aligned to your strategy.  If that is not the case, then you are unlikely to have meaningful evidence of being on the right path to achieving your goal and could in fact be encouraging behaviours that will hinder.  I would also ask:

  • Why are you using these particular measures? If you respond with – we have always used them so people are comfortable with them, that is not good enough.
  • What are they telling you? If it is just that, for example, we have issued 20 press releases in the past month, so what?  What was the result of the action/activity.

A question I have been asked many times is, ‘How many measures should we have?’.  I have seen instances of measure exhaustion.  This occurs when it seems that everything that can be possibly measured, is.  You may have come across that also.  It achieves nothing but confusion and merely a tick box exercise that in turn demoralises staff.  Too many measures can mean that you focus on the wrong things to the detriment of the end goal.  Too few may mean that you do not have enough confidence in what is actually happening and therefore cannot take action when required.  There is no right answer, other than few meaningful measures are better.  It will also be different for every organisation.

So what do you use for measures?  Milestones or actions?  No, these are not performance measures.  In my work I have seen many different “things” being used as measures of performance.  Do you have measures such as:

  • Improve the customer complaints process – that is an action that you would undertake to achieve what?
  • Implement a new HR System by January 2021 – again an action/activity/initiative but certainly not a measure.  Why are you implementing a new system?  What do you want to achieve?

If you do, then you need to revisit the measures you are using.

A definition of a performance measure I particularly like is from Stacey Barr:

A performance measure is objective evidence that regularly gauges the degree to which a performance result/outcome is occurring over time.

Other “measures” I have seen over the years are:

  • Staff Survey
  • Productivity
  • Sustainability Index
  • Customer Satisfaction.

Do you use any of these?  As they stand the above are really just collections of words that each individual could interpret differently.  The language used and detail given are crucial in ensuring that the performance measures you chose work for you.  As such, that is why you really should use an agreed process where you document what has been considered as potential measure along with the reasons for selection or rejection.

For performance measures to work well, staff must buy-in to them and value them as useful feedback to help them do their job.  Does your staff buy-in to your measures?  Do they use the measures to help in their own performance?  Or are the measures viewed as something that management does and nothing to do with them?

How do you get your staff to buy-in to the selected measures?  Involve them by asking for their opinion about the measures considered and those finally selected.  You may be pleasantly surprised by what you, and ultimately the organisation, get back.  By involving staff the measures become ‘ours’, not the senior management team’s.  The staff take ownership and there is a much better chance of it all working and reaching the end goal.

You can read the other articles in my series on Strategy Execution here.  Next week I’ll be looking at the next step – monitoring the progress of these meaningful measures.  In the meantime, if you’d like to get in touch to find out more about how to define the measures in your strategy, you can contact me here.

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