More comments on maintaining clear distinctions in the measurement / success descriptions

We use two levels of measurement to support decision making and the management of performance. It is critical to maintain a clear distinction between the varying levels in order to ensure that the correct assumptions can be made about the results. Currently, we are using a strategic/tactical measures framework:

1) Strategic: Balanced scorecard measures
a. Measures the progression of the corporation toward the desired state as described in the objective statement (as further clarified by board objectives)

2) Tactical: Initiative reporting
a. Measures the quality of the implementation of corporate initiatives

It is critical to maintain a very clear distinction between the two layers, or a comparison between the results of the two levels will cloud the conclusions intended from this measurement structure. By separating the measurement into the balanced scorecard (impact of the strategies) and the corporate initiatives (implementation of the strategies) the organization is able to determine whether the strategic and the operational were successful separately. When these are mixed, this clarity is lost.

This framework should show you the following:


The implementation of the strategies has been done in a way that achieves the desired results

THEN this determination can be made:

We are progressing toward the desired state as measured by the scorecard and described in the objective statements

RESULTING IN clarity around the following

The organization has chosen the correct strategies

Guidelines for measures

Balanced score card measures:
– Both qualitative/perceptual and quantitative measures are appropriate
– Indicate organizational performance and progression relative to the long-term objectives
– The organization can control the outcomes and be held accountable for the results

Initiative Reporting measurement:
– Quantitative measures are appropriate
– Focused on the quality of the initiative implementation
– Defines the success and outcome of the project as initially intended

Guidelines for success statements

Balanced scorecard measures:
– Success is the advancement that results from corporate initiatives but does not refer to tactics originating in the initiative action plans
– Measures corporate level success: corporate performance or of the responsibility of the corporate entity
– Measurable and non-subjective

Initiative Reporting measurement:
– Defines the specific outcome of the project in order to create the desired impact on corporate measures and progression
– Specific in terms of deliverables and outcomes
– Measurable and non-subjective

Why are metrics so important?

People naturally resist control. I’m not sure why this is so ingrained, it’s almost instinct. This is probably why most people resist the accountability that planning and the establishment of metrics appears to have, unless they understand the real value it can bring. Once your team understands that a properly implemented measures framework can enable you make better decisions and supports advancement, they may be less resistent. This will likely be consistent with their level of interest and support for your future vision.

Here are a couple thoughts for why metrics are useful for your business:

o Measures help you understand the progress you’re making
o Help you understand whether your strategies are having the desired impact
o When people commit to goals, it releases energy in an organization
o It defines what we’re trying to accomplish
o It sets the context for what priorities should be undertaken in the next year
o It gives the board a concrete way of setting expectations
o Provide information from which to make directional and tactical decisions
o Helps to create a process of continual improvement

When designing your measurement framework, it’s valuable to begin with a discussion on what measures will consist of. This will help you maintain a set of metrics that are consistent with your long-term objectives. This is a critical step, as measures create focus and discussion points for your team, executive and board.

Here are some examples of criteria for measures:

o Something to which we can be held accountable
o An indicator of your performance
o You can be held accountable for the results
o It is actionable
o It is specific
o It is measurable
o It is tied to the long-term objectives of the organization

After you have your criteria set, take the time to discuss each measure in detail and make sure it is RIGHT for your organization. Here are some possible discussion points:

o What does this measure tell us? (first cut at drivers)
o What is the history for this measure?
o Compare against the objectives – is it linked?
o Confirm: Are they clear, specific, actionable?
o Could we do without it?
o What kinds of decisions might we make based on this? (is it actionable?)

There may be some measures that are valuable to your organization that don’t qualify as a measure because it doesn’t fall under your control. You may find value in classifying these as “Indicators” and reporting them alongside your measures or through a research framework. Examples of this could be indicators of trends in the macro or market environment that could impact your business in the future and may require a strategic response.

Acid test for scorecard perspectives

Most companies do not prescribe to the base scorecard model originally deployed by Kaplan and Norton. The methodology continues to evolve, and while still true to the original design and concept, ongoing customization continues. I believe this is the sign of positive evolution and understanding, in addition to being a reflection of the individual needs of organizations and industries.

There is a simple test I use when helping organizations design their scorecard perspectives. Yes, this word is overused (google: “bullshit bingo”) however I believe there is a synergy to be gained when there is a recognized and clear interconnectivity and reliance between these perspectives, wherein the success of each focus area contributes to the success of the next and is subsequently reliant on the former. If this connection can be clearly defined in an honest process, it’s a good sign that you’re on the right track.

Focus areas represent unique and core aspects of your business focus, but they do not exist on their own. They must compliment the other perspectives. It’s similar to another cut of the strategy map, but it provides a unique output. All said and done, it leaves you with another piece of information to share in the release and knowledge building phase of your implementation. This picture tends to increase confidence in the scorercard.

I believe that graphical representations of relationships are often the most important structure through which to communicate complex information. If people start to think, talk and draw through the image you’ve shared, you know they understand it and are now using it to help them build a deeper understanding.

Accountability distinctions in a measurement framework

I have recently been in conversations with clients regarding how to construct a measurement framework for their organization, given that it is receiving a fairly significant overhaul. While many organizations have this level 0f detail already included, I thought it would be valuable to highlight a few foundational points with regards to the distinction between strategic and operational accountability.

Choosing the right metrics and setting the right targets is a detailed topic to say the least. If you design the framework well, it will provide arm your management team with prepared minds as an input to ongoing decision making. If designed poorly, it can result in cloudy information floating back for review during your regular business plan implementation reviews.

Here is concept 1: Recognize the accountability distinctions in your design.

It is in the realm of the board to choose the appropriate direction for the organization, and to ensure governance frameworks are in place and managed appropriately. It is in the realm of the executive to ensure the appropriate strategies have been chosen to achieve the board results and to be held accountable for the operational implementation for those accountable to them. It is in the realm of the line manager to ensure that the implementation of the strategies are completed as originally defined by the strategic/operational planning process.

In many companies, this would seem like an elementary article and yet it’s missing in many small to medium sized organizations. In some companies, this distinction may be more detailed than just 2 layers. For the purpose of this example (2 layer distinction) you want to be able to answer the following:

1) Did we choose the right strategies? Corporate Balanced Scorecard Measures indicate whether your initiatives / priorities are having the intended impact of moving you toward your desired state.

2) Did we implement them effectively? Initiative/Corporate Tactic reports provide you with an indication of whether the implementation is being carried out effectively.

The impact of FOCUS

How many things can you focus on at one time? If I were to ask you to do one thing really well, you would undoubtedly make it happen. Your entire focus would be on that single activity. If I were to ask you to accomplish 3 things at one time, your focus would be split. You’d get them done, but in the same amount of time some aspect of your outcome would suffer. Now, what would happen if I asked you to get 15 things done at one time? It’s pretty clear what would happen, it would likely be a disaster. The question is: Why would someone ask you to do 15 things at once?

The risk of focusing your business or yourself too wide is that you and your teams will get lost in the plan. The quality of the outcome will decrease and several of those activities will not get done well or at all. The greater risk still is that your team will not engage the plan at all.

While my original scenario of 15 simultaneous priorites seems like a stretch, it really isn’t for many companies. Team plans are often made up of long lists of priorities and “strategies” that ultimately result in lower commitment to the plan because the plan is not focused.

Focus your team on activities that are strategically critical to your success and advancement and learn to filter out the activities that don’t need to be there. Team are much more able to make the connection between the compelling vision of the future and the few focused strategies for moving ahead than an overwhelming and cluttered priority structure.

Engage in a focused activity, bite off what you can chew and you’ll see some real progress.