How do you know if you have the right measures…

The question of how you know whether you’re measuring the right things is something many executive teams occasionally ponder. Rightly so, corporate measures play an integral role in driving behaviors and accountability within an organization. The opportunity cost of having strategy-neutral measures is huge.

There is no quick and dirty solution to whipping up a new scorecard in 2 weeks if your strategy management practices are lacking. The answer starts with clarifying your commitment to a specific value discipline, and then building a concise strategy map. Working backward from the strategy map, create a series of measurement objectives that will guide your selection of measures. My opinion is that if your strategy map describes what is most critical to your success, this is also where the focus of your measurement should be. Selecting measures outside the clarity of this context creates a situation where you’re guessing (intuition) and risking having a number of general business measures that aren’t strategy-specific. I consider anything outside of the context of the map to be strategy-neutral, hence a distraction. If you run into a conflict where something seems to missing from your scorecard, that’s just an opportunity to test whether something is missing from your map or not.

And now this takes us to the next step: your measurement objectives describe the outcomes you want the measures to create, however you still need to test and select the measures that will speak to each objective. So, build a list of criteria for what you see as an effective mix of measures. It’s ultimately not a guarantee you’ll select the right measures, but it’s a good check-point.

Maybe something like:

– Anticipated to drive behaviors that support the strategy and desired customer experience
– Timeliness / can be acquired at a useful frequency
– Is meaningfully connected to our strategy
– Accurate conclusions can be drawn from the results
– Is easily actionable
– The results are material to our success (doesn’t act as a distraction from more important issues) – the performance of which will have an impact that our customers care about
– Plays an appropriate part in an effective blend of leading and lagging indicators
– Represents a performance gap – targets change year-over-year
– Creates appropriate accountability
– Easily audited: Isn’t subjective and the result of which can’t be “played with
– Is reasonably easy to get, isn’t prohibitively expensive
– Is intuitive enough for people to know how it applies to the business, easily understood
– Is repeatable and consistent
– Allows peer comparisons (where meaningful)

Having a framework such as objective > measure > target builds in the context of why the measure was initially selected (objective), so that the logic behind how the scorecard was constructed is apparent. In this way, before someone can suggest a change to the scorecard, they need to demonstrate that:

1) The strategy map has changed
2) Or that one of the measures is driving the wrong behaviors
3) Or that one of the measures isn’t speaking to the objective
4) Or that the overall mix of measures doesn’t line up with the criteria (mix of leading, lagging etc)

…And this will help you manage your scorecard in a controlled and logical way.

Being on-mission

Most often, people intuitively know what is important to them, where they want to get to, what success looks like for them. To varying degrees but somewhat less often, people invest the time it takes to make it happen. If you listen to people like Donald Trump or Seth Godin, you’ll hear two completely different but similarly focused (in terms of absolute commitment to their vision) leaders who understand the concept that time is limited, and the amount of time we invest on our goals and dreams will determine the extent of success we achieve. It’s about tradeoffs, the time you spend on the couch isn’t being spent writing that book or launching that venture. So the question is: how much of your time do you spent “on-mission,” and have you taken the time to define what that is?

Organizations face a similar challenge, although one that’s more difficult to diagnose. Whether you have a strategy focused or operationally focused organization, people are busy. The question is whether people are always busy doing the things that are likely to propel your business forward or maintain status quo. As people are busy, are they on-mission / on-strategy or are they just busy? Now of course operations are essential, they run the business. But are you moving forward, or are you just busy? Do you have that sense of momentum? Have you created enough strategic clarity that people know what is “key” to your success? Is someone leading and inspiring? Are people held accountable for the right things?

Being on-mission takes more than a lot of energy, it takes sustained focus. Of course, the tortoise and the hare is a great analogy. Thinking outside of this analogy, having great energy and speed doesn’t preclude having focus. There are organizations (and people) who are like that hare, but who also keep that pace and focus without getting bored and taking a nap. Dell in its early days is a great example. There are also unfocused “tortoise” organizations who wander aimlessly and without focus. In these organizations, there is neither hunger nor strategy.

For most people and organizations, sustained focus is more challenging than bursts of energy. Now there’s a time to refocus and cut a dream or a project loose, and there’s time to step up to the plate… but if you’re going to cut one m loose, do it for the right reasons. Let it go when its relevance is no longer there or a bigger dream has replaced it. Don’t cut a dream loose because you got lost in the operations of your own life.

Let none of this suggest that balance isn’t important. Balance is about achieving all of your goals in a way that is proportional with their importance. Achieving a career goal at the expense of your health is a poor trade-off. Missing an episode of Survivor to write a chapter, finish a prototype or meet with an investor is not.

Most of us aren’t crazy. Eventually, we stop believing the potential for our own dreams if there’s little evidence that we’re going to follow through. Just like we stop believing leaders that can’t make something happen. Dreams and strategies that ride in the back pocket for too long without being fertilized by attention and progress can result in you simply giving up, with the recognition that it’s just not going to happen.

Take control: Live your life and do your work with purpose. Maintain your focus on meaningful outcomes, and consistently and relentlessly pursue that until you own it.

Tying measures to strategy

To what extent do you think it’s important to tie an employees’ performance plan to the work you want them to accomplish… to the things you need to them to know they’re accountable for? It’s difficult to argue the importance of creating clear accountability for THE RIGHT THINGS. Generally we approach this by listing out the operational tactics we need them to deliver. Expectations around doing their part to ensure the organization delivers on the customer experience get layered on in “fluffy” ways later on. What if there was a way to make delivering on the strategy part of people’s jobs? What would happen if people understood the strategy, and if the organization translated that down to a customer experience, and then created corporate level accountability for the quality of follow-through? Corporate level balanced scorecards are where the company creates accountability for the strategy at the executive level.

The selection of corporate measures tells employees what is truly important. When measures don’t speak specifically to the strategy, it indicates that the strategy isn’t primarily important. When measures do reflect the strategy, the energy of the company is organized behind this, making it happen.