Why it’s worth your time to dial in your corporate metrics

The responsibility of the corporate performance management expert is to ensure that the feedback systems established within an organization accurately reflect the realistic dynamics of risk and reward associated with the business environment. If the metrics chosen do not correspond with strategy, or provide realistic feedback based on real business performance or risk (i.e. measuring the right thing) executives and employees will be operating in what is essentially an artificial (often artificially positive) environment. Within this environment, significant business risk can accumulate, as the organization may feel it is doing better than it is in reality. To this end, corporate metrics must be closely tied to what may be considered the harsher realities of the internal and market environments. Organizations that choose measures they can easily achieve are doing themselves no favors, over the longer term. The more of a realistic picture your measures tell, the more effectively you can navigate your competitive environment and mitigate inevitable risks.