This article explores three common traps that managers fall into when measuring their strategy’s performance and explains how to avoid them. The first trap is when the strategic framework and measurement system don’t align. To fix it, you must organize both around key stakeholders. The second trap is when companies measure what they do rather than what they achieve. To fix this, focus on stakeholder outcomes. The third trap is a lack of focus. To fix it, cascade rather than amalgamate your metrics. This is hugely important because it’s almost impossible to track the success of a business strategy if there are no reliable key performance indicators (KPIs). Conversely, poor performance measurement can encourage misdirected strategic targets.
Both can lead to repeat performances of the same failed decisions.
1. Non-matching frameworks The trouble was that it didn’t match main roads’ existing performance measurement framework, which was organized around programs such as road safety, road efficiency, and road maintenance.
How to fix it: Organize around key stakeholders. The organization’s strategic plan was structured around “key issues” like budget overruns, obtaining grants, and hiring staff. The KPIs were a hotchpotch of metrics drawn from a variety of sources including HR, accounting and finance, and operations including operating expenses and the number of staff training courses run. headtopics.com
organization’s key stakeholders. For example, in the case of the stakeholder staff, Marjorie’s organization wanted to ratchet up innovation around the services they provided for people with autism and their families.
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