In practice, of course, things are never that straight forward. As the old maxim goes "If you can't measure it you can't manage it", and if you can't manage it you can't make sure it gets done. That is why Measuring Success Against the Vision and Objectives is the 4th stage of the Strategic Learning Cycle.
Conventional measurement techniques employed by organisations tend to be inadequate for measuring what is really strategically important in organisations. This often causes people to (erroneously) claim that the aforementioned maxim is incorrect. However, what it really means is that we need better measurement methodologies.
The most common tool for measuring strategy implementation is the balanced scorecard. It looks at the organisation's strategy from four perspectives and puts measures around each. The four perspectives are:
- Financial: How do we look to shareholders? How do we fund ourselves? What financial arrangements do we have with other stakeholders or participants in our value chain?
- Customers: How do customers see us? How can we attract new customers and strengthen our relationships with existing customers?
- Internal process: What must we excel at? What must we get better at? What are we uniquely good at? How do our internal processes differentiate us in the market?
- Innovation and Learning: Can we continue to improve and create value. This can be within the organisation and by reaching beyond its boundaries.
As a final word of caution, before passing your strategic measures straight through into your incentivisation and reward programme, consider the impact on reward on performance. This is outlined in: Incentivisation may harm performance.
Here is another video which explains the Balanced Scorecard in simple steps:
