And if that’s not bad enough, they use terminology in a confusing way, like when the term “KPI” is used to mean something more like a goal or objective, rather than a true performance measure. Or they ignore the entire concept of measures or measurability.

So how can you create a strategic plan that is results-oriented, that spends far more time on your person than it does on your shelf, and that means as much to you as navigational charts are to a ship’s captain, or maps are to a rally car driver’s navigator?

It doesn’t have to be complex, glossy or an inch thick. All the better, it can be a single page. And on that page, over and above the standard vision-mission-values stuff, there are 5 essential elements for a results-oriented and dust-repellent strategy:

Column 1: Key Result Areas

Key Result Areas give some structure or ‘chunking’ to your strategic plan, as well as a framework for completeness or balance. You could use the Balanced Scorecard perspectives, the Triple Bottom Line, or any other strategic model that takes your fancy. Irrespective, aim to have only 3 to 5 areas of focus because if you make it more complex, there are just more places for dust to gather.

Column 2: Results

Results aren’t goals or objectives. They are clear statements of the outcomes or differences that are most important to make happen, in each Key Result Area. Make them vivid, so reading the words invokes clear images of what it looks like when they’re happening. Be ruthless, so you are only ever focused on what matters most of all, and only ever have a manageable number of priorities to achieve.

Column 3: Measures or KPIs

I mean measures as in evidence, not measures as in “we are taking measures to fix this”. Measures are usually quantitative values that you track regularly through time, that tell you how well you’re achieving your results (in column 2). Each result only needs one or two measures, typically.

Column 4: Targets

Targets are numerical values that describe where you want your measure to be at a particular point in the future. Include for each performance measure a time-anchored target and then you have all the ingredients for a true goal or objective statement: a result (column 2) + a measure (column 3) + a target + a timeframe.

Column 5: Improvement Initiatives

These are the projects, investments and opportunities you’re choosing to make the changes in your business processes which will bring about the results you want (in column 2). To know how well these improvement initiatives are working, you’ll simply look at the measures you chose (in column 3) and see if their actual values are getting closer to the target values (column 4).

Many people confuse the initiatives with measures. They’re not the same thing.

What To Do With Your Strategic Plan on a Page

Carry it around with you. Read it everyday. Refresh it as you achieve your targets and results. Adjust it as you discover which improvement initiatives are working and which aren’t. Add project plans for the improvement initiatives, so you know what to do to achieve your Strategic Plan. Celebrate when you do make exciting progress.

Your Strategic Plan on a Page is your map to success.

TAKE ACTION:
Download my Strategic Plan on a Page Template now, and use it to check your existing strategic or operational plan has the essential elements of dust-repellency, or adapt it as your new strategic or operational plan template.

Certainly, on account of the Balanced Scorecard, we’re now seeing the measurement of non-financial results rather than just the financial, and we’re seeing strategies laid out in logical and cause-effect linked plans designed for execution rather than shelving.

But a few challenges continue to baffle those that embrace the Balanced Scorecard way. One of the challenges is easy and quick to remedy within the current Balanced Scorecard theory. But the other two, I believe, require a more radical re-think.

In this first part of a three part series, we’ll look at one of those challenges that does indeed need a more radical re-think.

CHALLENGE 1: The Balanced Scorecard is hard to cascade meaningfully.

You might argue with me on this point, because part of the Balanced Scorecard’s claim to fame is it’s focus on strategy execution and cascading strategy to operational levels. But those famous four perspectives that were the revelation of this framework are also the limitation on meaningfully cascading strategy.

What Happens Is “Mini-me” Syndrome.

I call it the “Mini-me” syndrome (inspired by the Austin Powers movies), where what ends up being cascaded are localised scaled-down copies of the corporate scorecard. Each department or team has the same perspectives as the corporate scorecard, almost the same strategy map, but tailored to the scope of their work.

If injury reduction is in the corporate scorecard, then every department and team has injury reduction in their scorecard: even those departments where injury risk is infinitesimal. If cost reduction is in the corporate scorecard, then every department or team has cost reduction in their scorecard: even those departments (like Human Resources or Process Improvement, whose costs must increase in order for other areas’ costs to decrease.

That’s not true cause-effect thinking, and it leaves many managers and employees bemused and cynical about having to measure things that don’t really matter to them, and that don’t really focus on their specific and unique contribution to the corporate direction.

Additive Thinking Is Not Cause-Effect Thinking.

When the focus is on maintaining the four perspectives in everyone’s scorecard to link up to the corporate scorecard, the attention has moved away from where it needs to be: focusing on the performance results and process improvements that have the highest leverage to achieve the corporate strategy.

What happens instead is a collection of additive scorecards, where you can add up or combine the metrics from scorecards across the departmental tier, and end up with the values for the corporate scorecard. Likewise, you could add up the add up or combine the metrics from scorecards across teams within a department, and end up with the values for the departmental scorecard. This isn’t cause-effect thinking. It’s additive thinking.

Cascade True Cause-Effect, Not The Scorecard.

To apply true cause-effect thinking, we have to let go of structure. We have to openly explore and analyse how the performance of a part truly does impact on the performance of the whole. The four perspectives of the Balanced Scorecard don’t encourage that open exploration and analysis, and that’s why we have the Mini-me problem.

I haven’t found a sensible and easy way to help departments and teams cascade the Balanced Scorecard in a way that’s sensible for them and truly aligned to the corporate direction. Instead, we use a more open approach called Results Mapping, which encourages them to start with a conversation about the corporate direction (or scorecard) and explore the question “How and where do our results and our processes most impact on the corporate direction?”

Two More Challenges…

In parts two and three of this series, I’ll discuss two more things I don’t like about the Balanced Scorecard, and suggest some tips for compensating for these challenges also.

TAKING ACTION:

Where are you trying to cascade the Balanced Scorecard? Is it making sense to the teams it is cascading to? Is there anything in their scorecard that isn’t really that important, or anything missing that actually is important? What questions are you asking to guide the way that strategy is cascaded in your organisation or company?

By understanding how measures are related to one another, you increase their power to help you understand and diagnose performance, and thus how you can report those measures together to make performance understanding and diagnosis easier.

RELATIONSHIP TYPE 1: Cause-Effect

As the most commonly talked about relationship between measures or KPIs, the cause-effect relationship isn’t too hard to understand. It simply means that when one measure improves or deteriorates in performance, it causes another measure to improve or deteriorate in performance as a consequence.

For example, reducing rework can cause costs to reduce; improving recruitment of talent can cause workforce capability to improve; if employee engagement slides then it can cause customer satisfaction to slide too.

RELATIONSHIP TYPE 2: Companion

Measures have a companion relationship when they each tell a part of a complete story of performance. If you relied on just one of the measures, you wouldn’t have a full enough picture to take the best action.

For example, number of new prosects and prospect conversion rate are companions to track a marketing process; customer lifetime value and number of active customers are companions to understand drivers of profit.

RELATIONSHIP TYPE 3: Conflict

Because you can’t have your cake and eat it too, you often can’t maximise the performance of any one measure. Other measures of performance can pay the price, and that’s where you get conflict relationships between measures.

For example, improving workplace safety can conflict with on-time delivery to customers; reducing call handling time (in a call centre) can conflict with first call resolution; improving product quality can conflict with cost reduction.

TAKING ACTION:
Look at one of your organisation’s performance reports, and the suite of measures or KPIs it includes. How are these measures related to one another? Does this appreciation of the relationships suggest any opportunities to improve the way your report the measures, so they are more useful?

REASON 1: Strategy is easier to communicate and cascade.

Todd is a CEO of a not-for-profit organisation. And one of the reasons why he supports performance measurement is that it helped him to clearly define what success meant for this organisation. Measuring success makes it far easier to communicate, and have people understand, the organisation’s strategy and purpose.

REASON 2: Feeling a sense of control over the destiny of the organisation or company.

Rod is a CEO of a mid-sized company, and in his own words, performance measurement is important to him because he wants to take his company’s destiny into his own hands. Measuring and tracking success helps leaders to feel in control – and sleep soundly at night because they know what’s going on and how they’re addressing it.

REASON 3: Stronger cohesion and clarity among their management team.

Paul is a Managing Director of a mid-sized company, and one of his strongest reasons for supporting (and championing) performance measurement was the power it gave him to build cohesiveness and clarity among his team of General Managers. Developing measures of success together, he saw how easy it was to check the level of shared understanding of goals and priorities, and each of his executive’s roles in executing these within their own departments.

REASON 4: Easier for them to manage upwards.

Col is a CEO of a government owned organisation, and one of his reasons for supporting performance measurement in his organisation was that it makes it much easier to give his Board of Directors confidence that the direction is clear, and progress is really being made. Using measures to communicate clear direction and progress is far easier than reacting to every question or concern the Board has, when they have no objective feedback about priorities or progress.

REASON 5: Improving their own career prospects.

Peter, the manager of a procurement department, was able to demonstrate his management capability through achievement of some very aggressive performance targets. He was able to save the organisation $40M in a couple of years, and objectively demonstrate this saving, by diligently measuring and tracking his procurement strategy. This looks great on any manager’s resume when they’re applying for a senior executive position.

The point is that if you want your manager or executive to support performance measurement, to give time and resources to doing it and doing it well, telling them about Balanced Scorecards or dashboards or mantras like “you can’t manage what you don’t measure” simply won’t work. You must frame the benefits of measuring what matters, which mean something to *them*, rather than trying to sell them the features.

TAKING ACTION:
Which of these reasons do you think would resonate most with your managers and executives? How can you start talking about performance measurement differently, so you’re emphasising the benefits they care about, rather than the features you care about?

Here are 5 practical steps to help your team to measure in way that will encourage collaboration to improve corporate performance, and help put an end to measures that trigger fights about who’s right and who’s wrong, rather than dialogue about how to achieve shared goals.

STEP #1: Forget about measuring individual people’s performance. You read it right. And yes, I know it’s common practice in many organisations to do this. They believe that organisational performance is the sum of individual people’s performance. But take a closer look at those organisations and you’ll see that people will be doing all they can to get good personal performance reviews at the expense of what’s best for their team or the organisation.

STEP #2: Make regular time each week for the team to talk about shared goals. These might be part of your existing team meetings, or you could create a quick and easy stand-up meeting to check on progress of a goal, or discuss the meaning of a new goal, or explore ideas to achieve a goal more collaboratively.

STEP #3: Never blame people for performance shortfalls – always look to the process for clues about how to improve performance. Blame threatens the dignity of the people it is thrown at, and that takes personal power away from those people. If we seriously want people engaged in improving performance, they need to feel more empowered, not more disempowered. The majority of people want to do a good job, so make it easy for them!

STEP #4: Reward people for using measures to improve performance, for looking for causes of performance shortfalls, finding potential solutions to improve performance, for learning from their performance-improving experiments. And one of the best rewards is public recognition and celebration of what they’ve achieved. Encourage a culture of tracking, testing and tuning together.

STEP #5: Invite and encourage people to work together to design new and more meaningful measures for the goals they share. Creating new measures through discussion helps people converge on the same understanding of the goals they share, and helps them understand each others’ points of view about those goals. With a democratic process to decide what to measure, the resulting buy-in will help the measures be used for collaboration, not competition.

TAKING ACTION:
Think of a team in your organisation where more performance improvement collaboration is needed. Which of the above 5 steps do you think will help them the most? Is there an opportunity for you to talk to them about this step, or to suggest how they can make some constructive progress toward better performance?

Consider safety. If reducing lost time injuries is a corporate goal, imagine what it would be like if everyone had to measure lost time injuries. What sense would that make? Does everyone in the organisation have the same impact on or exposure to lost time injuries? Is it the best use of everyone’s time to work to improve safety? Of course not.

Rather than over-simplifying the KPI cascading process, follow these four keys to make sure that what gets measured at the individual level is meaningful to the individual at the same time as having a strong “line of sight” to corporate goals:

Key #1: Don’t cascade by duplicating the measure, cascade by building the cause-effect chain.

If a corporate goal is loyal customers, then ask “what makes customers loyal?” to determine the first level of cascading. You might end up with things like attracting more ideal customers, keeping promises to customers, and solving customers real problems. Cascade to the next level (say, teams), ask “what makes it possible to attract more ideal customers?”. Keep this line of questioning until you reach individuals and their contribution to the cause-effect chain.

Key #2: Only cascade to where it counts, to where there is highest leverage to achieve the corporate goal.

Only a few parts of the organisation will truly have a worthwhile impact on a corporate goal. Operations generally has the biggest impact on safety and timely delivery, for example. Marketing generally has the biggest impact on which customers you attract. Keep asking “where is the greatest leverage?”

Key #3: Document the cascading cause-effect links, to build a map or story of the organisation’s strategy.

It will make it easier to test the logic of cause-effect, and to communicate throughout the organisation what matters and why. Maps bring everything together, so you can see the whole, not just the parts. And you can start seeing something more than the cascading – you can see the collaboration!

Key #4: Involve people in the process of determining their “line of sight” to corporate goals.

We find the most meaning in things we take part in discovering and creating. People throughout your organisation will not only have the best idea of how they contribute to company goals, but they will also have many times better buy-in if they take part in the cascading process.