Don’t try to be SMART…

The SMART acronym is too confusing. People don’t know whether goals should be SMART or whether performance measures should be SMART. They don’t know what “specific” really means (that’s what the S stands for). They aren’t sure if R stands for realistic or relevant. And if A is for achievable then does that mean you can’t have stretch goals?

To write great goals, asking these four questions is all you need:

Question 1: Does everyone share the same understanding of this goal?

It’s a mistake to try to use as few words as possible to write goal statements. That’s because, for whatever reasons, we use very weasely language and end up with motherhood statements that can’t be measured. In my experience, the vast majority of goals are so vague that 7 different people can easily have 13 different interpretations of the same goal. Not good.

Question 2: Can we easily recognise when the goal is happening, through observation?

You can’t measure something that you can’t observe. If you can’t observe it, then you can’t know when it’s happening or when it isn’t happening. If you have a goal like this, then it can’t really be a goal. What’s the point of aiming for something you can’t see or recognise or discern as different in some way from how things are now?

Question 3: Does this goal matter more than all the things we’re not going to measure?

If you’re going to measure something, then it really ought to be something you should, can and will improve. We don’t have enough time to measure everything; it’s distracting to measure something just because it’s easy to; and it’s wasteful to measure something if we really don’t need to take any action on it. Only measure results you want to improve, or results that might not need to be improved but you need to urgently remedy if they do take a turn in the wrong direction.

Question 4: Is the goal about making a difference in the world, or just about doing stuff?

Most of what we measure is action: how much stuff did we do and how much of it did we do on time? If we keep on measuring activity, our attention will stay focused on doing activity. But what we really want is to make our world (or our little part of it) better in some way. That’s why we do the activity, anyway. So make sure your goals are about the results of your activity, so you can then monitor the degree to which you’re making that difference in the world you set out to make.

TAKE ACTION: Ask these four questions of your own current strategic or operational goals. Do your goals pass muster? Remember: it’s never to late too change a goal that isn’t measure-worthy.

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.

Wikipedia explains what weasel words are:

The expression weasel word derives from the egg-eating habits of weasels… An egg that a weasel has sucked will look intact to the casual observer, while actually being empty. Thus, words or claims that turn out to be empty upon analysis are known as “weasel words”. The expression first appeared in Stewart Chaplin’s short story ‘Stained Glass Political Platform’ (published in 1900 in The Century Magazine,… in which they were referred to as “words that suck the life out of the words next to them, just as a weasel sucks the egg and leaves the shell.” Theodore Roosevelt attributed the term to Dave Sewall, claiming that Sewall used the term in a private conversation in 1879…

In the political sphere, this type of language is used to “spin” or alter the public’s perception of an issue. In 1916, Theodore Roosevelt argued that “one of our defects as a nation is a tendency to use … ‘weasel words’; when one ‘weasel word’ is used … after another there is nothing left.”

My first exposure to the term was from Don Watson, an Australian political speech writer and author of many books but two in particular to do with weasel words, “Death Sentence: The Decay of Public Language” and “Watson’s Dictionary of Weasel Words”. Irrespective of the source of the term “weasel words”, its impact is profound in our struggles to find meaningful performance measures to align to our strategy and convince us of its execution and achievement.

Look at any strategic plan, perhaps even your own, and the chances are astronomically high that you’ll see aplenty words like effective, efficient, productive, responsive, sustainable, engaged, quality, flexible, adaptable, well-being, reliable, key, capability, leverage, robust, accountable. That’s just scratching the surface of the glut of empty and inert words that sound important and fail to say to anything at all, or at least speak of anything that can be verified in the real world, or measured.

Here are some more examples of strategies rendered meaningless with weasel words:

• “Provide efficient, unique, unbiased and responsive, high quality support” which is from a military organisation.
• “Strengthen student engagement and learning outcomes by enhancing student support and intervention services”, from a government education department.
• “[We] will be a leader in articulating and characterizing the dynamic system of scholarly communication”, from a library association.

Where you have used weasel words, you must define specifically what you mean by them or accept the fact that you’ll forever struggle to find meaningful ways to measure them. And your strategy will remain open for interpretation and any interpretation will do – this is NOT a recipe for high performance.

TAKING ACTION:
Grab a highlighter pen and your strategic or operational or business plan, and highlight all the weasel words – the words that really say nothing at all about performance results. How can you express what those words are really trying to say, in words that make it easier to understand and measure the results they imply?

The third thing I don’t like about it is this:

CHALLENGE 3: The Balanced Scorecard is not a performance measurement methodology.

How dare I utter such a blasphemous suggestion!

But I truly believe it. The Balanced Scorecard is, in my book, far more a strategy design methodology than a performance measurement methodology. And here’s why: A performance measurement methodology has to go much further than just suggesting how to determine a balanced and cause-effect linked strategy.

A performance measurement methodology has to help you design and implement and use performance measures, too:

1. It has to help you find meaningful measures, particularly when the strategies seem at first to be immeasurable. There are many Balanced Scorecards that are filled with lame, vague measures when they don’t have to be.
2. It has to help you nut out the details of your measures, so they can be implemented as intended. Too many of our performance measures are poor substitutes for what we originally intended them to be, because not enough thought went into the appropriate calculation and data requirements.
3. It has to help you analyse and report your measures so they clearly and engagingly tell the story of actual performance.
4. It has to help you engage people to measure performance willingly and honestly, and as easily as possible so the measures have the best chance of truthfully telling the story of performance.
5. It has to help you validly interpret the quantitative information that the performance measures are providing, so decisions are based on patterns and trends instead of knee-jerk reactions to individual points of data.

The Balanced Scorecard does nothing to help you with these challenges. It isn’t a performance measurement methodology – it’s a strategy design methodology.

But before you think I’m on a one-woman mission to bag the bejesus out of the Balanced Scorecard, let me say this: I don’t advocate you don’t use it, I just want you to be aware of its limitations despite its popularity, and make sure you take from its strengths and compensate for its weaknesses.

TAKING ACTION:
Do you have a step-by-step performance measurement process to populate your Balanced Scorecard with meaningful measures, and then implement and use those measures to execute and achieve the strategy implied by your Balanced Scorecard?

The second thing I don’t like about it is this:

CHALLENGE 2: The Balanced Scorecard perspectives are too limiting.

The four perspectives that comprise the Balanced Scorecard are Financial, Customer, Internal Business Processes, and Learning and Growth. And these four perspectives work in a cause-effect flow, from Learning and Growth up through to the Financial perspective.

The idea is that you design your strategy across these perspectives, and you choose measures (KPIs) aligned to this strategy, and hence you have your Balanced Scorecard.

Do Four Perspectives Developed Over 15 Years Ago Still Apply?

In an age where social responsibility, environmental responsibility and systems thinking are driving much of our thinking about what matters in managing organisational success, I struggle to accept that all that matters in a strategy can fit into the Balanced Scorecard’s four perspectives.

And indeed, in the numerous situations where I’ve seen the Balanced Scorecard used, that’s exactly the way people behave: they try and fit their strategy into it. Alternatively, they create their own perspectives, often around Critical Success Factors that emerged from their business scanning and SWOT analysis.

Alternative Ways To Design A Corporate Strategy.

One model I really like is designing perspectives around key stakeholders (like customers, shareholders/owners, strategic partners, employees, and the community) and their definitions of the value the organisation or company provides them. It’s a great model if social responsibility is important to, at least as much as profit is.

The Performance Prism is one such stakeholder model.

Another model that’s quite common is TBL or Triple Bottom Line, which moves away from profit as sole definition of organisational or company success and brings in a new idea of balance with the People and Planet bottom lines companioning the Profit bottom line.

Perhaps if you apply some systems thinking, examine your internal and external business environments, and take your SWOT analysis seriously, you will see what really matters for your organisation’s or company’s success. And if you then explore how each business process and function impacts those strategic results, you’ll more naturally cascade the strategy.

One More Challenge…

In part three of this series, I’ll discuss the final thing I don’t like about the Balanced Scorecard, and again will suggest some tips for compensating for this challenge.

TAKING ACTION:

In using the Balanced Scorecard, what important results are you ignoring because they don’t fit? What results are you focusing on and measuring, because you think you should have something in each of the four perspectives of the Balanced Scorecard? Let’s continue the discussion, at the Measure Up blog!

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?

They’re not performance measures because they fail a few essential tests of what makes a meaningful performance measure.

1. Milestones are about action, but measures are about results.

Meaningful performance measures track business results, because achievement of business results is what defines performance. Completing a task or activity, such as reaching a milestone, doesn’t define performance. Just think of all the examples in your own business or organisation where projects or initiatives or actions have actually worsened performance! That’s why milestones aren’t meaningful measures.

2. Milestones are hypotheses, not proof.

A milestone is a point in time when a particular project has reached an important stage that indicates it’s progressing as planned. Projects, and their milestones, are our best guesses (hopefully informed guesses) about what’s going to improve business performance. Not all projects succeed in this quest, and that’s because we don’t know what’s going to work until we try it out and learn from it. Milestones need measures to test if they’re working or not. That’s why milestones can’t themselves be meaningful measures.

3. Milestones are too little, too late.

You reach a milestone or you don’t. It’s that simple. If you use milestones as measures, then you’re really saying if we don’t meet it, we’ve failed. But that’s too trivial, and it also drives the wrong behaviour (people fiddling with the project schedule or scope, rather than making sure the project is making the improvements in business performance it was designed to). With continuous feedback that meaningful measures can give us over time, we can easily adjust our projects and activities as and when we learn what works and what doesn’t. That’s why milestones aren’t meaningful measures.

Are you convinced that milestones aren’t measures?

Where ever you have milestones in place of measures, you very likely need to go back to your intended results. What improvement are you trying to achieve? What difference are you trying to make? Why does reaching this milestone matter? Then focus on finding measures to track those results, through time, as feedback on how well your projects (and their milestones) are working in bringing those results into reality.

TAKING ACTION:

Look over your own business or strategic plan and check if you’re using milestones where measures need to be. If you are, a great way to find a meaningful measure is to ask “What result do we want from successfully reaching this milestone?” And then develop a measure for that result.

These effect-isolating methods have been around for donkey’s years, and they’re really quite simple too, but sadly under-used as part of an organisation’s or company’s strategy execution.

Method 1: Before, During, After.

Time series analysis is the simplest and weakest form of isolating the effect of your strategies on their targeted performance results. Other factors can come into play over time also. But at the very least, it really helps to know what level performance is at before you execute your strategy, regularly throughout the process of executing your strategy, and for some time after it’s fully executed.

If you see changes in your performance result that correlate with when you expected to see such changes, and you can rule out other obvious factors, then it’s looking like reasonably good news for your strategy.

Method 2: Controlled Experiments.

No, you won’t need to go buy a lab coat and pocket protector. Controlled experiments are simply designs for how you execute your strategy, where you execute your strategy in one area, but deliberately not in another area. For example, imagine your strategy is a new marketing campaign to encourage people to recycle more of their domestic rubbish. Your measure is the percentage of tonnes of domestic rubbish that is picked up by recycling rubbish trucks.

With a controlled experiment, you’d divide up your rubbish collection zone into two groups, let loose the marketing campaign in just one of these groups, and track your measure for both groups separately. You’re looking for a signficant difference between the two groups after the campaign.

Method 3: Multi-variate Analysis.

You don’t need a 4-year degree in statistics to get this – Microsoft Excel is enough for the basics. In its simplest form, multi-variate analysis is a collection of time series graphs you can visually examine to look at correlations and patterns among a range of factors that affect an outcome.

If you have a new strategy to increase sales revenue, like a customer loyalty program that offers discounts for repeat purchases, how will you know it’s working? Particularly if economic downturn is affecting your industry, your marketing department is launching a new product, you get some fantastic but unplanned media attention, and you’re concerned about several other factors that might confound the impact of your strategy.

If you track and measure that range of factors each month, say – like average industry sales, sales of new product, media mentions/hits, and so on – then you can build a multi-variate analysis using graphs that could highlight the impact of these factors on your outcome: sales revenue.

The Way to Stop Waste

Even if these methods sound like more effort than you’re willing to go to, the truth of the matter is that in relation to the effort you’ll be putting into executing your strategies, they’re a drop in the ocean. And if you don’t use some method of isolating and testing the impact of your strategies, you’re making like an ostrich and burying your head in the sand rather than face the cold hard fact that your strategies could be a complete waste of time and money.

TAKING ACTION:
What’s your next oppotunity to test a strategy to find out if it’s truly working or not? Which method could you use to do this?

How do you translate results so intangible as employee morale or service quality or corporate image into solid, robust measures?

The framework described here is an excerpt of the How-to Kit: How to Design Meaningful Performance Measures, which provides a systematic approach for taking almost all of the pain out of the challenge of finding the right measures.

STEP 1: Begin with the end in mind.

Performance measures are objective comparisons that provide evidence of an important performance outcome. It is of the utmost importance to decide which outcomes are most worth tracking right now. As the first step in deciding how to measure an outcome, write down what the outcome is, what the difference is you are trying to create (and thus want to track using a measure). Focus on one outcome at a time.

STEP 2: Be sensory specific.

When you have the end in mind, you are ready to get a handle on what specifically about your outcome you will measure. This is where you take care in your choice of words to describe the outcome as concretely as possible. Use “sensory” language – the language that describes what you and others would see, hear, feel, do, taste or smell if your outcome was happening now. Avoid those inert words that we so often see in our goal and objective statements, such as: efficient, effective, reliable, sustainable and quality.

STEP 3: Check the bigger picture.

Check the bigger picture for what could happen if you measure your outcome. What level of control do you have over achieving it? What might the unintended consequences of measuring the outcome be (both the positive and the negative)? What behaviour would the measures drive? Which other areas of performance might be sabotaged or limited? This is your first chance to change your mind about what’s most worth measuring.

STEP 4: What’s the evidence?

Now, get ultra specific and figure out what the potential measures are that could let you (and everyone else) know that the outcome is being achieved. For each of your sensory rich statements from step 2, what could you count to tell you the extent to which it is occurring? Which of these potential measures would be the optimal balance between objectivity and feasibility?

STEP 5: Name the measure.

Naming your performance measures marks the point at which you know exactly what you will be measuring. Be succinct and informative and deliberate, as you need to be able to continually and easily identify each measure as it moves through the steps of being brought to life and being used in decision making.

TAKING ACTION:
Create your own measure design template based on these 5 steps (or save time and use mine, which includes examples and more detailed instructions, in the How-to Kit: How to Design Meaningful Performance Measures). Now use your measure design template to start designing measures for the tricky goals and objectives and results and outcomes you’ve struggled to measure thus far. Practice makes perfect!

We have activities, outputs and outcomes. Creatures that seem so much more frightening than they truly are, and mostly because we don’t really understand whether and how we are supposed to measure them.

The truth is, we should measure all three.

But don’t go skipping down the yellow brick road too quickly, measuring every activity, output and outcome you make friends with along the way.

Let’s look first at the relationship between the three, because it’s in that relationship that you’ll find the answer to how to measure them meaningfully.

Outcomes Are Your Ultimate Performance.

Outcomes are important to measure because it’s important that we deliberately define and focus on fulfilling our purpose. Every team should have a purpose, otherwise their talents and energy and the resources they consume are wasted.

The trick with measuring outcomes though, is you have to start with your customer or stakeholder – those people that use your service or product. Only they can define the outcomes that really matter enough to measure.

Outputs Are The Drivers Of Outcome Performance.

Outputs are also important to measure, because they are the drivers of the outcomes. The better your outputs align with your stakeholder outcomes, the better those outcomes will be achieved. It has to be a conscious connection.

Measuring outputs is often easier than outcomes, because unlike outcomes, you can directly see what you are delivering to your customers or stakeholders. And if you can see it, you can measure it. But a word of caution: still take the time to define what those outputs are before you choose measures.

Activities Are The Drivers Of Output Performance.

Activities are also worth measuring, because how well you perform those activities drives the quality of outputs you produce and how well those outputs can create the outcomes your customers and stakeholders want and need.

But the important things to measure about activities are not just how much of them you are doing, but how well you are doing them. And not all activities are worth measuring: only those that have the biggest impact on your outputs and outcomes.

Sketch A Cause-Effect Chain

It’s much easier to visualise and communicate the relationship between activites, outputs and outcomes when you can draw the cause-effect relationships between them. With my clients, I use a tool called a Results Map, but you can use a simple flowchart to get started. And before you can click your heels together three times, you’ll be on your way to a more meaningful balance of performance measures!

YOUR CHALLENGE:
Take a look at a sample of measures your organisation has now, and work out which are tracking activities, which are tracking outputs and which are tracking outcomes. See if there is a sensible cause-effect relationship between them.