How Good Performance Measurement Equals Strategy Implementationby Stacey Barr
There are four things that are vital to strategy execution or implementation, that only come from proper performance measurement.
Robin Speculand is my go-to expert in strategy implementation. He co-leads The Strategy Implementation Institute, which provides training, certification and resources for implementation professionals. Robin’s research into strategy implementation shows it’s potential for improvement:
“Only 7% of respondents believe their organization is excellent in its ability to implement strategy.” – from Bridges 20 Years of Strategy Implementation Research
And the role of measurement in strategy implementation has a long way to improve, too:
“Based on this year’s survey, it is concerning that only 28% of the organizations have an effective measurement system in place for tracking strategy implementation. That is a decline from 2016. Without the right measures in place, leaders do not know whether they’re on the right track and what, if any, corrective action needs to be taken.”
This research has confirmed what we consistently observe in the organisations that come to PuMP for the first time. And also from our experience with the relationship between performance measurement and strategy implementation, we’ve learned that measurement plays four vital roles.
#1 Measurement makes sure goals are worded clearly and measurably.
A strategy that people don’t understand – or have mixed-up interpretations of – can never get implemented, because no-one knows what result they’re supposed to focus on. And that’s what happens when goals are written with weasel words.
In our recent webinars on this topic, we polled our audience and discovered that more than 60% of their organisations don’t even think about the words used to write goals, and only 8% deliberately try to write clear goals:
The way to bring goals into focus, so everyone understands them, is to change the weasel words to language that a 10-year-old can understand. It’s not to dumb-down the goals. It’s to make them clearly say what they meant all along. In PuMP’s Step 2, we use the Measurability Tests to achieve this.
#2 Measurement makes sure goals are cascaded or aligned by cause-and-effect.
The only way that teams throughout the organisation can know what to do to help achieve the strategic goals is to know their own unique way to contribute to them. But giving them a “mini-me” copy of the strategic goals won’t achieve this.
In another poll, our audience shared that the “mini-me” method of cascading is the most commonly used method, followed by cascading actions only, and then followed by no cascading at all:
We need to cascade strategy with cause-effect thinking, not a mini-me duplication, and use a cause-effect map to visualise the cascading. In PuMP’s Step 2, we use the Results Map to achieve this.
#3 Measurement makes sure goals are monitored with result-oriented evidence.
When we’re implementing strategy, we’re implementing change projects. And often, the KPIs that are chosen focus on measuring the progress of tasks and the achievement of milestones. The problem that action-oriented measures create for strategy implementation is that the wrong actions can be implemented well. And the intended results never happen.
We learned, from our polled audience, that only 12% of organisations use mostly result-oriented measures to monitor their strategy:
Good performance measures give us objective truth about the achievement of our strategic goals, which helps us keep strategy execution on track. We’re doing project management when we monitor the implementation of each initiative. But performance management is about monitoring direct evidence of the degree to which each goal is being achieved. And in PuMP’s Step 3, we use deliberate Measure Design to build KPIs from that direct evidence of our goals.
#4 Measurement makes sure the right initiatives are chosen.
A fundamental problem with strategy implementation is that people rush to choose initiatives before choosing performance measures, and before analysing processes to find the root cause of that keep performance back from target. This means that most strategic initiatives fail to improve performance and achieve the strategic goals.
Of our webcast audience, 77% reported that measures are chosen too late in the strategy design process, and initiatives chosen too soon:
First, we need to be clear about the results we need to achieve. Second, we need to decide how we’ll measures those results. Third, we need to know the gap between current and targeted performance for each measure. Only then does it make sense what strategic initiatives are needed. PuMP’s Results Map is also invaluable in clearly and logically linking strategic initiatives to the goals and KPIs they should impact.
Good performance measurement is so much more powerful than most people realise. Proper measurement has an essential and non-negotiable part to play in the achievement of strategy. Measurement is the only objective way to track the achievement of goals over time, and to tell us how well our strategies are working and when to take course-correcting action. If your strategy implementation is failing to achieve your strategic goals, your performance measurement approach is likely cause.
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