Without Discipline, Your Metrics are Meaningless
Every major strategic initiative starts with some form of improved outcome in mind. Or at least it should. You wouldn't commit resources (financial and human) to a new initiative without some clear gain in mind. Right? Right. That's why even the most unsophisticated organizations tend to have some form of KPIs in place when they set out on a new journey; whether its a large scale Transformation or a more discreet program or service delivery improvement effort.
So, the problem isn't that organizations lack metrics. The problem is, most organizations fail to effectively manage against specific, well-reasoned outcomes that actually move the needle. That's as bad as not having had any metrics in the first place. Because, if you're not 100% confident about what outcomes you want and / or you don't have a reliable way to measure and manage progress against those outcomes, you can't reasonably expect to meet your goals. Even making basic resource allocation choices becomes difficult in that environment.
If you're not 100% confident about what outcomes you want and / or you don't have a reliable way to measure and manage progress against those outcomes, you can't reasonably expect to meet your goals.
The factors that cause organizations to fall down on this front are fairly consistent organization-to-organization. Specifically, the executives leading both Private and Public sector institutions:
1. Misfire on identifying the right metrics. Ones that cut to the core of the commercial (e.g., revenue, margin, etc.) or operational (i.e., productivity and efficiency) goals they have
2. Create no baseline measures for those metrics. It's hard to establish a target if you can't accurately measure where you're coming from
3. Modify (arbitrarily) the business case / ROI estimates by either increasing the value of desired outcome(s) or reducing the level of resource they're willing to commit to get there. Said differently, their willingness to invest doesn't match their desire to improve
4. Neglect to put the needed accountability and governance systems in place. Ones that assign responsibility for desired gains down through the organization and that then reward / penalize individual(s) contributions towards driving those gains
The good news: these hurdles are all solvable. But the solutions needed to solve them require discipline within the senior leadership team. At a basic level, discipline to pause and take stock of the runway they have available at the beginning of major strategic initiatives. And, as those initiatives advance, discipline to not only measure outcomes but to hold one another accountable. Optimizing performance (not just generating progress) against strategic initiatives is less about having metrics in place and more about the governance system that wraps around them.
Contact us to learn more.
