How to improve the design and execution of strategy
Measure management - Avoiding Aimlessness
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diseases
Likely symptoms of problems
Measures should motivate, yet the measures are not changing what
people do. Managers say, “I can’t see the wood for
the trees”. Staff say, "There are so many measures
I don't know what matters".
Preliminary diagnosis
There are too many measures due to poor measure design. At any
one level, people are confused as to which are really important.
In the end people believe that you can’t satisfy all of
them, so none matter, or they all matter equally lowly.
Two main problems occur, which are symptoms of underlying problems:
This is typically caused by not thinking through the levers of
control and the message that you wish to communicate. Many get
carried away and start thinking about measures and how to measure
before they have decided what to measure. Its seems an easier
conversation: Unfortunately it leads up a blind alley.
Case study
A major retailer used the balanced scorecard to approach help
align the organisation and communicate its strategy through the
organisation. They had access to enormous amounts of timely retail
statistics down to lines in particular shops. However they had
less control over the execution of their major strategic thrusts.
In the process we helped the executive team ensure they were
clear about where the company would go and how it would get there.
This included helping them create a tangible vision of how the
company would look, feel and act in 3 years time.
The new, sharper Balanced Scorecard served two purposes. It provided
the executive team with a much sharper focus on the changes they
were trying to drive through the business. They still looked at
their daily operational measures, but now they were also able
to assess the progress of their strategy and the investments they
were making on a monthly and quarterly basis.
Secondly it galvanised the workforce. It was the basis for cascading
the strategy through the organisation down to the (approx) 2000
shops and other retail channels and the thousands of staff across
the country. Today every shop has a scorecard.
Underlying solutions
Deciding what levers of control you wish to pull. When
executing strategy you have to decide where the points that will
make a difference are. Is it ensuring conformance and the limits
of people's behaviours? Is it ensuring that the processes are
operating correctly? Is it the values and beliefs of the organisation?
Is it a few critical points that will make a major change to the
organisation?
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Decide what should be important. This becomes the focus of attention
and the rest should be come exception reporting. However this
process seems extremely difficult for organisations to get into
and manage. Sometimes its because it becomes a question of delegation,
autonomy and trust. I, as a manager, do not need to worry about
this area - it is yours to manage and I trust you to do that,
reporting to me when things go beyond the limits I have set.
Teasing out the things that are important, from the everyday
that should be managed at another level, is the art of the process.
Good measure design naturally follows this.
Working out why you are measuring, before deciding what to measure
and how. This approach means that if a measure is found to be
inappropriate or not working, you can change it, safe in the knowledge
that the underlying message about why you are measuring is still
there as a reference point. Without this, people have to guess
your intention and end up at best confused, at worst misdirecting
themselves.
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