Does your strategy keep getting knocked back? Many of the greatest business strategies have failed. All around the world company head offices are littered with strategic masterpieces that are gathering dust on shelves. They cannot be faulted other than they have not been implemented successfully. One of the most troublesome tasks businesses face is to implement meaningful objectives and a good set of key performance indicators.
What is a Key Performance Indicator (KPI)? The clue is in the title. It is the key that indicates good or bad performance. Let’s be clear here, we are talking about business performance not personal performance (although we would be the first to admit one relies on the other). Key performance indicators tell you whether or not your business strategy is succeeding. You don’t need many of them, but they must be aligned to your business goals and objectives. If a key business measure does not relate to what you are trying to do, seriously ask yourself – why do you need that measure at all?
Are you using the right tools? Measuring success is not an ad-hoc activity. Neither is it just something that management does. If all you do is a monthly review based on some historical company process, then you are falling short.You might be doing okay, but you could be doing so much better. The shrewdest business leaders use a recognised business methodology to manage success. They do not rely heavily on financial results but balance the needs of the entire business. Using the Balanced Scorecard methodology has proven its worth for the worlds most successful businesses.
The Balanced Scorecard methodology is a strategic management system. It is not, as many believe, simply a measurement system. It balances company objectives and metrics across financial, customer, process and people/capacity perspectives. In this way, strategy can be managed much more effectively.
