4 simple metrics that tell you how your business plan is performing.
Now that you’ve created your business plan, how will you measure how well you are executing it?
How will you know if you are progressing to achieve your desired goals?
Performance management is the tool that tries to focus the energies of the organization on the desired outcomes.
The problem is, many people tend to mismanage performance by choosing too many metrics to measure.
And as a result people end up chasing many outcomes with little strategic payoff.
Organizations have data on almost everything, and therefore there is a tendency to measure too much in an effort to have all inclusive measurement.
Too little thought is given to choosing the critical few measures that relate to the success of the strategy.
If 80% of successful strategy execution can be ‘explained’ by measuring 3 outputs or activities, focus on measuring them as opposed to the other 100 that may be related to the strategy but are not critical to in achieving it.
My rule of thumb is to pick 3 or 4 key measures and focus everyone on these.
If your balanced scorecard doesn’t include the following metrics, you’re missing an amazing opportunity to know if you’re on track.
▪️ top line revenue as an expression of how the market is responding to the value you deliver;
▪️ the quality of the service experience as perceived by the customer;
▪️ the number of CRAP activities eliminated to free-up time and resources to take on new initiatives;
▪️ the number of dumb rules removed to make it easier for the customer to engage with your organization.
There are many more metrics that can be used , but these simple ones will show you whether or not your plan is being successfully implemented.
Related: Why Flogging Cheap Prices Is a Terrible Strategy and Should Be Stopped