Metrics Strategic Planning Systems/Processes/Improvement

How to best use metrics, charts and data in planning

In order to successfully evaluate a key process or outcome, it is essential to measure that process or outcome. Through a metric or measure, you can determine if a process is performing up to a needed standard or whether a given strategy is achieving anticipated results. Therefore, today’s influencers in our Who Gave You That Idea series are some “metrics guys” – Robert Kaplan and David Norton, authors of the book The Balanced Scorecard.

In the early 1990’s we already had in place at PGS our strategic planning tool, Vision Navigation® (VN). Our clients came out of a VN process with a full strategic agenda – projects designed to move the organization toward its vision and expand business, alongside projects designed to improve faltering internal processes. Accountability for results was assigned and progress actively tracked monthly. However, we didn’t include in VN a tool to measure the impact of the projects on the organization.

We began working with a new client and familiarizing ourselves with their previous strategies and found ourselves asking, “what was the result?”. In this particular instance, the board had invested large sums of money in the strategy over a 10 year period with no knowledge of whether it was having the intended result. When we pushed rather hard to get that data, we found that there were no successes. This highlighted for us the need to be able to evaluate new strategies early on so that organizations can get off strategies that aren’t performing and add resources to those that are.
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Enter the work of Robert Kaplan and David Norton and their book The Balanced Scorecard. The book encouraged its readers to both execute and evaluate strategy through a system of measures. I encourage you to read it if you have not previously (you can get a copy at Amazon.com). Kaplan and Norton’s Balanced Scorecard approach helped us to fill in our missing piece in Vision Navigation®.

We took Kaplan and Norton’s theory and melded it together with our existing strategic planning tool that we knew had been successful for clients over the years. We added metrics designed for each project to measure the effectiveness of the work.

We then branched beyond the metrics of the VN projects to include measures of the key core processes of the organization – those internal systems that set it apart from the competition and/or are a key selling point for customers. We looked for measures to show how those systems were performing.

Similarly, we added outcome measures – measures that show the end results of the work of the organization. Various financial, customer and employee data are included in the group of outcome measures.

We put all of these measures together – the strategic, core process and outcome measures – to create what we refer to as the organization’s Instrument Panel. Just like the instrument panel of a vehicle, it is this combination of measures that give the truest picture of the organization’s performance.

So what can you do today to put a little of Norton and Kaplan’s push for data into your organization? If you aren’t completely comfortable with using data, we suggest you start small. Begin by identifying one project you are implementing to grow your organization or fix an internal issue. Are you branching into new product lines or new markets? Are you working to reduce waiting time for customers or employee turnover? What measure would tell you how effective your project is in achieving its goal? Once you have identified that measure, answer the following questions and start analyzing the results:

  • Why is the measure important, i.e., what will it tell you that you can’t otherwise see in the organization?
  • What data is needed for the measure?
  • How should the data be displayed (a run chart, bar chart, etc)?
  • How often will the data be plotted?
  • Who is responsible to collect and display the data?
  • Who is responsible to analyze the data and make decisions accordingly?

If you need some help, drop us an e-mail. We would be happy to coach you through the steps to create a metric for your organization. And as always, send us your questions, comments or thoughts – we are interested in what you have to say.

Bill Dann