What makes a sound strategic planning metric?
A sound strategic planning metric is one that measures whether or not a strategy on your strategic plan is working. Is your project to enhance customer loyalty doing just that? Is your initiative to branch into new markets effective? How do you know? Metrics give you these answers.
Here are some criteria to consider in developing a strategic planning metric:
- Choose to measure the “why” behind a strategy. What is the purpose behind a strategic project on your plan? Is the project serving that purpose? For example, a “why” might be reducing staff turnover, and the strategy chosen to influence turnover is implementing flex time. Your metric would measure staff turnover before flex time and after to assess the impact of your strategic project on the turnover.
- Choose to measure a specific strategy to assess its impact. For example, let’s say you are implementing a new marketing campaign to attract new customers. Choose a measure that can definitively show you whether your marketing campaign is bringing in new customers vs. some other factor such as word of mouth or a more aggressive sales campaign? To do this, choose a metric that isolates out all the other potential reasons for a change in the numbers and gets to the effectiveness of your strategy alone.
- Choose a measure that is cost-effective to produce. For example If you are wanting to measure customer satisfaction through a customer survey, consider the cost to survey your customers on a frequency that will really help you. If it is cost-prohibitive, determine a different, more cost-effective method to assess customer satisfaction.
- Choose a metric with monthly data available. Why monthly? The real value of a metric is in giving you good data to evaluate your strategies early on, so that you know whether you are making a sound investment of time and money. A measure that can be taken every few months or only once a year is too infrequent to take action on.
The bottom line
As an exercise, ask yourself this question, if an investor, shareholder or source of grant funds came to you and asked you to make the case for why the organization should continue a strategy or program you are now investing in, could you answer the question with hard data? If not, then you might consider putting in place metrics to evaluate your strategies.
Questions or thoughts? We would be happy to point you in the right direction to create metrics of your own. Drop us an e-mail to get the ball rolling.