In our previous blog, “Mapping Strategy, Measuring Success” we looked at the process for developing your organization’s strategy map or “storyboard” by adopting the balanced scorecard technique. This week we take you a step further and ask what does success look like?

Measuring success within an organization has long been a challenge for business owners as they wrestle with the thoughts of what success truly means in their company. Many organizations settle with focusing on the financial goals and objectives to indicate success, but what about how our customers perceive you? Are you improving upon your internal operations to make them more efficient? and how are you improving your infrastructure (as relates to people, culture and technology) within the organization to drive these desired improvements?

It is commonly agreed among business owners and leadership teams that measuring success through performance measures is important, but without the correct facilitation most struggle to create meaningful measures that align with their strategic objectives and secondly effectively implement them throughout the organization to drive improvements.

As mentioned in our previous blog, the balanced scorecard (BSC) process that Pinnacle takes business owners through, is driven by their vision and the future ambitions of the organization. This takes the organization away from measuring and controlling behaviors to creating high levels of personal accountability that support achievement of company goals and objectives as a whole.

Due to the cause and effect nature of the BSC, when considering how to measure the specific strategic objectives created through this process it is important to consider the “cause and effect” nature in the subsequent measurements through the develop of leading and lagging indicators. For example :

Strategic Objective

Lagging Indicator

Leading indicator

Create Great Customer Service Experience

Customer satisfaction levels

Employee Engagement

Establish sustainable work processes Cost efficiency

High performing processes

By adopting this process with all your strategic objectives you are able to measure both outcomes (lagging indicators) and the driving forces (leading indicators) that are predictors of success. An additional reason business owners see value in developing performance measures in this way is to make it easier to cascade these measures throughout the organization. This ensures alignment of specific departments, business units and individuals to certain objectives, therefore improving accountability and developing an ownership mentality across the organization.

Furthermore, these measures can then be combined to create dashboards to focus leadership team discussions, giving direction for improvements in a timely manner to minimize risk, and used in individual performance agreements to further align employees with a company’s vision.

Over the last 15 years Pinnacle has partnered with hundreds of business owners and management teams to help them look into the future and continuously move forward instead of being lost in the operations of their organization and employees. If this is something you feel your organization would benefit from please contact us on 513 578 6500 and we’ll be happy to discuss the process further.

Next time, we shall discuss the role an organization’s structure plays in managing the measurement of these success indicators and how this enhances accountability throughout an organization.

[1] Kaplan, Robert S. and Norton, David P. Translating Strategy Into Action. 1st ed. Boston, Mass.: Harvard College, 1996. Print.

[2] ISC Lead and Lag Indicators: What are they and what are they not? Online http://fr.slideshare.net. 2010