Strategic planning commonly involves establishing a vision and mission for an organization. From there, objectives are determined and sometimes an action plan is created to help achieve the objectives. Unfortunately, many organizations stop there and the plan goes on the shelf with little more than lip service when it comes to execution.
Why do organizations so often drop the ball when it comes to carrying out their most important goals? There are many reasons and, to be sure, achieving change is difficult. The strategic use of metrics can help with this challenge. Some of the ways that metrics can be applied to organizational change include:
1) Dilemma: Everyone is on board with the action plan, but the goals appear to be intangible and it is not clearly understood how they will be achieved.
Metrics force an organization to define what it is that they REALLY want in terms of outcomes and behaviors. There is nothing so difficult that it cannot be measured, although finding the right measures requires special skills.
2) Dilemma: There is organizational resistance to change.
Metrics help an organization to clearly understand "who is on board" and who is not. Reward systems built around clear metrics provide inducement to team members to get on board and disincentives to those who passively or actively resist the change.
3) Dilemma: Everyone is excited about achieving the new goals, but different groups within the organization have different ideas about how to achieve those goals.
Use clear metrics to align your teams together with an agreed upon action plan that focuses everyone's actions on the same goals. Metrics alone will not ensure alignment because there may be many ways to achieve agreed upon measures. In this case, the important thing is to understand that metrics can be deployed at many levels of specificity. You may measure a very low level of specificity by setting a goal of increasing organizational profits, for example. There are virtually infinite ways that teams may work to achieve this goal. If your metrics have very high levels of specificity, however, then tasks are more easily aligned. So, instead of saying that your goal is to increase organizational profits, an organization may say that it will increase sales by 5% by engaging in a Search Engine Marketing campaign with a budget of $50,000. Within this specific goal, there should be a host of metrics such as cost per click, click through ratios, conversion rates, cost per sale, etc. There may be many such specific goals that all support the more general goal.
4) Dilemma: The problem with metrics is that "you might just get what you asked for."
Someone actually told me this at a conference earlier this year. Of course, the powerful thing about metrics is that you might just get what you asked for. Anything that is powerful requires special handling and forethought. If you choose the wrong metrics, you may get the wrong outcomes. For this reason, a rigorous process, complete with risk analysis and feedback from key stakeholders is critical. Also, organizations need to be flexible. If you don't get your metrics right the first time, by all means, come back and adjust them until they are right.
5) Dilemma: Our organization can't get perfect measurement data, so there is no point in measuring anything.
It is true that perfect measurement data is rarely, if ever, available. The goal of using metrics is not to achieve perfect measurement, it is to drive organizational behaviors aligned towards agreed upon outcomes that help to achieve the organization's mission and vision. Your metrics must be chosen carefully so that they not only support the desired outcomes, but so that when compensation is tied to metrics, the system is perceived as being fair and just by those who are participating.
6) Dilemma: Sometimes the cost to collecting the data can exceed the benefit of the behavior that is measured.
An organization should never use data collection methodologies where the cost of collecting the data exceeds the benefit. Organizations are often surprised with just how many metrics they may already have at their fingertips where the cost of collecting them is close to zero. Every organization is experienced with metrics and invests in them. Financial metrics are a requirement and entire teams of people are deployed to collect these metrics so that income statements and balance sheets may be prepared, taxes paid, payroll met, etc. The most expensive metrics to gather are those that are in the past. Transactions need to be researched and reports prepared. It is always easiest and most cost effective if metrics can be built into the day-to-day processes that an organization conducts, so that at the end of each period, the measures are easily available.
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