Measuring Strategy – Where Less is More

You get what you measure – this axiom drives most businesses.  But, when it comes to strategy, too many organizations mismanage this rule.  Over the years, I’ve been involved with companies that take strategic measurement to a point of absurdity.  Measurement becomes a religion, which leads to the establishment of a small army of people to enforce compliance.  The greater the number of objectives, the more policing is required.  It becomes a perpetual motion machine.

Does the following process look familiar?  

•        Corporate sets overall objectives.
•        Business units absorb these objectives to ensure nothing from corporate is left off and adds objectives from their own strategy.
•        Lines of business then append their requirements to the list to ensure their “unique” needs are included.
•         Project and team leads amplify the growing list to address their specific areas.
•         Finally, employees are presented with a master list containing dozens of “strategic” objectives. 

The process is designed to pay homage to the layer above.  Rather than translate and localize relevant objectives (and discard irrelevant ones), new objectives are appended to the growing list. This “me too” approach blocks employees from a clean line of sight to the corporate strategy.  Is it any wonder that employees have difficulty making strategic decisions in their work?

This cascade of objectives is laziness.  If your organization tolerates this approach, then you are choking the life out of your strategy.  Objectives should be progressively simpler and increasingly focused as you descend into the organization.  How can a project lead, software engineer, or customer service representative execute strategic intent, when the list of objectives they are accountable for is lengthy and complex?  Worse, many of these objectives are irrelevant to their jobs, outside of their control, and in some cases, contradictory. 

When it comes to strategic objectives, the rule is ‘less is more’.  Correctly setting objectives allows employees to have a clear line of sight between the work they do and your company’s strategic intent.  It starts with clarity of purpose.  Your employees should be able to identify the most impactful actions that will drive your company success.  For example, at the top, many of the strategic measurements are financial.  How every employee impacts financial performance will differ based on their role.  Increasing revenue may mean that a sales representative focuses on up-selling or account expansion.  An improvement in margins might focus an engineer on operational efficiency to reduce overhead costs.  Simple objectives will have an impact as they multiply across numerous employees.

There are interesting parallels to the medical profession.  Each situation should be treated as being unique.  The tests and measures used to diagnose health must be appropriately matched to the symptoms and desired outcome.  While techniques and tools may offer relief or even a cure, you can’t assume that is true.  You’re less likely to successfully assess the situation if you measure or test something not relevant.  For companies, each strategic diagnosis should be undertaken with the same care and attention you expect when seeking help from a doctor.  If the diagnosis isn’t curable with the tools you have at your disposal, be honest enough to change course or recommend a specialist.  Don’t insist on a particular approach if it isn’t applicable.  ‘Do no harm’ is the mantra.  Insisting on a prescription or treatment may make the situation worse if you’re measuring the wrong thing.  Apply Occam’s razor in your strategy and work toward simplicity.  Here, sophistication is the enemy of progress.

Measuring strategic execution in your company is not an exact science.  Each case will be unique and every situation should be examined and explored with that recognition.  Whether you’re an executive, a corporate strategy lead, or a consultant, the ultimate objective is strategic alignment and positive execution.  Choose measurements that are relevant and applicable.  Less is more.  When you take the time to focus on what matters most to your company, you’ll find you can identify the metrics that matter.

Duane Grove is founder of Connect2Action, a strategy execution specialist at the intersection of employee engagement and executive leadership, igniting innovation as a lever to accelerate your growth.  Follow Duane on Twitter @connect2action and connect with him on LinkedIn, Facebook, and Google+.  Learn more by visiting www.connect2action.com.