Strategic Measurements Guide Change and Improvement
By: Jim Clemmer
Jim Clemmer is an international keynote speaker, workshop leader, author, and president of The CLEMMER Group, a North American network of organization, team, and personal improvement consultants based in Kitchener, Ontario, Canada. His other bestsellers include Firing on All Cylinders: The Service/Quality System for High-Powered Corporate Performance, and his most recent book, Growing the Distance: Timeless Principles for Personal, Career, and Family Success. His web site is http://www.clemmer.net/
"Crude measures of the right things are better than precise measures
of the wrong things."
Here are five core measurement areas that provide broad and balanced feedback
loops for assessing and improving organization performance:
The (often annual) improvement cycle starts with the organization's vision,
values, and purpose that form its Context and Focus. These establish the
strategic imperatives or key goals and top priorities. From this, balanced
measurements around the five core areas outlined above are developed. Operating
and improvement teams then use these imperatives and measures in setting
their operating targets and/or improvement objectives.
Measurements could include performance gap analysis for each customer and/or
market segment, external partners (such as distributors and suppliers),
and all your internal partners. This area might also include price/value
perceptions, customer/partner turnover rates, market share measurements,
market perceived quality levels, and competitive benchmarking.
2. Innovation and New Markets
Here you could measure revenues generated from new products, services,
or markets. You might also measure the number of experiments, skunkworks,
and pilots underway.
3. Competencies and Capabilities
These could include process accuracy and effectiveness, cycle times, project
measures, reliability, on-time-performance, cost effectiveness, rework,
error rates, and other non-value added work (using tools such as activity-based
costing), knowledge and skill levels, or productivity levels (such as revenue
per organization or team member).
4. Learning and Improvement
These could include tracking rates of improvement in the other four areas.
You might also do self-assessments or bring in outside experts to examine
the effectiveness of your organization improvement process. Another form
of measurement could include quality audits and supplier certification.
These traditional and historical measures might include profitability,
cash flow, return-on-investment, sales levels, or shareholder value.
Across these five core measurement areas, many measurements and supporting
sub-measures are possible. That complex approach makes sense for some highly
disciplined and measurement-experienced organizations. But the overarching
goal in developing measurement and feedback loops should always be simplicity.
Ideally we want to identify the vital few measures within each area that
have the biggest impact on performance. These come directly from our strategic
imperatives, which in turn grow out of our Focus and Context (vision, values,
A few core measures are then cascaded to all operational and improvement
teams who use them to develop their operating targets and/or improvement
objectives. Once these teams have made changes and improvements, progress
is assessed. This important time of reflection and learning becomes input
to the next turn of the cycle. The process looks like this:
Based on this planning, changes are made and improvements initiated using
process management, systems realignment, experimentation, pilots, and the
like. All the while (and at periodic intervals), management leads their
teams through a series of progress assessments. These learnings are captured,
celebrated, shared, and incorporated in the next year's cycle of strategic
imperatives, core measurements, and so on.