State of the Art Best Practices Report

The Top 12 Strategic Management Mistakes by Corporations

Problem #6 Continued...

Most of the measures are, not only activity measures, but also ONLY for the next year (or even next three months for public firms).  Rather, a three-five year Continuous Improvement Matrix of all the Key Success Measures/Goals should be an essential component of each Strategic Plan.

Organizations need to build on the current measures to a longer-term set of Key Success Measures/Goals out three-five years.  They should include a focus on a balanced set of Quadruple Bottom Line results measures including, not only
(1) Financials, but

(2) Customer satisfaction (absolutely essential to measure),

(3) Employee satisfaction (broader than learning alone) and

(4) Contribution to society (beyond Sarbanes-Oxley alone).

Key operational measures are a fifth measurement area and are extremely important as well.  Most organizations can track one-two daily measures (such as % of hotel rooms occupied) and can project from that pretty well how they are doing financially. So, perhaps there are five areas to measure; just be sure to differentiate between these operational measures and the Key Success Measures/Goals.

One word of caution:  The Balanced Scorecard Concept started with this idea of a balanced set of measures—but it has morphed into a Strategy Map Concept which has tried to become much more than a set of balanced measures, confusing many organizations that think it is a full Strategic Management System when it is not.

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