Why is a strategy checklist important? Imagine a friend saying to you “Can you pop out to the hardware store and buy a tool for me?”.
Obviously your first question would be “What kind of tool are you looking for?”
Deciding on your measures and KPIs without having a clear strategy is exactly like going tool shopping without knowing what it is that you are trying to achieve or what tool you need.
It’s also equally strange to let someone else decide what tools you might need (so called “off the shelf KPIs”). Imagine being told by a complete stranger that “the hammer is the most useful tool a manager can buy”. If your issue is nail-related then she may have a point. If you have a wood-size issue then you may have a pretty compelling argument that the saw is the king of the tool kit. Without a clear picture of what you are trying to achieve, any debates about the relative merits of KPIs and measures becomes completely unstructured and pointless.
Being clear on what you are trying to achieve through measurement is 100% essential and unavoidable. If you skip this crucial step you are very unlikely to end up where you need to be by accident.
The next step, after nailing down your strategy is to break this down into a little bit more detail. This next level are what we call strategic objectives, or long-term organisational goals.
Here’s a simple example. If my personal strategy is to “Be the first person that a UK FTSE 100 Financial Services senior manager contacts when they need KPI and measurement help” then my strategic objectives might be:
• Become the most popular UK author on KPIs and measurement.
• Develop a highly visible and visited online and social media presence.
• Deliver 2 or more KPI specific projects to FTSE 100 UK firms each year
Even though I’ve not put many specific measurable targets in there, they are quite specific without being too narrow. Watch out for wooly objectives, with words like “excellence”, “aspire” ,”fantastic”, “best in breed” and “great”, as you will end up having endless debate about what “brilliant” in fact means. It’s far better to start with a bit of clarity. If you are saddled with poorly worded strategic objectives then you have some work to do to make them clearer and more specific.
A good indicator that you are at the right level of detail is the number of strategic objectives. You should expect to have between 3 and 7. Fewer than three and you are probably not breaking your strategy down enough, more than 7 and you risk confusing people
This article isn’t intended to help you develop your strategy, there are lots of excellent books to help you do this. What is crucial is that the strategy is fit for the job intended.
Now hopefully your organisation has a clear strategy, broken down into objectives in a readily accessible form. If it has then you need to get hold of it and read it a few times. Once you have done that here’s a quick checklist that will show whether it’s going to do the job for us:
- Is the strategy written down?
- Does the strategy make sense to an intelligent, but non-specialist, reader?
- Is there broad management consensus that the strategy is correct?
- Is your strategy relevant to the key decision makers in the business?
- Is your strategy is linked to clear and specific strategic objectives?
- Are the strategic objectives physically accessible by all the managers within the organisation?
- Are the strategic objectives broad and non “dated” (rather than simply being important actions that will be completed at some point)?
- Are the management across the organisation familiar with the strategic objectives, without scrambling onto the intranet or looking for bits of paper?
- Are the key decision makers either working to the strategy or attempting to work to the strategy?
- Are there fewer than 7 strategic objectives?
If the answer to the questions above is “yes” then you should be in a good position to start developing your measures. If any of your answers is “no” then much of your hard work could be undone if you start to create measures without fixing the problems with your strategy.
The very first workshop I ran after setting up Made to Measure KPIs, to create measures for a large not-for-profit, rapidly identified that there was no clear strategy for that organisation. Instead of developing a working set of measures, as planned, we ended up doing lots of case studies.
I learned early on, no strategy = no meaningful measures.
A clear strategy that creates an aligned set of measures will mean that most of the people in the organisation are pushing in the same direction at the same time. A badly designed set of measures and KPIs will mean that alignment and collaboration is likely to be random and poorly controlled.
Just to underline this point, I worked with a financial services firm that felt the “error rate” in their process was strategically important. They created a scorecard that focussed almost entirely on the “right first time” rate and linked it directly with their staff’s personal bonus. If they hit 99.9% quality they would get their bonus. Funnily enough, almost everyone got their accuracy bonus but complaints trebled in two years.