STRATEGY > Performance Measurement System


Performance Measurement System

The main signs that you may need a new performance measurement system is:

  • Performance is acceptable on all dimensions except profit.
  • Customers don't buy even when prices are competitive.
  • No one notices when performance measurement reports aren't produced.
  • Managers spend significant time debating the meaning of the measures.
  • Share price is lethargic despite solid financial performance.
  • You haven't changed your measures in a long time.
  • You've recently changed your corporate strategy.

Between your strategy and performance measures, you require a set of performance objectives that describe what you must do well in order to execute your strategy. Objective statements are just that - concise statements that describe the specific things you must perform well if you are to successfully implement your strategy. The objectives you create will act as bridge from the high-level strategy to the performance measures that you will use to determine your progress toward overall goals.

When developing your performance objectives, it helps to began each with an action verb: increase, reduce, initiate, develop, lower, improve, become, achieve, and so on. You may have a strategy of operational efficiency translated into the following objectives. We will execute our strategy of operational efficiency by lowering costs, increasing loyalty, reducing rework, and closing skills gaps.



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