On Our Mind: The Secret Sauce of Successful Plan Implementation

I have been working diligently with my clients the last quarter of this year to assure that they have their strategic business plans in place for the New Year.

Each now has a vision of great success, strategies for getting there, and action steps and strategic initiatives laid out for the next 12 months to move them toward their vision.

You might think with their action plan written, my clients are ready to achieve greater success when January 1 rolls around.

Well, without something else, maybe you can call it the special sauce of execution, the odds are too high that they will not implement their plans or that implementation may peter out after a strong start. Just like so many New Year’s resolutions are abandoned.

In the words of management god Peter Drucker, “What gets managed gets measured.”

Why measure performance?

The goals and objectives of a plan can be longer term, down the road. By tying performance measures to these goals and objectives, you can see progress (or lack of it). These performance measures will keep your focus on what’s most important and make it less like that you and your organization will chase shiny objects less relevant to your future success.

Also, performance measures tied to goals and objectives can show you when you need to change your plan because it is not working. And a set of measures based on the Balanced Scorecard and therefore tied to areas of effort across the organization can help assure that the efforts needed to obtain your ultimate objective, be it revenue and profit or change and impact, are occurring.

Answering key questions

According to the Association for Strategic Planning (2015) Guide to the Strategic Planning and Strategic Management Body of Knowledge, (2nd ed) (ASP BOK 2.0), different types of performance measures can answer these questions:

• How much work is the organization doing? Output measures
• How efficiently is the work being performed? Efficiency measures
• What benefits are being derived from the work? Outcome measures (accomplishments)
• How satisfied are customers with the organization’s products and services? Outcome measures
• How are resources being allocated? Input measures
• How well are initiatives, projects, and programs being managed? Project management measures

How to develop your measures

Different types of performance measures can be used, with the most popular being:

KPIs, key performance indicators, which are significant and quantifiable measures to gauge and compare performance over time for a desired strategic objective or outcome.

OKRs, a performance management tool that increases focus, engagement, alignment and agility. An OKR has an objective - the intended outcome the organization seeks to accomplish in a short period time, often 90 days, as well as key results - what the organization will use to document progress made toward achieving the objective.

Keeping it simple, I encourage my clients to develop a tight set of easily understood and measurable KPIs. Here’s the process for doing this:

1. Brainstorm intended results for the strategic objective.
2. Evaluate each candidate indicator: Will it tell us what we most need to know?
3. Develop a “Composite Index” if necessary. (Example: The Dow Jones Industrial Average is a composite of the performance of individual common stocks meant to gauge the direction of the US stock market.)
4. Document KPI information: The data sources needed and the formula for calculating the KPI.
5. Specify the reporting frequency. Monthly, quarterly, weekly?
6. Set data collection and reporting responsibility.
7. Determine appropriate targets for the KPI.

What’s a good performance measure?

ASP’s BOK 3.0 poses questions that can be used to assess the desirability of a given KPI. They are:

1. Is the indicator valid? Does it measure what it purports to measure?
2. Is the indicator valuable? These first two question are the primary filter for selecting a KPI and the answer to both must be “yes.”
3. Is the indicator easy to track? The data should be readily available.
4. Does it hold the team to an appropriate level of accountability? For example. if the weather cannot be controlled, then holding someone or the team or the organization accountable for the weather makes no sense.
5. Does the indicator communicate a positive message to the team? For example, it would be better to measure customer satisfaction rather than to set up a complaints index.
6. Is it a leading or lagging indicator? A lagging indicator shows the outcome or the score achieved. Sales revenue is a lagging indicator showing the outcome of the marketing and sales process. A leading indicator shows what is likely to happen, whether things are going in the right direction or if prerequisites to success are in place. The number of qualified leads is a leading indicator of the results of the sales and marketing process, that is, sales.

Set a realistic target

Setting the target for a KPI is as much an art as it is a science. A wildly optimistic target highly unlikely to be obtained can lead to disappointment and disengagement. A “business as usual” target can foster, well, business as usual rather than the change needed for greater success. Without other requirements in place - such as a level of quality that must be achieved according to regulation - I encourage my clients to set aspirational, stretch targets that under favorable circumstances potentially can be achieved.

Here’s the process for setting a target:

1. Determine the baseline, “Where we are now.” This is the organization’s performance level in the most recent period.
2. If available, identify an external benchmark. This is “the norm,” a third-party comparison point on performance, e.g. industry standard, peer comparison.
3. Set the desired direction: Up? Down? A lot or a little? Maintain?
4. Using the baseline, benchmark, and desired direction, set the target.
5. Determine how to show the result, e.g., numerical change or percentage change?

Manage performance

Together, a set of KPIs offer a performance management system. Think of it as the dashboard in your car. You can see where you are going, how quickly you are getting there, how well your vehicle is running, your fuel level, and much more. When you go through these steps you will have that performance management system in place:

1. Describe each desired outcome or objective.
2. Describe the most appropriate measure(s) or indicators for each that capture the outcomes either directly (if possible) or indirectly (if necessary).
3. Describe the desired levels of performance (targets and thresholds), engaging in benchmarking when appropriate.
4. Collect, evaluate, and report your performance data.
5. Transform performance data into performance information in easy-to-understand formats for everyone in the organization who needs it to better inform decision making, using benchmarking information to help drive continuous improvement. This can literally be a performance dashboard (which apps such as Dash This can help you set up and maintain) or something as simple as color coded Excel charts showing the progress for each measure.

Resolve to perform in the New Year

This my New Year’s wish for you: That you do a great job of implementing your plan for greater success in 2024 using the secret sauce of performance measurement and performance management.