Goals Based Strategic Planning - Part VII (PERFORMANCE MEASUREMENT)

Performance Measurement is vital to the success of organizations. Without accurate performance measurement, an organization cannot judge where it was, where it is, and most importantly, where it is going.

Therefore, performance measurement is a fundamental requirement and an integral part of strategic planning and strategic management.

The performance measurement methodology defined below is a means for providing common measurement criteria throughout the organization. If used appropriately, it provides corporate management with tools and information that will help them manage the organization at a strategic level.

It also provides a means to measure the success of strategic initiatives and their impact in terms of achieving organizational goals and objectives.

The performance measurement methodology accomplishes this by identifying the input, output and outcome measures relevant to achieving the strategic goals and objectives that are defined in the organization’s strategic plan.

The performance measurement methodology further helps management articulate the cause-effect relationship between inputs, outputs and outcomes. This linkage from inputs to outputs to outcomes is called a strategic line-of-sight.

The performance measurement framework can assist management in the following ways:

•It creates a clear strategic line-of-sight that links performance measures to strategic goal and objectives.

•It helps generate relevant measurements that improve organizations strategic decision making

Performance measurement is the use of statistical evidence to measure progress toward SMART organizational goals and objectives. When you get to this step in the strategic planning process, you will develop performance measures for each of the strategic objectives.

Input, Output and Outcome measures should be identified along with current baselines and expected targets. The focus on strategic objectives and the establishment of a line-of-sight is the key to identifying truly strategic measurements.

Therefore, for each measure you need establish the following:

•Type of measure (whether it is an input, output or outcome)

•The tie in to the strategic plan (i.e. what strategic objective and corresponding goal that the measure supports)

•The baseline (current state)

•The target (planned improvement to the baseline by fiscal year)

•The strategic line-of-sight

Author:.

Dr. Uchil is an entrepreneur, business-owner and author embodying almost three decades of management and consulting experience. Prior to founding The Uchil Group and Uchil, LLC, Dr. Uchil spent over eighteen years in a variety of senior management roles at several large consulting organizations. In addition to his PhD in Business Administration Dr. Uchil also holds an MBA in Consulting Operations Management, a BSEE in Electrical Engineering and a Diploma in Electronics and Telecommunicati...

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