 |
| |
|
Linking Performance to Strategy |
|
| |
The source of frustration for many managers is the failure of the company to implement its overall
business strategy. This is not uncommon because it is difficult for many to see the linkage between the
business strategy that senior level managers establish and the performance expected of employees to
implement it. Carrying out business strategy requires commitment, account¬ability and focus by employees
and a strategic measurement system that links performance to strategy. Employees need to understand the
explicit expecta¬tions required of them and how it interfaces with the business strategy.
By following a 3 step process you can significantly increase your chances of implementing strategy.
- Communicate strategic direction and business strategy.
- Establish a strategic measurement system based on key success factors.
- Create performance agreements between employees and the company.
Typically, a company devises an overall business strategy as part of its strategic planning process.
Included in the strategy is a vision, mission, key success factors and overall company goals. Although
the plan may be well developed it often times fails to be implemented because there is no alignment of
the company's vision, mission, and goals at the departmental and individual levels. Without supporting
goals a strategic plan is doomed to failure. In conjunction with the alignment process there must be a
strategic measurement system, often times called a balanced scorecard, which consists of measuring key
success factors.
Many companies are tracking measurements that have little to do with business strategy and were most
likely convenient measurements that were generated from a transaction processing system installed years ago.
Measuring the right things will change just as your business strategy changes. For ex¬ample, if your
company's vision is to become a technological leader in your industry then it is imperative to establish
the key success factors and perfor¬mance measurements that will help you accomplish it.
Typically there are four broad categories within which to establish measure¬ments:
- Customer perspective e.g. quality and customer satisfaction
- Internal perspective e.g. manufacturing excellence
- Innovation/learning perspective e.g. technological leadership
- Financial perspective e.g. profitability and growth
The strategic measurement system should be focused more on measur¬ing those factors that are caused and
not a result. For maximum effectiveness team and individual performance measurements are estab¬lished
using performance agreements. Performance agreements contain the desired results in terms of short and
long term goals, guidelines within which to operate, identification of the resources available, and a
review process that monitors progress on a regular basis. Performance agreements become part of the
performance appraisal process and tie directly to perfor¬mance based compensation.
Back to Newsletter
|
|
| |
|
|
|
| |
|
Get Started Now! |
|
| |
Contact SPG and we will give you a FREE consultation! Please call us toll free at 1-866-599-0663 or enter your name, email address, phone and topic(s) of interest and we will contact
you soon!
|
|
|
Message from the President |
|
| |
Thank you for visiting our web site. Please contact us with your inquiries and we will respond in a timely manner.
Best regards,
Jim Sauer, President, SPG.
|
|
|
Receive Our Email Newsletter! |
|
| |
Register For SPG's Email Newsletter!
|
|
|
|
