Measure what matters

It seems simple and makes sense but many companies struggle to track and measure their financial and strategic performance.

At the beginning of the year, as you reset your priorities post covid-19, it is imperative that you understand the following:

•          Lead indicators of financial health

•          Key measures that are aligned to your strategic priorities

•          Targets for your key measures

•          Accountabilities for the key metrics

•          Investment required for each metric

•          How each metric feeds into the financials of the company

Having a weekly scorecard that measures your top 10-15 metrics is critical. When metrics are off target having clear accountability for someone to build a plan to address and reset expectations and understand impact on the financials.  

A very simple scorecard is a very useful tool to drive the right focus across the company. If you have too many metrics, you will lose your focus on the ones that are most critical.

Example metrics:

It is important to use a simple format that calls out variances to targets or prior comparative period. See below example.

A weekly / fortnight meeting to walk through metrics with actions and follow ups is critical to driving the right behaviour. Performance reviews and incentives should be aligned with these metrics to drive the desired strategic/financial results.

At the beginning of 2023 make sure you spend time getting this right. If you need help please reach out to us, we have a lot of experience with building metrics scorecards for companies and help drive accountability across the leadership team.

I believe driver trees are critical to determining your key metrics – please check out our recent article on driver trees here.