Focus on what matters – keep it simple, keep it accountable

Let's get this...

After nearly 30 years in business, and a good chunk of that as a senior exec responsible for P&L delivery, my spiky point of view is that is does not matter what fancy (or simple) measurement system you use.

It doesn’t matter if they are called KPIs or OKRs or Fancy Measurement Dashboard Number Thingies That Will Change Your Life.

What truly matters is that you know WHY you are measuring what you are measuring.

Oh and that you actually do the measuring, regularly. Ah, and that you hold people accountable for the delivery of the objective you are measuring. And, sure, that you also give them the tools to deliver, and you have the right people to deliver… but I digress.

Here’s what I mean with my back-to-basics approach.

I see too often managers and executives look at different performance measurement systems as the end goal rather than what they are supposed to be, which is a tool.

To be clear I don’t “hate” or deride any particular performance management tool (system). Use what makes you happy. I am agnostic about them. What I do care about is whether they HELP take the business forward to the desired goal, and not be a distraction.

These tools are best used to achieve big objectives, such as delivering a certain expected level of performance, be that profit generation/increase, or revenue growth, or cost control, or what have you.

Consequently, where you should spend most of your brainpower is deciding the overarching goal you need to achieve and breaking it down into parts that can be measured. This is important: NOT everything that you can measure needs to be measured. You need to choose the 3-5 most critical ones. This is a significantly more important decision than which system you will use to categorise your data.

Here's what business books often don’t tell you: you can only drive a handful of performance indicators at any one time. Why? Because you can’t improve or grow or reduce everything all at once. When you focus on improving one indicator, there will be others that suffer. If you choose too many to improve all at the same time, you will not get anywhere. When you measure too many things you also provide a safe hiding place for low performance.

People also often make the mistake of making forward-looking business decisions based on lagging