Performance management – the measurement trap (part 1)
2 July 2021
The Measurement Trap in Strategic Performance Management
Performance measures are vital aspects of our organizations and performance management. To go with the words of the fifth century B.C. philosopher Philolaus – without measures we can understand nothing and know nothing. Once organizations have defined and clarified their strategy, measures can be used to gauge performance in comparison to, for example, their expectations, targets or competitors. Measures enable us to define future goals like a certain market share or shareholder value, and they should help us understand whether we are on the right track towards delivering our strategy. Indicators should allow us to challenge our business assumptions and provide us with insights that will guide our everyday decision making. Without indicators we can’t assess our success, we don’t know whether our assumptions or decisions were correct, and we don’t see whether we are moving into the right direction.
However, this is not what happens when most organizations implement performance management. What we see is often a very narrow use of measurement. Common reality is that there are too many metrics, no one knows why they are being collected, and most people agree that the measures that are used are not measuring what they are supposed to measure or what really matters. Organizations have become obsessed with measuring everything that walks and moves but often fail to measure what really matters. In many cases measurement has become an administrative burden where we spend a lot of our time collecting and reporting metrics, which we know is of little or no value. As a consequence, few strategic insights are extracted from the measures we collect and little or no learning takes place.
Related Articles
The 7 Most Successful Business Models Of The Digital Era
The first two decades of this century are characterized by digital entrepreneurs upending traditional business models in search of new ways of creating revenue and serving customers.[...]
How To Drive Corporate Innovation And Outpace Startups
Startups are often considered the natural wellspring of industrial innovation.[...]
What Tech Trends Should Companies Focus on in 2023? Here Are Three to Consider (And One to Ignore)
It’s common to hear it said that today, in order to thrive, every business needs to become a tech business.[...]
Bringing Real-Time AI To The Core Of Your Business
Artificial intelligence (AI) is big news right now thanks to a wave of viral applications such as ChatGPT and Dall-E, which have captured the public’s imagination.[...]
The Future Of Work: Are Traditional Degrees Still Worthwhile?
Jobs and the world of work are changing. This raises one very important question: As many roles become increasingly focused on specialized skills and on-the-job experience, are traditional degrees still valuable to employers?[...]
The Real Reasons For Big Tech Layoffs At Google, Microsoft, Meta, and Amazon
Between them, some of the world’s biggest tech companies have collectively laid off more than 150,000 workers in recent months.[...]
Stay up-to-date
- Get updates straight to your inbox
- Join my 1 million newsletter subscribers
- Never miss any new content
Social Media