The key to keeping score is to keep it simple. This is especially helpful in tracking organizational performance in a way that may be communicated to stakeholders on a regular (at least quarterly) basis.

It is important that the specific targets you choose for measuring organizational performance reflect the strategic intent of the business. Ideally, these will come directly from your strategic plan and will address three distinct, yet interrelated areas:

• Financial Targets
• Sales & Service Targets
• Strategic Targets

Financial targets are just that. Revenue, profitability, efficiency, and cost control are examples. You may also use value added, EBITDA, and gross profit percentage. It is important to keep these simple, measurable, and easy to understand.

Sales and service targets are next. What do we want to sell and to whom? New products/services to existing customers? Existing products/services to new customers? Customer service goals such as on-time delivery, accounts receivable days, spoilage/unforced errors (especially those identified by the customer), client satisfaction ratings, customer lifetime value are a few. What matters most is that they are measurable and meaningful.

Strategic targets are a bit different. These are goals that are important to accomplish even though they may not yield a tangible outcome in the current year. These are so important to future development that it would not make sense to ignore them when measuring organizational performance.

Examples of strategic targets may include installation and training on a new software system, launching a new marketing effort, testing new product offerings or staff training and development. Since these targets are more qualitative than quantitative, whether and to what extent they are accomplished is a bit subjective. Nevertheless, strategic targets should be included to round out this balanced approach to organizational performance management.

Of course, even the best planning and system for tracking results will not yield much unless team members are aligned and focused on their specific and shared responsibilities, goals and behaviors tied to the organization’s stated values. More on that next time.

For more information on taking your strategy and planning to a higher level, download my free planning primer and workbook at ajstrategy.com/snp or contact me at joe@ajstrategy.com.