Eat the dots and watch out for the pesky ghosts! The Pacman game was one of my favourite pastimes in my university years. You score points by navigating through the maze to gobble up dots and bonus fruits, and timing the use of the power pills to swallow the ghosts. The score is instantly tracked by a counter. As you advance to higher levels, repeat the same strategy but at a faster pace.
In business, continual success comes from effective execution of sound strategies. Over the years, numerous research papers have been written about strategy formulation and execution. They focus on the approaches for strategy development and the capabilities to execute. A critical area which does not get much exposure is the monitoring of execution. The mojo of successful strategy execution is in the measurement.
Monitoring involves measuring outcomes delivered by the actions undertaken. The challenge lies with what to measure.
Metrics which are loosely defined do not reflect clearly the outcome the business aims to achieve. Financial metrics, used often as the default, are not necessarily insightful measurements. Intangible, broadly defined corporate objectives such as efficiency, satisfaction, and community engagement are difficult to measure. There are ways, by the way, when you define the evidence of success properly.
On the other hand, meaningful metrics reconcile with the corporate strategy. They are well articulated to reflect success. There is no confusion because the metrics reflect precisely what success looks like. They provide insight on what needs attention, steering timely decisive action. Critical driver activities are monitored. The business is able to be proactive and hence, minimizes negative outcomes.
Consider the following matrix on the relationship between execution and metrics.
For a business which cannot execute work effectively, meaningful metrics help to guide corrective action for improvement (the top right quadrant.) The metrics identify problem areas which the company can act immediately to overcome the issues. In addition to financial outcomes, the business measures critical work that are essential for success.
In the case where execution is effective, having loosely defined metrics can misguide a business (the bottom left quadrant.) The company takes on initiatives which seem to be logical but without metrics that relate specifically to the desired outcomes, it is difficult to assess the effectiveness of the resources deployed. The only way to align effort with result is to establish definitive metrics that are true indicators of success.
When a business is deliberate in defining success and consciously monitors its work using meaningful metrics (top left quadrant), it is able to focus effort on critical work and deliver outstanding performance consistently. The direct correlation of effort with success optimizes the use of resources.
Therefore, monitoring execution using specific, meaningful metrics is important to successful strategy implementation. Proper metrics provide a tool for the assessment of resource deployment, problem diagnosis, and focus for driving targeted results. A perfect strategy, even with excellent execution, might fail if the business measures the wrong things.
Just like playing the Pacman game, there is no score if the player is not able to eat anything. The Pacman can wander around the maze and get cornered by the ghosts. The score counter monitors every move and reports instantly successes in eating dots, fruits and ghosts.