Performance Management

The next step in the process is Defining Your Strategic Metrics.

For each of the strategic objectives identified in the previous step make a list of the most relevant .

For example, if one of your strategic objectives is to increase overall sales by 15% then your potential performance metrics would be focused on new sales, new products, new customers, sales growth with current customers, etc. Next you would like to see these metrics at different “local levels” such as per region, per product, per new product, etc.

If one of your objectives is to cut your operational costs by 10% then your potential performance metrics would be focused on your critical business process drivers such as deliveries, production efficiency, product quality, production , etc.

After you finish the previous three steps you can start measuring your actual performances. Your system is in place and your actual performance results are relevant and they make sense. You are able to measure your business performances.

You are able to identify what are the critical areas for improvement by comparing your actual performances with your target performances.

Net profit, gross margin, brand recognition, market share, growth, customer satisfaction, stock price, etc.