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Trying to find the right strategic KPIs can feel like getting lost in a maze, particularly if the strategic plan is not well-structured.

There are many different ways that organisations lay out the structure of their strategy. And this structure has a profound impact on whether the strategic measures or KPIs will be sensible or useful. Or a complete waste of time.

Take this piece from the strategic plan of a municipality:

STRATEGIC PRIORITY AREA:
Transportation and Mobility

OBJECTIVE:
To be a fully-connected and integrated community, the City will undertake initiatives to improve the municipal road network, support the development of transit and increase cycling and pedestrian infrastructure.

RESULT:
Improve local road network.

KEY ACTIVITIES:
Develop the Traffic Management Strategy
Advance Johnson Road from Forest Street to Plantation Street
Coordinate Johnson Road missing link
Advance Extension from Highway 37 to Judgment Road
Deliver Carrington Road Widening

You can see that there are four objects in the structure of this organisation’s strategic plan: strategic priority areas, objectives, results, and key activities. They want to add a fifth object, which is measures (or KPIs). But they aren’t sure which of the first four objects should be measured.

The sad fact is that most strategic plans are not measured, or measured poorly.

A little study I did estimated that only 6% of organisations have meaningful strategic KPIs. Several mistakes are the common causes to this low rate of success in finding meaningful strategic KPIs:

• goals written with weasel words, instead of clear and measurable language
• complex and multi-focus goals, instead of a ruthless prioritisation of what really matters most
• too much focus on actions, instead of a sharp focus on results or impact

We’re not at all helped when we follow advice that is popular but not accurate. The OKRs framework is an example of a popular way to decide what to measure, but it lets us – even encourages us – to make those three mistakes listed above.

The municipality I mentioned above asked me this question: “At the strategic level, would we need performance measures for each key activity?” To measure activities would be a grave mistake.

The mistake to fix first is the focus on activities.

We also call these actions strategic initiatives, change initiatives, key activities or milestones. You might call them something else. But they basically describe the tasks or projects or actions that the organisation assumes will achieve the results they want.

If we measure activities, we just end up with trivial milestones (which are not measures at all). We get information that focuses us on project management, not performance improvement. We need to measure results if we truly do want to manage and improve performance.

So if the municipality just measured their key activities, they’d end up with trivial milestones which aren’t real measures at all. Like these:

• Develop the Traffic Management Strategy, measured by “Completion of the TMS by December 2019”
• Advance Johnson Road from Forest Street to Plantation Street, measured by “Kilometres of road completed”
• Coordinate Johnson Road missing link, measured by “Stakeholder acceptance of missing link proposal”

It’s hard for many people to understand that results are different to activities.

We have to understand this difference as the first step before we’ll ever have meaningful strategic KPIs that convince us we’re making an impact that matters. An impact like better fulfilling our mission, or making our vision reality, or serving our customers better, or improving our governance.

The municipality has made a mistake in how they’ve structured their strategic plan. It’s fine that they have strategic priority areas, which others might call strategic themes or pillars, for example. And it’s fine that they have objectives, which we might also call goals or outcomes. And of course they still need key activities.

The mistake the municipality has made is in their result, which is “improve the local road network”. This is not a result. It’s an umbrella action, or even a project name, that sits above their key activities.

The most meaningful measures come from measuring results.

The clues for what is most meaningful to measure are found in the parts of our strategic plan that describe objectives or goals or outcomes or impacts. Sure, they might need some rewording to become more easily measurable, but that’s where we need to start.

The best way for the municipality to find meaningful strategic KPIs is forget about including the result sections in their plan. They’re not using that section to describe results at all. Instead, they’d get more focus – and better measures – by rewording their objectives so they become measurable results.

As described above, one of their objectives is “To be a fully-connected and integrated community, the City will undertake initiatives to improve the municipal road network, support the development of transit and increase cycling and pedestrian infrastructure.” Before you read on, take a moment to read this, maybe a few times, and see if you can find the result they really want to create…

Find the results implied by or embedded in your goals or objectives.

Just like the mistakes in writing goals that I described above, we will almost always find at least one of them in our goals or objectives. And it means that the words we’ve chosen for those goals or objectives are masking the true meaning. In PuMP, we dig deeper with five Measurability Tests (three of these tests are here), and consequently clarify and improve the wording of goals or objectives.

So, in our municipality’s objective, did you notice how they start with the result they want, then describe the action they’ll take to achieve it? To my mind, the result they want is “to be a fully-connected and integrated community”. But fully-connected and integrated are both weasel words, and need some deeper digging to find the real meaning. Perhaps like this:

• fully-connected might mean that people can more quickly get where ever they want or need to go, and so one measure might be about transit times and a target to reduce them on average
• integrated might mean that people can use any number of modes of transport to get from one node to the node along their journey, and so one measure might be about the average number of transport mode changes or stops required for journeys and a target to reduce that

Or they might mean something completely different. Only the strategic leadership team of the municipality will know the answer to that. But when they define it, they will know exactly what they need to measure about their plan, to arrive at a useful set of strategic KPIs.

A measurable strategic plan has a simple layout of strategic themes, results, measures, targets and then actions.
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If you’d like to start using a very logical, clear and measurable strategic plan structure, try this strategic plan template.