Over the last couple of weeks, we’ve been writing about the benefits of having an annual strategic plan and how you can create one for your business. Once you’ve developed your strategic plan for the upcoming year, the real work begins in implementing it and keeping track of your progress. This week, we’re sharing some tips on how you can measure business performance and the success of your annual strategic plan.
There’s an old saying in business management, “You can’t manage what you don’t measure.” This means you can’t know if your business is successful unless success is clearly defined and tracked. In your strategic plan, you should clearly define your measurements of success for the upcoming year.
“You can’t manage what you don’t measure.”
If you are using the Objectives & Key Results (OKR) framework we described in our previous post, the key results are the measures of success in achieving your strategic objectives. In addition, the milestones you laid out in your project plans for each OKR are measures of success in achieving those key results. You may even go a step further and define measures of success for each activity in your project plans, so you are clear on what it means for each activity to be completed.
With clear definitions of success, you can track progress as you implement your plans. Tracking doesn’t have to be complicated. It can be as simple as using a spreadsheet to track each objective, its key results, the activities needed to achieve the key results, who is responsible for each activity, the timeline for completing each activity, and what it means for the activity to be complete. Or, you can adopt a technology platform for project management, such as Trello, Basecamp, or Asana. The most important thing is that you have a system that is organized, maintained regularly, and in a central location for you and others on your team to access.
If you are tracking progress, you can regularly review business performance. At the beginning of each quarter, you can go back and grade your objectives based on the previous quarter’s performance. To do this, grade each key result on a scale of 0% to 100% based on your progress towards achieving that key result. And then, calculate the objective’s grade by averaging the grades of its key results. With these grades, and anecdotal evidence on what’s working and what’s not working, you can re-evaluate your objectives and decide if they are still worth pursuing or if you need to change course.
If you’re looking for support on developing a system to measure success for your small business or startup, you may be interested in our Building Operating Capacity module in Oakland.