ABSTRACT

At the operational level, it is a fundamental expectation that management should measure performance against targets. At the strategic level, trying to set targets and measure success is problematic because strategic objectives do not easily translate into specific measurable outcomes. Operational measures, on which middle managers rely, might be contained within the framework of a corporate plan, but strategy is at a higher level. The analogy of a super-tanker illustrates the point. The ship will have a range of systems with gauges and dials showing everything from engine performance and fuel tank levels to outside temperature, wind speed and current heading. A ship’s captain sitting on the bridge reading through all these dials is not doing his/her job; that should be delegated to the officer of the watch. The captain needs to know where the ship is meant to be heading and judging when and where the next change of direction is due, scanning the horizon for other ships and possible danger. The task is looking for a particular reference point that indicates that the time is right to change heading, reading the state of the sea and glancing at the charts for underwater obstructions. The ship’s operational systems are not brought to the captain’s attention except when there is an issue that could affect the progress of the ship. Chief executives need similarly sparse information with strategic targets and measures of success which are sufficient, appropriate and useful to the strategic direction of the corporation.