Do you measure up?
We have a problem. We are not wired well for the sustained, organized, separate effort needed to change and grow, to implement our plans, be they strategic or annual.
What I have uncovered on my now six-year deep dive into why we make big decisions poorly and what to do about that huge issue starkly highlights what derails our best intentions in implementing our plans. Here are 11 mental impediments to effective plan implementation:
Impulsivity is our common challenge: We tend to choose the immediately gratifying option at the cost of what might be better for us in the longer term. From responding to the unimportant but immediate text to hanging out on social media to taking the afternoon off on a nice day, we are drawn away from plan execution by shiny objects. Now, know that I am not against taking the afternoon off, so long as your are not doing so because of avoidance conditioning (see next item).
Not executing the sometimes challenging tasks needed for implementing the plan can be a case of avoidance conditioning. That’s how we learn to behave when we become aware of an impending averse situation and seemingly unconsciously adopt an avoidance technique, taking steps to ensure that we do not have to take on the task or do the work, at least when it ought to be done. For example, over-programming meetings can become a subconscious avoidance mechanism, assuring that the often rote and sometimes difficult work of executing the plan does not get done.
We are afflicted by current moment bias: Because we would rather experience pleasure now and defer the pain for later and we have a hard time imagining ourselves in the future, we tend not to alter our behavior for the best long-term outcomes. Rather than keeping our nose to the harder tasks of implementation - making cold calls, anyone? - we tend to take the easy way out and do things that we like to do.
Rather than being proactive, we tend to go with the default option, which is what happens if we do nothing to change course, whether that is the best thing for us to do. It’s just easier to keep running the same old process instead of making the effort to improve it, right?
We tend to practice hyperbolic discounting, meaning we act on our stronger preference for more immediate payoffs ahead of later, larger payoffs, leading to the paradox that we can make choices today that our future selves would prefer that we had not made. We know that updating that database or having the hard talk with an employee or partner who is not meeting the marks will pay off in the future, but we often don’t do it because in the context of now it will be boring or painful.
We tend to be apprehensive of change, which gives rise to status quo bias, in which we make choices that guarantee that things will remain the same, or change as little as possible. Implementing your plan is all about change, the status quo’s enemy.
Status quo bias is magnified by negativity bias, which is our tendency to view the status quo as the point from which any deviations are riskier and less desirable. Status quo is our seeming safe harbor, but to implement our plan we need to sail out of that harbor.
Sailing out of port to do what’s best for us is made harder by the influence of others on our behavior: The social proof heuristic leads us to judge the correctness of what we are doing by the extent to which other people are doing it. Simply, we tend to go with the crowd rather than doing what might be better for us - including intentional execution of our thoughtful plan to improve and grow.
Plan implementation can also fail to be pursued because of inattention blindness, which is the case where an individual does not perceive an unexpected stimulus in plain sight, purely as a result of a lack of attention, either because of too many stimuli at the same time or intense focus on one aspect of the situation. Think if it this way: Plan implementation is the exception from the daily process of answering phone calls, dealing with email, handling customer complaints, etc., etc. Given our daily barrage of stimuli, we just don’t see our plan implementation demands, which will only grow over time if we are to get our plan implemented as we want it and need it to be.
As apposed to being conscious of the need to get at our implementation responsibilities, we are drawn away by salience bias, our tendency to focus on items or information that are more noteworthy while ignoring those that do not grab our attention. We tend to focus on the vivid - the vivid descriptions effect - and the bizarre - the bizarreness effect - which yank us away from the everyday execution needed to effectively implement our plan.
We also fall prey to the planning fallacy, in that we think we can get to plan implementation tasks a little later and still complete them before month-end, quarter-end, or year-end, when, in reality, daily and weekly focused attention over time is needed for effective implementation.
Looking at the list above, it’s amazing we get anything done!
The problem: Poor implementation
The upshot is that of the 50% of organizations that have strategic plans (that’s another problem!), 70% of the plans are either poorly implemented or not implemented at all, according to research by McKinsey, which we further validated in one of our Strategic Business Leader surveys.
So, the big question is, what can we do to help assure that we truly live and implement our well-laid plans for greater success - be they for our organization or for ourselves, professionally and personally?
Never fear, I have a method to improve your execution results, to assure that you are making progress toward your key goals.
A fellow former Association for Strategic Planning (ASP) president and I recently proposed to undertake a potential strategy consulting assignment. The client requested help in developing and using performance measures. As part of our work, I refreshed my understanding of performance measurement and management.
I started by consulting ASP’s Body of Knowledge 2.0, the definitive resource on strategy development and strategic management, which I helped shepherd into existence in my ASP role and which is the basis of my certification as a Strategic Management Professional. ASP’s BOK 2.0 and the other resources my partner and I drew from show the why, what, and how of performance measurement and management, including:
Why to bother measuring performance
The key questions performance measurement answers
What makes a good performance measure
How to set a realistic target for an indicator
Five phases of the performance management process
These topics are fodder for future blog posts.
What the central message for this blog post is….roll the drums….
“What gets measured gets done.”
Peter Drucker, management guru
What I see as essential is for us to recognize that when our performance (or lack of it) is made visible, it will get our attention. (Remember salience bias: We focus on what’s more noteworthy while ignoring those things that do not grab our attention.)
The target drives the task
My not so secret secret for keeping us on task in implementing our plans is to develop performance measures - key indicators showing how we are doing on the most importation aspects of implementing our plan. If we set targets for and regularly update and view these measures, they will direct our attention to the tasks that will drive our performance to the target.
The bottom line: Tracking a set of performance indicators helps you keep in view the key things you need to pay attention to and execute to reach your goals and achieve your vision.
So how do you create your performance measurement system?
You could develop a complex dashboard that shows progress or deviation in all the areas of your business and on all aspects of your plan implementation. But I suggest that, to start, simplicity is called for.
Pick a few
Instead, pick a handful of performance measures that reflect progress in the most important areas of your business. For example. these might be a smaller subset of:
Sales measures, such as number of qualified prospects in the sales pipeline, sales by sales rep, sales by lead source, lead-to-close rate, number of one-on-one sales meetings, customer conversion rate, and customer retention.
Marketing measures, such as customer satisfaction rating, frequency of social media posting, click-through rate on PPC advertising, Google page rank, and marketing return on investment.
Financial measures, such as sales by product or service, customer acquisition cost, level of receivables, profitability, contribution margin, gross profit margin, liquidity ratio, cash levels, and earnings before interest, taxes, and amortization (EBITA).
Product and service measures, such as number of new products/services offered, newly developed features, innovation projects on-time completion, and project delivery time.
Operations measures, such as on-time delivery, Inventory to sales ratio, time to ship, back-order rate, product/service quality, support requests, complaints resolved, response time, and processes documented.
People measures, such as number of referral partners, amount of training, hours worked, headcount, cost to hire, gender ratio, diversity ratio, employee turnover rate, employee satisfaction, and training investment per employee.
In picking key indicators, think about what will be what will be a lagging indicator - showing where your business has been - and what will be a leading indicator - that will tell you where your business is headed. Both types of indicators are valuable, lagging indicators for keeping score and leading indicators for an early warning system. For example, monthly sales is a lagging indicator that shows how successful your sales efforts have been. Number of referrals received is a leading indicator, because the number offers you a clue as to future customer prospects.
Once you have come up with your initial set of performance measures:
Create the formula for calculating the indicator (if one is needed - sometimes a raw number, such as sales of a product, will suffice). For example, to calculate the back-order rate, divide the number of undeliverable orders by the total number of orders and multiply by 100.
Be sure you can come up with the data to compute the indicator. Is acquiring the data easy or burdensome. Will the data be available over time, when you need it?
Figure out the baseline for the indicator. What’s the history for the indicator? Where was it at the start of the measurement period and/or where is it now?
Decide the reporting frequency. How often can and will you refresh the indicator? How often do you want to report it?
Identify who will be responsible. Who will actually collect the data? Who will calculate and report the result? If it is you, you will need to sequester the time necessary for collection, calculation, and reporting on the necessary repetitive schedule.
Determine the target or acceptable level for the indicator. What are you aiming for? What level of performance does your plan for success call for? What number or level is great, meaning things are on or ahead of target? What’s concerning, meaning needs to monitored more closely? What’s bad, meaning demanding immediate attention?
Pick your method for reporting. Will just a set of data on a spreadsheet suffice? How about a highly visible dashboard? Both can work, but a dashboard yells for attention (yet requires more effort to maintain).
Keep your KPIs in view
What’s most important is to keep your key performance indicators in view so you can immediately see progress or deviation.
As noted earlier, we can use our salience bias to focus us on execution and on staying on course. For example, simple color coding plays on this bias. Items in green say all is well. Items in yellow signal caution. Items in red demand our attention.
At the risk of revealing my progress or lack of it as a business coach and strategy consultant, I will use a few elements of my performance measurement system to illustrate what you can do without too much effort..
While I now have 43 indicators (way more than you need to start with!), here are several to show how I do it:
Number of one-on-one meetings with prospects
Target: 4/week, 16/month, 192/year
To date (2/19/2021): 28 in 7 weeks (4/week) ON TARGET
Number of qualified group coaching and accountability prospects
Target: 30 in pipeline (need 10 new clients for year, 33% conversion rate)
At date (2/19/2021): 22 OFF TARGET
Number of new individual coaching clients
Target: 8 new clients for year, 2 per quarter
To date (2/19/2021): 2 ON TARGET
Group coaching and accountability client retention
Target: 80% for the year
To date (2/19/2021): 88% ON TARGET
Number of LinkedIn posts
Target: 2.5/week, 10/month, 120/year
As of date (2/19/2021): 5 OFF TARGET
Frequency of contacts database updates
Target: 0.5/week, 2/month, 24/year
As of date (2/19/2021): 2 BEHIND TARGET
Revenue growth individual coaching
Target: 25%/month, 75%/quarter, 300%/year (net of client turnover)
As of date (2/19/2021): 50% ON TARGET
My measures line up with my strategies. So, for example, here’s what I am measuring for my financial fitness and people strategies, with color coding to show progress or lack of it.
For each strategy, I can easily create a pie chart that gives me a progress picture in a glance. Here’s my current (at the time of writing this) composite branding, marketing, and sales pie chart, rolling up the status of the 16 measures for tracking execution of this strategy:
And, finally, I wrap up all 43 performance measures in a single pie chart, for an overall firm progress indicator chart:
Yes indeed, I have some work to do.
Measure up!
If your indicators are meaningful and relate to what’s important to get you down the road to your goals. then keeping them visible and doing the work to keep them on target and at the desired level will result in more effective and consistent execution.
You will be less likely to be part of the 70% of the herd that is not executing their plans or is doing so poorly.
I encourage you to measure up!
