High performance businesses are characterized by a clear vision and strategy and the ability to manage strategic goals in a highly efficient manner. More often than not those organizations have realized that management based on financial measures alone are not effective. Financial measures are lagging indicators and often fail to indicate threats and opportunities in a timely manner, nor do they tell what must be done to improve performance.

How should performance measurement systems be designed to make the effectiveness of the business units excel? They must be designed around a few key performance indicators (KPI’s) that truly measure the teams success in reaching the goals set by the corporate strategy.

Ideally a KPI or Strategy Map approach should be integrated on an enterprise level, on all levels, for all organizational units, starting with the executive level. A full enterprise integration of a balanced scorecard solution can be achieved in 7 phases of 3 months each, a total of 21 months, with financial results starting to materialize in the phase 3  The phases are iterative and the process feedback continues to mature the strategy, model and measurements towards a high performing business.

Most corporations can be structured in a 3-level hierarchy for the purpose of performance management: Corporate, Division and Strategic Business Unit.

In an enterprise wide scorecard implementation the project starts with gaining consensus and support from senior management on why the scorecard is being developed., next the senior executive team should identify and agree on the purpose and objective for the project, third obtain clarity and consensus about the strategy.

This is an iterative process and a project coach is needed to structure, plan and guide the process, the content and results is the collective wisdom and vision of the executive team.

A similar pattern are then repeated on each divisional and strategic business units with the only difference that the key performance measure to be defined must roll up to the KPI’s of the corporate level .

A corporate KPI of “Increased Customer Satisfaction” may break down to “Number of Units returned for quality reasons” for Manufacturing, while “Number of minutes a customer is on hold” may be a measurement used by a Customer Support unit.

While many corporations will not embark on a big bang solution for a number of reasons, an approach to implement on a Division-by-Division, or even on the Strategic Business  Unit have proven highly successful.

One of the advantages being the achieving excellent performance becomes advocates for the project and serves to lessen the natural resistance to change in organizations.