Peter Drucker, sometimes called the master of modern management said “you cannot manage what you cannot measure” and this is critical for any business organization. You need to understand the foundations of performance measurement, setting goals and then measuring your success against them. You have to decide what you want to measure based on clear objectives, critical success factors and key performance indicators. Furthermore, then set targets for these measures that you have defined.
Obviously then you have to create a system to be able to collect, report and analyze the performance data and to be able to disseminate it throughout the organization. There are many frameworks and tools that one could use for this purpose. One of them is the very well-known Balanced Scorecard from Kaplan and Norton. Besides measurement, there must also be a common understanding of company performance, otherwise employees and shareholders will not know whether the goals are being achieved or how well or badly a company is performing. Management will not be able to manage organizational resources effectively, as it will be unclear which departments or individuals should be rewarded for their efforts or penalized for underperformance. Every organization therefore requires strategic monitoring systems to assess organizational health and performance. Companies should carefully design such systems to assist them in achieving their visions and goals. On this page, you will find a few resources that could help you with setting measures and to implement them effectively in order to monitor the performance of your business.