Perspectives, Objectives, & Measures

Objectives At the end of the lecture, the participants will be able to: Choose the right perspectives for a Strategy Map Identify the fundamentals in creating strategic objectives Differentiate lead and lagging measures

Scope Choosing Perspectives Creating Performance Objectives Creating Measures

Choosing Perspectives

Choosing Perspectives The choice of perspectives for your Strategy Map and Scorecard should be based on what is necessary to tell the story of your strategy and create a competitive advantage for your organization. Some organizations have even customized their own perspectives. Competitive advantage creates value for the company

Different Perspectives? Financial Customer Internal Process Learning and Growth Businesses Customer Internal Process Learning and Growth Financial Non-Profit Impact Customer Core Process Support Process PGS Core Competencies Internal Process Learning and Growth Resources US ARMY

Remember… Whatever perspectives you choose, it must tell the story of your organization’s strategy

Performance Objectives

Performance Objectives Performance Objectives consist of statements that describe the specific things we must perform well for a successful strategy these are strategic choices that we have made from the many options we have. It addresses gaps that we have to fill to achieve our goal.

Filling the Gaps ? ? ? ? ? ? ? ? PRESENT FUTURE TRANSFORMATION PRESENT FUTURE Goal Goal = Performance Gaps ? ? ? ? ? ? ? Present Performance ? If we are going to state how we will fill the gaps it becomes our objectives.

How do we know what the Gaps are? It may involve using studies, theoretical frameworks, or making hypotheses to determine the cause-and-effect relationships. In the AFP, we frequently use the DOTMPLF framework to guide us in looking for the gaps on issues/problems.

Developing Objectives for Financial How should we appear to our shareholders? For businesses the usual financial objectives would involve profitability or growth For Non-profit Organizations, objectives are more about the effective and efficient use of resources or in increasing the pie.

? ? Government (Operational Level) Customer Reliable Transport More Flights ? ? Internal Process More available spares Learning & Growth Crew Skills Barcoding system Financial Improve Programming

Developing Objectives for Customer How should we appear to our customers? It must be clear Who is your target customer? What is your value proposition? Objectives usually fall under: Operational Excellence (price, convenience, quality) Product Leadership (functionality, brand image) Customer intimacy (solutions offered, driving the customer’s success, relationship)

Value prop: A lethal force A lethal Force/Option Customer: Joint Force (TF, UCs) Value prop: A lethal force Improve Core Capabilities Increase Training Activities Increase PAF Budget

Developing Objectives for Internal Process What process should we excel at? Operations Management Processes relate to the basic, day-to-day routine processes Customer Management Processes understanding and customizing to customer’s needs Innovation Processes something new Regulatory and Social Processes adherence to standards/laws Ex. JRRS, SOPS, Policies

Developing Objectives for Learning & Growth To achieve our vision, how will we sustain our ability to change and improve? Human Capital closing skills gap, training, recruitment, retention, succession plan Information Capital Improve technology infrastructure Leverage technology Increase knowledge management and information sharing Gather, share, and use information effectively Organizational Capital Culture- beliefs and expectations shared by an organization’s members

Creating performance measures

What are Performance Measures? Performance Measures  determines whether we are meeting the objectives and moving toward the successful implementation of the strategy

Leading and Lagging Measures Lagging indicators are output-oriented but hard to improve or influence. They are consequences of actions previously taken. Leading indicators are measures that drive the results in the lagging indicators. They predict performance of lagging indicators.

2010 PH Elections 2016 PH Elections

Examples Objectives Leading indicators Lagging Indicators Improve Physical Fitness -personal time spent for physical activities -attendance to Taebo/Takbo -calories intake PFT results Increase pool of applicants -number of info drives conducted -extent of areas reached for info drive -number of applicants/examinees Enhance knowledge of airmen on PAF doctrines -time spent for reading doctrines -accessibility/availability to PAF doctrines -number of doctrines published -evaluation of airmen’s knowledge (exam, survey)

Performance Measures Scorecard measures should be linked to your strategy quantitative accessible easily understood counterbalanced relevant based on a definition shared by all involved. Performance measures must capture the essence of the goals/objective.

Example Acquire Equipment VS Sustain Equipment Procure/Supply the Equipment Procure and Maintain Equipment Measure the number of Equipment accepted Measure the number of Equipment accepted, OR rate, effectiveness, and future requirements. How do we quantify values? How can we say we have improved on our military values?

Objective in Lag measure/s Lag measure  lead measures Lead Measures  Initiatives Initiatives  activities

Reminders.. Measures should contain a mix of lead and lagging indicators Performance measures requires making difficult choices among a vast number of possible metrics

RECAP Choosing Perspectives Performance Objectives Creating Measures

End of Presentation..