Insights from Ernst & Young: Measures That Matter

A disconnect between bottom line and long-term goals often results when short-term reporting fails to encompass non-financial measures such as customer retention and quality of management. This is the main idea behind Ernst & Young’s report, Measures That Matter. The report identifies eight key non-financial measures that must be pursued to drive performance over the long term, many of which can be factored into your Objectives & Key Results (OKRs). The full report is a valuable tool all executives should refer to, but for now, we’ve identified the three top non-financial measures which you can use to inform your corporate goal setting practices below.

Quality of Corporate Strategy

Strong organizational performance starts with a high-quality corporate strategy. A powerful company strategy establishes a clear vision for the company’s future and enables the organization to seize opportunities as they arise.

Your strategy is all of your company’s initiatives and the alignment of its resources to produce high performance and optimal business results. Develop a clear strategic plan by answering:

  • What are we? (Mission)
  • What do we want to be? (Vision)
  • How will we get there?

This should factor in your core values, differentiation, objectives, unique value proposition, and any other key elements that will help you achieve your vision.

Management Credibility

Management credibility is the second-most crucial non-financial measure to investors, according to the report. The credibility – and ultimately, the quality – of your management plays a significant role in achieving results. When your teams perceive higher levels of credibility, it supports an increased sense of loyalty. In fact, a 2014 Elsevier study indicated the connection between team member commitment and management credibility is “positive and significant.”

Boost your management credibility by building trust among your teams through tactics like weekly one-on-one check-ins, and be accountable for your actions. You can also earn respect by giving it first, which supports credibility and show teams that you are committed to everyone’s success by creating transparency into how their efforts support top company objectives. Use an aligned goal-setting approach, such as OKRs, to achieve this transparency.

Execution of Corporate Strategy

A powerful corporate strategy is useless if it cannot be executed effectively. To execute the organizational strategy, management must leverage its skills and experience to the highest degree possible, gain commitment among its teams, and align with shareholder interests.

Organizations that effectively identify the measures that matter most, then manage them effectively by continuously monitoring their performance and communicating expectations to teams, will perform best in terms of strategy execution. Nonetheless, connecting strategy to execution continues to be among the greatest challenges for organizations. For this reason, Atiim has created “The One Page Strategy” or “TOPS,” which aligns all of your resources to produce successful performance and results through a clear, specific one-page strategic plan.

What else? Which other non-financial measures described in the report do you consider most important?

Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!


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