Companies that consistently show excellent results have certain things in common. Among the commonalities is having a sound business strategy which is well communicated throughout the organization, along with clear measures for success.

Most people have heard the phrase, “What gets measured gets done”; however, more than that, organizational excellence comes from having clear world-class performance measures that are consistently achieved.

Just as everything we do should have a purpose, so should our measurements. Key objectives should include improving organizational performance, ensuring consistency in product or customer service, and developing an effective link between the organization’s strategy and its core processes.

In essence, if we are going to achieve organizational excellence, we must measure the things that are meaningful and do so accurately. Key principles of measurements should include measuring the right things and measuring the right things right but also to use these measurements as a start to strategic planning.

Measuring the right things means understanding what differentiates you and what brings you, and your customers, strategic value. Measuring the right things focuses on core processes, strategic value, and competitive advantage – all of which relate to performance excellence.

Measuring the right things extends to ensuring that processes run in-control both from a quantitative and qualitative perspective. The focus should be on measuring things that customers value, not just things that are easily counted – this is why the core business processes should be the starting point toward performance excellence.

Measurement should be considered a science which is why the organization’s decision makers should involve their quality professionals. These people have a great perspective to help leaders select and manage the right measurements.

It is important to understand not only what you need to measure but how to do so. The first step is to understand the purpose of the measure and how it will be applied.

Measurement of some things, such as financial numbers, is fairly clear in the sense that standard calculations exist. The approach to measurement is not quite so clear, however, when it comes to processes where there is both a quantitative and qualitative component. We need to make sure the measurement system reflects what is important to your business and customers so be sure to include leading versus lagging indicators as well as those which are value generators.

Leading indicators are predictive and especially valuable from a tactical point of view. You can quickly make changes to strategy from the information. Types of leading indicators often cited are business retention and repeat sales, which provide a predictive assessment of current business results.

Lagging indicators reveal what has happened in the past and, although they are important, they may be less actionable. Examples of lagging indicators include error rates, employee surveys, and customer surveys. Lagging indicators can be useful in planning and process improvement.

Measuring the right things right means paying attention to value generators. Since there are many ways to measure any given system or process, the challenge is to find an approach to measurement that delivers and generates value to the organization. In general, however, you are not measuring a process correctly if the information derived does not create value.

Measurement should drive outcomes and create excellence. To be best-in-class you need to be operationally effective with a competitive advantage.

To accomplish this, you need to benchmark your financial and operational performance. Knowing how you compare to the competition and then delivering greater value in the eyes of your customers translates into a competitive advantage. If you don’t monitor your performance with good measures, you cannot be best-in-class.

Organizations that repeatedly demonstrate excellence not only are good strategic planners but actually build their planning process using metrics-driven strategies throughout the organization. This enables engagement of all employees in the process.

Organizational leaders need to link measurements to core processes to deliver a strategic advantage. For example, if your employees deliver your strategic advantage, then look at employee engagement as a key process.

So…the organizational strategic planning process becomes a critical activity. For example, whatever your value statements are, break them down into concrete measures, and then push them down to the unit level planning process.

As an organization begins the journey toward performance excellence through measuring the right things, there is a small list of key considerations: no measure should be viewed in isolation, good measurement needs to be ingrained and supported throughout the organization, and more measures are rarely a solution, the right ones are what is important.