How Do You Measure Up?

How Do You Measure Up? image MeasureMeasurement

As long ago as 1864, John Henry Newman said, “Growth is the only evidence of life,” and I believe that a healthy business is the one that measures its growth toward achieving its vision for the organization. This vision is what keeps your business alive and moving forward.

Think of the vision as a target for your employees. A vivid description of your organization at a point in the future (usually three years) provides a target where all employees can aim when they are making day-to-day decisions. When painting that visionary picture of your organization, there are subjective and objective components. The objective portion of your vision should include five to seven key strategic measurements that monitor the success of your organization. These measurements are captured in your measurement matrix (see a template at

This measurement matrix should be reviewed on a consistent basis to ensure the plan is working and the company is moving toward its vision. In other words, the measurement matrix monitors the health of your organization. Typically, the matrix is reviewed monthly by the leadership team as part of the plan execution review meeting. The lead financial person in your organization is responsible to update the matrix for each plan execution review session.

Your measurements should be centered on the key aspects of your strategy. For example, if your strategy is to focus your competence on a specific target market, you would track your sales by target market. Measurements that are on track illustrate which aspects of the plan are working. On the other hand, measurements that fall short of the objective highlight areas in need of attention. Action plans are then developed and documented to improve the areas that are not meeting your objectives.

So what is the time frame for the measurement matrix? Each measurement in the matrix should record two years of history and establish goals by each year out to the vision. So for example, if you have a three year vision, each measurement would have a goal by year for the next three years.

At SM Advisors we have a saying that a business plan is like a compass not a road map. In other words, in your plan you set a course to go a specific direction like North. Based on your measurements and other variables you may make in course adjustments in your plan along the way to get there. Keep measuring, keep evaluating, make necessary adjustments, and you will achieve your vision. Remember, Those Who Plan – PROFIT!

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