Performance Is Everything

8Selecting the Right Performance Measures

“The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong question.”

—Peter Drucker

The purpose of this chapter is to explain the reasons for selecting the right performance measures and how to do so. The overarching questions to answer include, How can we

• build realistic measures that drive needed change and behaviors?

• articulate firmwide objectives through an integrated measurement system?

Vision, Strategy, and Objectives

We are often asked by professional services firms to supply them with a list of the right performance measures. It seems they want to be transported magically to the end of the process rather than take the required journey through the process. Unfortunately, no single list is right for all firms. We have certainly created a number of these lists over the years and must stress that the right list for your firm is one that supports your firm’s vision, strategy, and objectives. Clarifying vision, strategy, and objectives is the enabling process that allows a firm to select the right performance measures.

The Role of Performance Measures in Driving Behavior

Over the past few decades, people have referred to performance measures by different terminology. Some call them performance indicators; others call them key performance indicators; others refer to lag measures. Certainly, these terms indicate some type of measurement.

When a firm selects the correct measures, ...