Establishing Metrics in the Organization

In strategic planning, there are many criteria’s that can be used. The criteria used depend with the organization. Part of the strategic planning process is identifying the metrics the measure the progressive success of the organization. Measuring the success of the strategic plan is important in that it allows the organizations to make adjustments.  One of the metrics that can be used is profits.

For the profit oriented organizations, the success can be measures by the increase in profits. The main idea of planning in such an organization is to increase profits thus the metric fits the goals. Another metric that an organization can use is the number of jobs created in the society. These are more for the non-profit organization. If the main goal of an organization is to create employment, then the number of jobs created will be a good measure of success.

When developing a strategic plan, leaders must utilize some criteria. The criteria used depend with the position of the company.  A major criteria used is revenue growth. It is mostly used when the revenue growth has been constant or inadequate. Another criteria used is profitability. It is used when a company has insufficient working capital. Another criterion is shareholders value. It is used when the main goal of the company is to increase shareholders value. I currently work with a publicly traded company whose mission statement is to reward the investors.  In this case, the main purpose of the company is to increase shareholders value. Thus, the shareholders value criteria would be most effective in this company.  Other criteria’s would not serve the purpose of the company well. Success in this case will be measured by the increased value in shares.

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