The key to measuring performance is establishing a dashboard/ scorecard of indicators that measure the internal stability and external equilibrium of the organisation.
When you have the right metrics in place, causal, output and outcome indicators, with the right incentives, the organisation should run itself. The following table describes the key types of indicators needed for running an organisation.
The Leading an Organisation Workbook provides exercises and instructions for carrying out:
In the private sector, the causal performance chain works in the following way. The leaders of an organisation drive the culture; the culture created by the leaders drives employee fulfilment/engagement; employee fulfilment/engagement drives customer satisfaction, and customer satisfaction drives financial performance. Therefore, if you want to improve the performance of your organisation, you must first focus on leadership and leadership development. (Click on diagram to enlarge)
If you are running a non-profit or governmental organisation, the causal performance chain is slightly different: the leaders drive the culture of the culture of the organisation; the culture drives employee fulfilment/engagement; employee fulfilment/engagement drives mission assurance; and mission assurance drives customer satisfaction. (Click on diagram to enlarge)
[Mission assurance is the ability of an organisation to provide the quality and quantity of services that are required to satisfy the demand.]
In all cases—for profit, not-for-profit, institution or agency, the performance of the organisation can be traced back to the culture that is created by the leaders of the organisation and the institutional legacy of past leaders.
The key cultural performance indicators are:
The key personal performance indicators of the leaders are: