Top Level KPIs Create Strategic Stability
When a small set of key organizational metrics are established and shared within an organization, there is a stabilizing effect on a CEO's intent and strategic plan.
There's an enormous benefit to a CEO saying declaring, "This is what we are going to achieve" and "These are the metrics that define our mission in key performance indicators."
To declare something publicly is to make it official. To declare how you are going to count that commitment takes this even further. It is to wed the CEO to his or her vision in front of the entire company. "I do - and we will."
There's no getting out of the key metrics you've chosen to define success - not privately, anyway.
When Enterprise KPIs Don't Reflect the Strategy
In an organization that has not defined the vital signs for a CEO's vision, there is a substantial risk that the strategic vision subtly - or maybe not so subtly - changes in the background with new, emerging ideas.
In many organizations, the company's strategic vision is a rapidly moving target. Whether product or service-based, it is not uncommon to have a leadership team bounce - at disturbing frequency - from one breakthrough idea to the next - sometimes barely giving the last strategy time to take.
Unfortunately, because the pivots comes from the top, there is no institutional or hierarchical "brake" on this tendency. When a new "squirrel" appears, the organization needs to chase it. The boss said so.
As a result, leadership and departmental teams can start to tune out the "latest-greatest" strategic plan and focus on what they think is important for the organization, the department, or themselves. They do this knowing the strategy-du-jour will likely change or be replaced altogether.
Top-Level "Business Model" KPIs Solidify the Vision
A CEO dashboard whose metrics are tied to the underlying business model and visible to the organization counteracts this tendency to behind-the-scenes instability. The core KPIs solidify the highest-level of vision in the company and make it public.
To publicly shift your KPI targets is to admit one has abandoned the strategy and is now chasing a new goal. The simple act of public counting creates accountability - that very same accountability that is demanded from everyone in a data-driven culture.
There are six powerful impacts of a well-built CEO dashboard, for the other 5 read our definitive guide.