Non-Financial Indicators Can Better Inform Strategic Decision Making

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Your employees’ and customers’ actions and attitudes are shaped by how they perceive your company. Learn how to measure this to be able to anticipate changes in your outcome measures and better inform your decision making process.


Non-Financial Indicators Can Better Inform Strategic Decision MakingAchieving true change within an organization inevitably requires changing attitudes and perceptions in both internal and external stakeholders. Yet measuring such changes can prove to be a tricky matter.

Many executives do not believe that the benefits of correctly applying a well-designed survey outweigh its costs. They may argue that they are expensive or that steady flows of surveys can, in fact, annoy respondents. In truth, there are many leaders who resist using surveys out of fear that they may challenge the underlying paradigms on which they base their current decisions. Besides, they may raise more questions than the ones they answer. However, in order to predict stakeholder’s behavior, it is necessary to understand their perceptions of the company.

Even if it is true that professional survey services are expensive, technology has gone a long way to facilitate their application and lower their cost. Besides, developing a clearer understanding of the relationships between the company and its stakeholders, on which to base key management decisions, will no doubt increase the effectiveness of measures taken.

The Importance of Perception

In order to successfully execute its strategy, a company must understand and satisfy its customers’ and employees’ expectations.

The Balanced Scorecard represents different interest groups’ expectations in its distinct perspectives. For example, the financial perspective seeks to represent and fulfill shareholders’ expectations of return on their investment.

Similarly, the customer perspective expresses the intended firm’s value proposition. A customer’s behavior towards the company will be deeply influenced by the perception they have of this value proposition. This can also apply to internal customers as expectations and perceptions influence their behavior, and ultimately, how hard they work and how efficiently they employ the resources to execute the strategy. The organization can influence these perceptions, but not control them.

Since it is clear that perception triggers behaviors, it is crucial for the company to understand its stakeholders’ point of view as much as possible.

Expert Research Design is Vital for Success

Regular surveys provide the most useful information for the organization. These can be applied through Web-based survey tools using the existing customer base. However, it is fundamental that survey be designed by a professional, as a poorly designed survey will not only yield unreliable results, it can severely taint results and the organizational atmosphere.

Oftentimes, when the person responsible for designing the survey is an existing member of the organization, they inadvertently instill some of the company’s biases into the questions. Even the way a question is phrased or the order in which the questions are presented can dramatically alter the results.

Therefore, it is important for the research designer to be unbiased about the research topic but familiar with the organization. It is recommended that they study the organizational environment first, so that they can correctly decide on the best method to use and how to best segment the population. They should start by mapping out the cause-and-effect relationship among the company’s strategic objectives.

A well designed research can test the company’s hypothesis regarding their value proposition and highlight what perceptions the company needs to work on. It can also validate the degree to which the customer values the initiatives implemented by the company to offer better services.

Conquer Survey Fatigue

The value of most surveys lays in periodically sampling the population with the purpose of revealing trends, rather than snapshots.

However, bombarding stakeholders with surveys will almost certainly exhaust them as a valuable information source and discourage their response. Ideally the Office of Strategy Management should organize the surveying process so that a controlled random sample gets surveyed each quarter, thereby reducing the survey frequency to a minimum for each customer and employee. Moreover, by surveying stakeholders this way, the findings would be chronologically aligned with the company’s strategy meetings.

While most questions would remain the same from one application to the next, executives could include new questions targeted at understanding perceptions on more recent matters or initiatives.

Other options: Focus Groups or Interviews

Focus groups may help when surveys would not be effective or practical. They can help unearth root causes for perceptions that would not be discernible from the survey alone. Focus groups typically consist of 8 to 12 members and one or two facilitators discussing no more than five in-depth questions. On the other hand, one-on-one interviews offer the in-depth benefits of a focus group, without the hassle of scheduling and travel.

Reporting the Findings

Even if it is not necessary to include all the detailed findings within the BSC report, it is important for the responsible for each objective to closely work with the research designer to analyze the survey findings and put them into context. He will then have to present these to the rest of the executive team during the strategy meeting. To avoid replacing old paradigms with new one, it is important for leaders to balance their seasoned judgment with some skepticism when making decisions based on said findings.


At TRISSA we can help you all the way

Studies show that only 45% of companies are content with their strategic planning process. Are you a part of that 45%?

In these times of economic uncertainty, having the right strategic management tools could be the difference between having your company flourish or perish. At Trissa we help our clients successfully execute their strategies.

So go ahead, browse our webpage and get to know us better. Or send us an e-mail; our consultants would be delighted to answer any questions you may have:


Author: Trissa Strategy Consulting

Source: Robert S. Gold, Harvard Business School