How CIOs can (and should) measure business outcomes

There are two kinds of measurements in business: one to assess performance and the other to provide intelligence. The smart CIO needs to do both.

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Peter Drucker famously wrote that things cannot be managed if they cannot be measured. But what if we’ve been measuring the wrong thing all along?

The notion of “closing space” on the football field is a good example. The ability to restrict the opposition’s passing options is a critical factor in a successful result and, consequently, measuring the number of possession-turnovers a team can create is a telling indicator of that ability, but it doesn't measure progress toward attaining that ability.

Pairing critical success factors and key performance indicators is a powerful tool for establishing progress towards some objective. This tool however will only be effective if the success factors and KPIs are related to underlying elements of an organization's goals.

In our football example, the goal could be to improve the team’s passing capability. The goal to improve passing could consist of three initiatives designed to improve ball handling, fitness and spatial awareness. Both the initiatives and the goal support a ball-possession game strategy (as opposed to a counter-attack game strategy).

In effect, a coach sets the strategy for the team, in this case ball-possession, and lays out goals and initiatives that improve the capabilities of the team such that it may undertake that strategy (playing a ball-possession game).

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