July 2008 Deep Insights

Tracking financial results is an important element of any successful organization’s operation. However, it is not the end all. Organizations must develop navigational measurements that predict what the results will be and encourage strategy or tactical adjustments as needed.

Financial reporting paints a picture of the effort expended by an organization from a historical viewpoint. Therefore, organizations can only take action after the fact. Damages that could have been avoided accumulate; actions that would enhance results in a timely fashion cannot be taken. To avoid such issues, organizations must drill beneath financial goals to find tactics/activities that are integral for financial success.

Once established, tactics/activities must be converted into commitments between people. Actions taken through commitments are the foundation of an organizations successful execution of its strategy. Commitments encourage people to hold each other accountable. Transparency in commitments creates the trust essential for negotiations when collaborative action is needed.

Negotiations are necessary to understand how each person will deliver their commitment. Negotiations build awareness of situations that may hinder or add unnecessary conflict. Through negotiations, planned interventions can evolve to guarantee performance. Interventions should focus on at least two items: anticipation of situations that could occur and what actions should be taken to successfully execute the organization’s strategy. People must approach this process in the spirit of experimentation, not entering negotiations or interventions to place blame. It must be a place of support and collaboration, people working together to meet commitments.

Commitments made in a transparent public forum, in a collaborative environment of experimentation will usher an organization into financial success, beyond expectations. Tracking and measuring commitments is the navigational pathway to successful financial results.