What does not get measured seldom gets managed. If the most important agenda for the CEO is to drive the strategy of the organization, then it's time that attention is paid to making the strategy measurable. And this is where the effectiveness of execution comes into play. Ultimately, effectiveness is about doing the 'right thing', and about prioritizing the more important areas over lesser priorities.

If you are the CEO of a medium to large fintech enterprise, chances are that you are already dealing with one or more of the following challenges, and quite understandably burnt some midnight oil over them too:

. The vision of the enterprise is shared by your immediate subordinates, but not cascaded across the enterprise

. Shareholder expectations are more financial in nature. Therefore, financial targets take center-stage, and operational objectives tend to get sidelined in review meetings

. Hard to make people own responsibilities - or make them accountable for results, as the expected outcome is vague, and not measurable

. Ownership to the strategy is not broad-based. Hard to make people see the linkage of internal initiatives to that of ultimate financial benefits

. Too many initiatives, with too little time. Your bandwidth is drained out

If any of the above sounds too familiar, take some solace. There may be some solution at hand. The 'Balanced Scorecard' precisely looks to drive the execution of strategy by bringing in the discipline of performance management into the day-to-day culture within the organisation.

The good news here is that there are eight simple steps to get your strategy working, leveraging the Balanced Scorecard. Considered as one of the most seminal concept in driving performance measurement, the BSC has been adopted by most Fortune 500 companies. While the principles are quite common and industry agnostic, there may be a few nuances that are more specific to fintech companies, that we will explore in this article.

 

Step #1: Articulate your vision using simple objectives

The clarity of thought is always defined by the simplicity of its message. Unfortunately, the problem starts right there. If you are unable to set the priorities, there can always be the confusion on the default mode of operation at a tactical level. Consider these examples:

. Drive profit faster than revenue, or drive revenue faster than profit?

. Grow domestic faster than international or the other way?

. Invest more in markets or in products?

. Develop in-house team or to build a third-party network.

. And so on...

It is obvious, that in most of the above situations, there cannot be a middle path. One may have to define the priority upfront, and set the course moving, especially if you are in a growth phase.

If we could articulate the top 20-25 objectives of the organization in simple, unambiguous and easy-to-understand phrases, then we have already set our foot on the right track.

Obviously, the easiest way to measure the success of the enterprise is by looking at its financials. Every shareholder meeting or board discussion will obviously be focused on that. However, the financials, are at the end of the day, only 'lag' indicators. It can only tell how the organisation performed in the previous year or quarter. And there lies the challenge.

In order for a successful measurement of organisational effectiveness, it is imperative to measure both lead and lag indicators. While the financials are lag indicators, the satisfaction levels and engagement with customers are the best lead indicators. Customer satisfaction is obviously directly linked to the effectiveness of the process framework of the enterprise, which in turn is delivered by people, enabled by technology. When we strike a 'balance' across both financial and non-financial objectives, and could measure them using an objective framework, we obviously have the essentials of the Balanced Scorecard in place.

Source: Khaleej Times