Not everything that can be counted counts, and not everything that counts can be counted

While data is important, the often-overlooked stories that go with them are as important. With so much data available to managers, identifying what is the right information to measure a strategy is difficult. We often see seemingly unrelated information being used to measure a strategy, often because of a lack of explanation. Simply using a number because it is ‘good’ rather than relevant is a trap many reporters fall in to.

On the flip side, using narrative-led discussion is as, if not more, important in explaining a strategy’s performance. Authentic strategies are usually hard to quantify, so leveraging powerful stories and examples is a crucial tool that companies should wield to inform stakeholders.

Something that can be counted

When trying to measure strategy, many managers will use the ‘bottom-up’ approach we laid out in our first article. They use the data available to them to create a strategy as everything in their world must be of the most importance and a part of corporate’s goals. What they fail to acknowledge is that many of the metrics they collect are by-products or relevant to other goals that may not be strategic, such as people performance.

Even a metric like revenue, a KPI for many businesses, may be misleading when measuring a strategy’s success. Consider the Hornby example from the first article. Their strategy was “to make perfect scale models, for adult collectors and that appealed to a sense of nostalgia”. What if an increase in revenue was not in fact delivered by adult collectors but children wanting to play with more authentic toys? This would be good for business, but it means the objective of the strategy would have failed. Perhaps going under the radar or being looked over by many managers and Boards. These situations are precisely the moments to take stock, acknowledge what you are doing well and look to implement a new strategy to take advantage of what is available to you.

Something that cannot

If the point above deals with outputs of a business being used to measure a strategy, what about the outcomes?

Where your strategy may have difficult to quantify aims such as the Hornby one, using case studies, imagery and narrative will show performance where numbers can’t. There is always a data point that can be tenuously linked to strategy, as per the introduction, but readers often see straight through these. For Hornby, this may have been something like customer satisfaction or increased sales, but how does that measure nostalgia or appeal to adult collectors? A case study with an adult admiring a train set might sound a bit cringeworthy (I’m a 30-something year old man who builds LEGO, I can’t talk) but it would show those two facets of the strategy were being achieved. Proving this is the case on a wide scale would be difficult but to a reader this would symbolise success is possible, and the strategy is working.

So what have we learned from all of this? Strategy is something that should be: implemented from the top down but based on feedback from the ‘troops on the ground’, aligned to a broader purpose; used to explain your decisions throughout your communications; and measured with both data and narrative.

Simple, right?

“Authentic strategies are usually hard to quantify, so leveraging powerful stories and examples is a crucial tool that companies should wield to inform stakeholders.”

If you’d like to discuss this, or any other subject, please get in touch with George Luck, Consultant, at george@gather.london

We’d love to know what you think.