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Steven Covey, author of The Seven Habits of Highly Effective People, and many others quite rightly recommend that when you start any kind of new project, you should begin with the end in mind. What does that involve?

1) Deciding where you want to be in the future (that is, what your “end state” will be);
2) Defining your key goals and objectives in getting there (to guide your various efforts along the way); and
3) Building and then implementing your plan to get there (the means to reach your desire end state).

 

This planning cycle works for all individuals, in both their professional and personal lives. It is even more important for organizations, where an understanding across the whole enterprise is vital in obtaining broad support across a workforce faced with numerous, and many times conflicting, priorities.

 

Read on…

A well-known maxim is, “What gets measured gets done.” All enterprise processes, including internal auditing, can benefit from measurement. Ideally, measurement will help an organization:

 

• show how these results support organizational objectives;
• determine what works and what doesn’t;
• justify capital allocation;
• motivate and provide tangible feedback to employees; and
• enhance the ability to communicate with stakeholders.

 

The bottom line is that the auditors should be: 1) encouraging and verifying that organizations have robust systems to measure and report performance; 2) be leveraging the information from such systems in planning their audit efforts, and finally 3) walk the talk themselves, by defining their long-term goals, the means to get there, and reporting their progress to the audit committee.

 

Have another great month.

 

Dan Swanson

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Performance Measurement and Reporting Resources

 

Landmark guidance

Measurement & Metrics Guide (MMG) is designed primarily for chief compliance and chief ethics officers and will also help the directors, executives and others governance practitioners.

 

Organizational Governance: Guidance for Internal Auditors

Other resources
Steven M. Hronec’s Vital Signs: Using Quality, Time, and Cost Performance Measurements to Chart Your Company’s Future (New York: AMACOM, 1993) is an easy-to-read primer on developing balanced metrics.

The groundbreaking description of the balanced scorecard approach, integrating non-financial measures with financial measures, is Robert S. Kaplan and David P. Norton’s The Balanced Scorecard: Translating Strategy into Action (Boston: Harvard Business School Press, 1996).

For a quick read on Six Sigma, try Subir Chowdhury’s The Power of Six Sigma (Chicago: Dearborn Trade, 2001). This fictionalized description, only 117 pages long, provides a basic grasp of the Six Sigma concepts.

 

Alignment: Using the Balanced Scorecard to Create Corporate Synergies

Balancing Measures: Best Practices in Performance Management (NPR)

Comptrollership Crossroads—Working Smarter for Better Results.

Enhancing Shareholder Wealth by Better Managing Business Risk (IFAC)

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