Measures and incentives direct attention, so they need to support the value the business wants to create.
01 · The picture
Measures and incentives direct attention, so they need to support the value the business wants to create.
Follow the decisions
01Goal
02Measure
03Behaviour
04Review
02 · The idea
How I understand it.
People respond to what leaders measure, reward and discuss. A useful control system connects day-to-day decisions with the business's wider goals. Start with the behaviour you want: reliable service, thoughtful experimentation, durable customer relationships or efficient delivery. Select measures that help people see progress and recognise problems. Then ask how each measure might be improved on paper while the underlying service deteriorates. Pair a speed measure with quality, or sales growth with collection and retention where these matter. Give someone responsibility for investigating the signals and changing the process. Review incentives alongside the measures. The system should help useful information travel, including bad news, and give teams a way to learn from results before small problems become expensive.
03 · A fictional example
Put it into a business.
A support team is rewarded for closing tickets quickly. Customers begin reopening unresolved issues. The manager adds a review of repeat contacts and customer outcomes, while retaining a response-time measure. Weekly discussions examine difficult cases and remove recurring causes. The team checks whether the revised measures improve service without creating excessive weekly reporting or encouraging another damaging shortcut.
04 · Bring it into the room
How could someone improve your main performance measure while making the business worse?
One decisionOne next actionOne way to check
Where this note comes from
An original explanation drawn from my saved learning material. The worked example is fictional.
Harvard OPM · Unit 1Course reading or session material
Innovation - Wrap-Up Session Slides
Session faculty: Lynda M. Applegate
PDF pages 9–11, slides 17–21; operating controls, risk and behaviour
These notes collect my interpretations and applications. The schools and authors retain their original teaching materials.