Imagine walking into a maze with no map, no signs, and no clear destination.
Frustrating, isn’t it?
That’s what it feels like to be part of an organization where the strategy is unclear or poorly communicated. After all, success doesn’t happen by accident—it’s the result of deliberate, well-communicated, and well-executed plans.
The thing is, many organizations struggle to effectively communicate their strategy to their employees, leaving them wandering aimlessly without a clear sense of purpose.
Photo from Vecteezy
The Problem with Vague Strategy Statements
According to Professor Joel Litman and Dr. Mark L. Frigo in the book, “Driven,” organizations often rely on ambiguous statements like, “we seek profitable growth” to define their strategy.
While these phrases sound impressive, they fail to provide employees with actionable insights into the company’s goals.
As a result, this disconnect creates confusion and disengagement, as employees are left to guess how their roles contribute to the larger organizational objectives.
That’s why in reality, effective communication of strategy goes beyond buzzwords and generic aspirations. It requires organizations to tailor their approach to different business models and customer needs.
After all, strategies are not static; they evolve with market dynamics, customer expectations, and competitive pressures. With that, the measures used to track progress must also adapt to these changes.
High-performing organizations understand the importance of aligning their competencies with performance measures that drive strategic success. These firms excel at detecting unmet needs in large and growing customer groups, tailoring their activities to address these opportunities.
Michael Porter, a renowned strategist, emphasizes this point:
“Measure how various parts of your value chain actually fit together to lead to an overarching advantage, rather than using process-by-process metrics.”
This holistic approach ensures every aspect of the organization contributes to a cohesive strategy, rather than operating in silos.
The Myth of One-Size-Fits-All Metrics
Professor Litman and Dr. Frigo say there is no universal metric that can address every organizational need. While branded performance measures like net promoter scores (NPS) or balanced scorecards are valuable, their effectiveness still depends on the specific context in which they are applied.
A single metric may work well for resource allocation but fail to provide meaningful insights for executive compensation or business valuation.
So, what is the key?
FLEXIBILITY.
At the end of the day, organizations must design performance metrics that align with their strategy and adapt to the unique demands of different analyses. This ensures decision-making processes are informed by relevant and accurate data.
Picture this: Low-performing organizations often fall into the trap of focusing on metrics before defining their strategy. They ask questions like:
“What should we measure?”
“How should we measure performance here?”
Meanwhile, strategic performance measurement systems, such as the Balanced Scorecard, are fundamentally about implementing strategy.
Such systems teach management that before establishing performance metrics, organizations must ask themselves:
“Have we explicitly defined our strategy and goals?”
“Do we understand the customer objectives, offering creation, and production objectives necessary to achieve our wealth-creation goals?”
This is because without clear answers to these questions, performance measurement systems are likely to become convoluted and ineffective.
The Necessity of Evolving Metrics
According to Professor Litman and Dr. Frigo, one of the most common pitfalls for organizations is clinging to outdated metrics. As strategies change, so too must the measures used to track progress.
The late 1990s serve as a cautionary tale, as industries grappled with disruptive technologies that reshaped business operations and consumer expectations.
Take for example the case of Dell…
Photo from Gigahertz
In its early days, Dell’s strategy prioritized operational efficiency, focusing on metrics such as the cash conversion cycle. This allowed the company to manage inventory effectively and maintain a competitive edge.
However, as customer demands shifted toward innovation and enhanced post-sales service, Dell had to adapt its strategy—and its performance measures—to remain relevant.
See?
Clearly, the path to strategic excellence in today’s dynamic business environment is to prioritize the clear communication of strategy and the alignment of performance measures with strategic goals.
This approach not only empowers employees to contribute meaningfully to organizational success, but also ensures the organization remains agile in the face of change.
The bottom line?
By defining strategy first and tailoring metrics to support it, companies can navigate the complexities of their industries with confidence.
In doing so, they transform vague aspirations into actionable plans, paving the way for sustainable growth and competitive advantage.
We hope you learned a lot from today’s topic!
If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo.
Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm.
About The Dynamic Marketing Communiqué’s
“Tuesdays: Return Driven Strategy”
In the book, “Driven,” authors Professor Joel Litman and Dr. Mark L. Frigo said that the goal of every long-term successful business strategy should incorporate the combined necessity of “making the world a better place” and “getting wealthy.”
That is why they created Return Driven Strategy and Career Driven Strategy―frameworks that were built to help leaders and professionals plan and evaluate businesses so they can also help others achieve their organizational goals and career goals.
The frameworks describe the plans and actions that drive returns for anyone in an organization such as independent contractors, marketers, brand managers, communicators, and other people in any field. These actions lead to the creation of wealth and value for customers, employees, shareholders, and the society.
Every Tuesday, we’ll highlight case studies, business strategies, tips, and insights related to Return Driven Strategy and Career Driven Strategy.
In planning, building, or managing brands and businesses, these strategies, case studies, and guidelines will help you choose what specific actions to take and when to take them.
Hope you find this week’s topic interesting and helpful.
Stay tuned for next Tuesday’s “Return Driven Strategy!”
Cheers,
Adrian Kyle Vergara
Content Writer
Valens Dynamic Marketing Capabilities
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