This blog is not a critique of Andy Grove, the revolutionary former leader of Intel and author of High Output Management, still a management classic. Grove was smart enough to see why the Management by Objectives (MBO) implementation at Intel needed improvement. Where so many others saw MBO as a tool to control employees with tired annual performance reviews and misaligned bonuses, Grove imagined a solution that could focus, motivate, and align employees. It was a tool that everyone could use to strive for excellence the way a great athlete paces progress. He named their approach IMBO (Intel Management by Objectives) for a while and then later Objectives and Key Results (OKR).

It is great that Andy Grove gets credit for these improvements. The issue that makes me crazy is what I refer to as the “stake-your-claim” issue that is so prevalent in the management world. Every time a management consultant dreams up a slightly improved way to implement an existing set of principles, they feel the need to stake their claim by branding their contribution. We should all be simply giving Grove credit for a more effective way to implement MBO. Instead, the world has declared him the “inventor” of something called OKRs even though OKR and MBO are based on the same principles and follow roughly the same process.

This problem is common (and can be found in the history of some of BSI’s signature products). What if I want to emphasize the fact that some measurements are more important than others? Let’s call those Key Performance Indicators! What if the objectives and measures fall into different strategic categories in a way that emphasizes line-of-sight value creation? Let’s dub the categories Perspectives and call the system Balanced Scorecard. Or let’s use the same principles to focus on areas of responsibility in an HR sense and call some of them Key Results Areas (or Key Responsibility Areas).

This issue gets infinitely worse in the strategy space. It’s not enough to simply call our areas of focus Goals. In the Balanced Scorecard world we call them Themes and/or Strategic Results. Some call them Priorities, Critical Success Factors, or Pillars of Excellence. Some separate Wildly Important Goals (WIGs) from Pretty Important Goals (PIGs). Others create Big Hairy Audacious Goals (BHAGs), Moonshot Goals, Performance Targets, Benchmarks, Breakthrough Results or simply Budget. There seems to be no end to the variation in possible hierarchical combinations (and confusion) between goals, strategies, tactics, objectives, and initiatives. I have watched heated debates about whether PESTLE or STEEPLE was better. One team felt like the SMART mnemonic wasn’t clever enough and so created SMART ASSES. I’m not making this up.

Most of these improvements, and the resulting confusion, were caused by the same stake-your-claim phenomenon – someone felt they had created a better mousetrap and branded the improvement. The result of all this improvement is that measurement and strategy professionals spend an awful lot of time trying to define terms and clear up confusion.

That effort is difficult. If you look online for help parsing the difference between, say, an OKR and a KPI, you might find the results confounding. The definitions are almost always biased based on which product the author is selling. If I am selling OKRs, I claim that KPIs are trivial and use a misleading metaphor like a car fuel gage or speedometer to describe KPIs while vaguely claiming that OKRs track important matters. Meanwhile, if I am a KPI consultant, I can mischaracterize OKRs as trivial and unaligned quarterly activities while KPIs track long-term strategic impact. Almost all these types of differentiations are misleading at best.

Sometimes this parsing is so clumsy it makes matters worse. To differentiate between the terms KPIs and metrics, one company claims that metrics provide information that can be digested while KPIs offer comparative insights that guide future actions. Is that helpful at all? How is a measurement practitioner supposed to differentiate between simply digesting any particular measure and gaining insights from it?

Unfortunately, I am only scratching the surface on these types of confusions, so it is tempting to throw up your hands and say that clarifying terminology is a lost cause. But there are some simple tips I would offer to help overcome this challenge.

Broad Principles Are More Important Than Rigid Rules
Frameworks are great for organizing your thoughts, but only as long as the relative framework is intuitive within your culture. Knowing when to rigidly stick with the system and when to adapt usually means understanding the underlying big-picture principles the framework is designed to help with. In the strategic measurement space those principles are, among others, that: 1) it is useful to visualize and articulate the outcomes you are trying to accomplish, 2) successful strategy execution requires your team to connect dots between elements in the system and to prioritize collectively, and 3) measurement is foundational to any improvement effort. Changing the name of our measurements from key results to performance targets, or vice-versa, doesn’t violate any principles. Implementing KPIs found on a website without first establishing consensus about what we are trying to accomplish does.

Clearly Define Terms
As long as I am accomplishing these principles, the exact terminology or framework details can vary wildly. Almost by definition, no model is a perfect fit for every situation. The lexicon that BSI teaches can be found in The Institute Way or in any of our classes, but every organization must determine what definitions will work best with their culture. Almost all our clients customize a bit so that the lexicon is more intuitive for their employees. Then they keep that dictionary handy for easy reference. My only warning there is to not veer away too far from convention, because as employees come and go the onboarding is easier if incoming employees don’t have to unlearn old habits.

Consistency Matters
Once the lexicon is determined, work to be consistent to avoid miscommunication. It is not uncommon for a disgruntled employee or team to disagree with your terminology usage and try to ignore the discipline you are trying to impose. This can create quite a mess and so needs to be addressed. Even if they disagree with your definitions, most people can be convinced that there is a greater good to be gained by having everyone use the same language.

To learn more about any of these frameworks, please consider one of our Professional Certification Programs.

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David Wilsey is the Chief Executive Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

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