This insightful point was made by Roger Estell on my blog last week.
It merits our thoughtful consideration.
Let’s start with some thoughts about the fundamentals underlying any successful enterprise, whether large or small.
Let’s assume that we are all working together to deliver success for the enterprise.
Then how is success measured?
The executive team, from CEO on down, is usually measured based on whether the organization has achieved targets (or metrics) approved by its owners (of their representatives on the board).
Rather than (as in the case of COSO ERM and ICF) assuming that those are the right metrics to measure success, I suggest considering:
- Have the best objectives been set? Were all opportunities and potential hazards of significance considered during the objective (and strategy) setting process?
- Have the right targets been set? Are they too low, so that the executives don’t stretch as much as they should; if they are too easily achieved, there is a temptation to store opportunities for the next period. If they are too high, management may take a level of risk (a potential for harm in this case) that is beyond what the owners consider acceptable.
- Have performance targets and incentives been established throughout the organization that are consistent with the targets set for the…
