Risk-based performance

The Risk-based performance methodology uses the term ‘strategic activities’ to describe the ‘doing’ side of strategy execution.  Strategic activities are broken into two types: projects and countermeasures.

So what is the difference and why is it important? It is all related to timescales and when you expect the activity to make an impact.

A project is an activity aligned to a specific objective and may be associated with specific risks and controls. It will be designed to impact at a time beyond the current period (generally we consider a period to be monthly, as we recommend a monthly update cycle of key indicators).  Because of its nature, a project will typically involve an investment of time, money and resources that mean it must go through an evaluation, approval and review process. The exact process and the level of project detail that needs to be captured varies between organisations. 

In contrast, a countermeasure is associated with a key indicator (KPI, KRI or KCI) and is designed to impact within the current period. It is about taking short-term action to quickly address an issue that is emerging – it is about putting structure around organisational fire-fighting.  Because of the reactive nature of countermeasures, the evaluation, approval and review process is generally not as involved or formal as it is for projects; therefore less detail is required for a countermeasure. Often a countermeasure is used to capture the ‘just do it’ type activities that exist in any organisation.

So why is both important? There is a well–known, if often over–used, phrase “What gets measured gets done”. Unfortunately we see too many organisations focussing on the measurement side of strategy execution to the detriment of pursuing activities that actually deliver results –the ‘doing’ side of strategy.

Dividing strategic activities into projects and countermeasures helps organisations understand and manage how they go about executing their strategy.

In an ideal world organisations would thoughtfully decide what activities they are going to do and calmly undertake them via a portfolio of structured projects aligned to strategic objectives. The projects side of Risk-based performance enables this ideal world scenario, whereas the countermeasures side recognises that things happen which need to be fixed now and individuals must react and get on with doing it. These are the fire-fighting and reactionary activities that can be found in almost all organisations.

Unfortunately many organisations do not have a high-level view of the activities they are undertaking, which adds to the challenge of strategic execution. By capturing project and countermeasure information, and differentiating between the two, organisations can gain a portfolio view of what their people are doing and, importantly, an understanding of where the organisation is spending its time – whether proactively, through thoughtfully delivering projects that drive strategic results; or reactively, running around fire-fighting.

Understanding how the organisation is spending its time provides critical insight for management as they attempt to focus the organisation on strategic execution. It will also provide an indication about the type of culture that exists – is yours a business that carefully considers its next move or a fire-fighting organisation which is busy being busy?

Employing the Risk-based performance methodology will help your organisation move beyond the mantra of “What gets measured, gets done” and make managing organisational activities a key part of your approach to strategic execution but do so in a way that recognises the reality of how your organisation operates, captures reactive fire-fighting and enables management to be informed about where and how people are spending their time.

What is your experience? Does your organisation carefully plan and execute its strategy or is it all about firefighting? Would differentiating between Projects and Countermeasures help?