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In my prior employment there was an oft repeated catch-phrase: “The best thing about IBMers is that they do EXACTLY what they are incented to do.  The worst thing about IBMers is that they do EXACTLY what they are incented to do”.

This is superficially funny, or at least ironic.  The point? There are several – yet the most poignant is the observation that firms are often challenged to execute on a good business strategy.  The largest reason why the strategy doesn’t get executed as the strategy designers had intended is the measurment system that is in place to incent – or more acurately to control – the behaviours of their employees.  Seldom is the measurement system updated to reflect measures appropriate to the success of the newly declared strategy.

Why is this?  Is it because finance is in charge by way of ownership of the measurement system and doesn’t get invited to the strategy table?  Is it because no one GETS the direct relationship between employee behaviours and the measurement system?  Or is it that no one really knows HOW to construct a measurement system that will foster the behaviours that are required of the strategy?  Possibly, it is all of these.