The Function of Management is to Produce Results

"Above all management is responsible for producing results" Peter F. Drucker

Action: Is your organization delivering the results it should? If not, articulate your mission. Peter F. Drucker

I think that Dr. Drucker's Action for today is extremely helpful, because it guides us to differentiate between results and mission, and how to measure production of each. If you don't, it's kind of like the discussion of what is quality in "Zen and the Art of Motorcycle maintenance". You can just keep going round and round until you are insane, if you are not careful. Zen and the Art of Motorcycle Maintenance by Robert M. Pirsig

So, if you are a "for profit business" the result has to be something along the lines of "maximum free cash flow per share over the business cycles" also sometimes called the "bottom line" etc. What you do to achieve that economic earning and how you do it must be contained in the mission. Does your mission relate directly to economic earnings (however you represent that)?

I think results achievement and mission execution should be the discussion points in all Senior Management reviews. It is probably GE that has perfected this as a management practice. Jack Welsh was likely the best at executing this practice, and he became so by doing it diligently and rigorously. Every business leader was evaluated by him (as I understand it) against two parameters. The economic result, and mission execution (effort/success). See Jack: Straight from the Gut by Jack Welch and John A. Byrne

Do you use this simple (not easy) 2X2 to evaluate your leaders? Or, do you clutter up the process with too many measures, or vagueness.

The nice thing about this simple method is that you can use it throughout your entire value chain in a cohesive way. Every function in your company, contributes to Free Cash Flow (look up Dupont Charting if you want to learn this method). And a sub-mission can be developed for every function in support of the overall function.

I would caution, that with every good practice, its application needs to be tempered with sanity. There have been a number of companies that have taken EVA (Economic Value Analysis) too far. EVA and Value-Based Management: A Practical Guide to Implementation by S. David Young and Stephen F. O'Byrne

Once you plot your functional and senior leaders against this 2X2 matrix, you have a pretty good comparative methodology.