... authoritative planning leadership, focusing on wrong value creation measures can distract executives from real opportunities to create value. Understanding how the company creates value requires a disciplined approach. 2. Integrate financial and operational measures Most planning and performance-management systems are based entirely on short-term financial measures. The value drivers behind financial performance need to be easily conveyed to line management and also to be periodically reviewed and updated. Shorter-term metrics should be integrated with long-term performance indicators to avoid decisions that may improve value temporarily but destroy it in the long run. By integrating financial and nonfinancial measures into the performance management system, managers can understand what drives financial results and have access to leading indicators that help them understand where the business is going. 3. Keep the measurement system transparent and uniform Complex or competing financial measures tend to bring redundancy into the measurement system. The measurement system should focus on the ...

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