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Financial Performance Is Not Created in Management Reports
Financial performance is not created in management reports. That sounds obvious. But look at how much time companies put into reporting, and how little into the question of which measures actually work, and it is not obvious at all.
At the CPMC annual conference it became clear that the focus is shifting. Away from pure KPI reporting, towards actively steering strategic initiatives. Particularly in an environment that turns faster than the planning cycle.
Concretely that means: between the strategic target picture and financial impact sits an act of translation. That translation does not happen through dashboards but through initiatives with clear accountability for outcomes.
Behind this is a change of perspective. Reports show where you stand. Strategy describes where you want to go. Initiatives show what you can do to get there.
The decisive question is then no longer how EBIT looks. It is: what does each individual initiative contribute to earnings? What happens if we delay it, expand it, or stop it? Under which assumptions does it pay off, and under which does it no longer?
Companies that set this up properly gain the ability to act under pressure, because they know which levers they can move.
Look primarily at metrics and you are steering by the rear mirror.