Traditional performance measures—usually financial outcome—are “after the event.” They tell us how we did last month or last quarter, but are of little use in predicting future performance. This article talks about four “layers” of performance measures—financial outcomes being the outermost layer. As we move from “outside in,” or from outcomes to enablers, we find that the performance measures get increasingly easier to control. Then, if we work on the enablers, the outcomes become more predictable. Provided, of course, that we have ensured a strong cause-effect relationship between each layer and the next.

Joy, a CEO of a large insurance company, returned to his office in a bad mood. “Call the team to my office for an emergency meeting,” Joy barked at his secretary as he entered his office. “Ask everyone to drop whatever they are doing and come now.” Joy was just back from a board meeting where he had been grilled about his company’s falling market-share and profits in the car-insurance business.

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