A Proposal of Extended Strategic Performance Indicator Deriving Framework for Monitoring the Effectiveness of Strategies

Organizations design performance indicators to monitor the effectiveness of their strategies and to inform the outcome to decision-makers. However, strategy managers have difficulties designing a performance indicator because there are intangible measurement targets. This study aims to support the design of performance measures to monitor the effectiveness of strategies. We propose an extended Strategic Performance Indicator Deriving (SPID) framework which is added a relation perspective in an organization. The perspective applies value or causal chain analysis to support deriving a measurable performance indicator. Then, we evaluated the proposed design framework in a medium-sized department. The results demonstrate that the proposed design framework supports deriving performance indicators by strategy managers and supports the explanation of the measurement targets to the decision-makers. Finally, the challenges and future research are described.