PDF Summary:Financial Planning & Analysis and Performance Management, by Jack Alexander

In the realm of finance, planning and analysis are indispensable for ensuring an organization's success and growth. In Financial Planning & Analysis and Performance Management, author Jack Alexander reveals the foundational principles and practical techniques essential for proficient financial planning, analysis, and performance management.

The book delves into detailed methods for scrutinizing financial statements, assessing key metrics, and applying specialized analytical tools and cost allocation techniques. Alexander also explores approaches for integrating performance management into critical business functions, setting effective metrics, and crafting visually compelling dashboards. The text guides readers through strategic financial forecasting, scenario analysis, and developing robust long-term projections.

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• Regular management gatherings take place every month and quarter. Focus discussions on the key elements that propel performance, execution, and accountability.
• Overseeing personnel management. Integrate performance management closely with key management processes to evaluate and motivate employees according to their progress toward organizational objectives.
• Creating reports tailored for managerial needs. Examine the elements that shape results through an emphasis on predictive analytics rather than simply analyzing historical accomplishments.
• Business expansion strategies. Evaluate and manage the effectiveness and outcomes of mergers and acquisitions individually and as a whole within the investment portfolio.

Creating a strong system to manage performance efficiently.

Identifying and prioritizing the key functions, responsibilities, and tasks vital to achieving the company's objectives.

Before initiating the creation of an efficient system, Alexander underscores the necessity of setting precise goals and benchmarks for performance management. Typical goals encompass:

• Achieving goals that are in harmony with the organization's strategic and operational plans.
• Creating strategies to prepare for various possible future events.
• Monitoring the key elements that impact the valuation and performance of a business.
• Recognizing, observing, and reducing risks.
• Improving the transparency of key aspects of organizational effectiveness while simplifying the approach managers use to distribute and maintain accountability.
• The framework provides a solid foundation that enables both managers and team members to understand the impact of their roles and activities on value generation, operational effectiveness, and financial outcomes.
• Enabling the prompt identification of negative occurrences and patterns, thereby allowing for the formulation of strategies to tackle those concerns.
• Employing visual tools to effectively and efficiently communicate key details to executives and managers.
• The book explores the integration of performance management with essential managerial tasks, including strategic and operational planning, and also encompasses the recruitment, evaluation, compensation, and supervision of forecasts.

Identifying the central duties, obligations, and assignments is crucial once objectives have been set, as these will constitute the organization's main concentration. Alexander advises that each organization should create a structure dedicated to evaluating performance, which encompasses:

• Understanding the objectives of the company.
• Documenting and understanding the primary objectives and key projects that guide the strategic course of the company.
• Analyzing the competitive forces within the market.
• Assessing a company's robust areas and identifying opportunities for improvement, while considering prospective advantages and obstacles.
• Evaluating recent patterns in organizational performance, identifying the driving elements behind results, and identifying opportunities for improvement with objectivity.

The assessment must include a comparison with competitors in the industry and with companies known for their outstanding operational practices.

Setting objectives and creating a foundation for evaluating performance.

After establishing goals and assessing their current status, organizations must assess and record their recent achievements, which lays the groundwork for establishing future performance targets and benchmarks. Alexander advises beginning with a comprehensive assessment of the organization's fiscal stability, which involves an in-depth examination of its financial records and key economic indicators, as outlined in Chapter 2. The section provides an in-depth analysis of a case study highlighting the recent successes achieved by Roberts Manufacturing Company.

It is crucial to evaluate the company's outcomes in the context of both its industry counterparts and the most exemplary benchmarks within the sector to establish a solid structure for its unique performance metrics. Analyzing how a leading organization operates offers substantial educational benefits, regardless of industry differences. To improve the performance of your supply chain, consider studying the strategies of industry leaders such as Apple or Amazon, rather than focusing on a comparable competitor without a history of innovative supply chain or distribution methods.

The approach entails vigilant oversight and tracking of crucial performance metrics.

The roles of Financial Planning & Analysis alongside Performance Management must operate collaboratively to achieve success. To effectively select performance metrics that drive results, it is crucial to create a direct link between strategy, key business activities, and the financial outcomes that enhance value for shareholders. Establishing an effective performance management framework is contingent upon identifying crucial goals, developing strategies and processes, and understanding their connection to the expected financial and operational results. Alexander advises combining these key processes with efforts that improve performance and increase value.

The author highlights six crucial elements that contribute to value generation, such as revenue growth, competitive pricing capabilities, operational effectiveness, judicious capital investment, costs related to capital, and factors that defy easy quantification.

1. Growth in sales. Revenue growth is frequently viewed as the main catalyst for value generation. The author emphasizes that the influence on value varies with each type of revenue increase. Expanding a business through acquisitions usually requires substantial financial investments, which can result in diminished returns on those expenditures. Chapter 15 offers a thorough exploration of this topic.

2. Establishing pricing relative to rival companies. The firm's financial success is greatly influenced by its ability to maintain or increase the per-unit price at which its products are sold. The company's product range also mirrors the competitive dynamics of the market.

3. Improving operational effectiveness. The importance of this factor is often overlooked and not fully understood. The proficiency and efficacy with which a company conducts its business operations determine its operating effectiveness. The breadth of the scope extends beyond production to include both innovation and organizational management tasks. Many companies endeavor to measure their operational effectiveness by examining key metrics, such as the ratio of operating profit to sales, the share of sales consumed by selling, general and administrative costs, and the sales revenue allocation for research and development efforts. Organizations with advanced systems monitor a range of indicators, including process efficiency, the length of operational cycles, and total output. Chapter sixteen offers an in-depth analysis of this component.

4. Maximizing the allocation of fiscal assets. Effectively overseeing a business's capital assets often goes unnoticed as a key contributor to increasing the company's value. The intention is not to imply that companies ought to excessively economize. Focusing on the company's fiscal requirements can lead to significant improvements in financial results and an increase in market value. Effective capital management is contingent upon ensuring that the allocation of funds to working capital is optimal and that significant outlays for property and equipment are justified. The book delves into the effectiveness of how capital is employed in chapters 17 and 18.

5. Intangible assets. Shareholders gain considerable advantages from elements like the management team's expertise and expected future results that are not easily quantifiable. The intangibles also include the nuanced fiscal duties linked to preserving liquid resources such as cash and amounts due from customers. This pivotal element impacting value was examined in chapters eleven and nineteen.

6. The cost of capital. The valuation of a company is significantly affected by the costs of its capital, which serve to discount its future cash flows. The expense related to securing capital is a fundamental factor taken into account in various other valuation techniques that utilize multiples of profits and sales. The cost of capital is influenced by a blend of the debt-to-equity ratio, the expected risks tied to forthcoming occurrences, the impact of fixed costs on business operations, and the volatility in the company's stock value. The broader economic conditions, such as current interest rates, affect the costs a company faces for its capital. Chapter nineteen explores the techniques for determining the costs related to a company's capital, focusing on its financial structure and related topics.

Companies need to identify the primary responsibilities and activities that have the greatest impact on each critical component. The amount of capital required to acquire assets such as property, industrial facilities, and equipment varies based on the industry of the company (such as manufacturing versus services), how streamlined its operations are, and the degree to which it has incorporated various stages of production, which involves decisions about whether to own or outsource production plants.

Selecting appropriate performance indicators is crucial to accurately monitor the progress of these initiatives and processes. The team establishes financial objectives and operational targets, enabling them to monitor advancements and implement required adjustments to realize their intended results. Each driver may include a range of processes and activities. Illustrating the impact of tasks and operational activities on financial results and their role in value generation effectively communicates the importance and progress of these initiatives to the whole team. Employees acknowledge the significance of their personal contributions to the collective success of the company.

Evaluating performance objectively while taking into account factors related to the market and competition.

Alexander advises that businesses establish benchmarks for their existing operational effectiveness and identify potential improvements by conducting unbiased evaluations throughout different segments of their organizational activities.

• Grasping the dynamics present in the market and the competitive landscape. How rapidly is the industry expanding?
• Financial transactions take place. How does the company fare in terms of traditional financial performance indicators such as equity returns, profitability ratios, and asset utilization efficiency?
• Benchmarking. Assess the alignment of the metrics and indicators that are pivotal for value generation with those used by leading companies and top-performing peers in the industry.

Evaluating a range of companies through the techniques described in the third chapter provides a broad view that assists in identifying opportunities for improvement.

Selecting appropriate metrics that align with the organization's strategic objectives is crucial.

Utilizing a performance measurement spreadsheet to set objectives, identify key factors for success, anticipate possible unintended consequences, and understand the broader context.

Selecting appropriate metrics and developing efficient dashboards are essential because they inherently convey an organization's primary concerns and objectives. Entities and individuals respond to the establishment of performance benchmarks. Consistent oversight of productivity often leads to improved output, particularly when tied to financial rewards. Alexander recommends that managers carefully choose suitable metrics and remain vigilant in mitigating any unforeseen repercussions.

Focusing exclusively on the velocity of inventory turnover and replenishment may unintentionally give precedence to reducing inventory levels rather than guaranteeing timely deliveries, which could risk diminishing customer satisfaction. When evaluating the effectiveness of customer support staff based on the quantity of calls managed and their length, there's a danger that they may focus on quickness rather than thoroughly addressing the concerns presented by those they serve. Alexander advises employing a custom-made tool for evaluating essential metrics, which should clearly state the objective, accurately describe the metric, and include associated metrics at different levels, the processes implicated, potential negative impacts, and compensatory actions.

Focusing on metrics that predict upcoming financial and business results.

Established metrics and conventional financial statements typically showcase the results of corporate actions and processes that have transpired after a financial period has ended. Alexander recommends that managers and analysts expand their perspective by focusing on metrics that may indicate future fiscal outcomes. Evaluating the factors that directly influence financial results is essential for the prompt initiation of corrective actions. Imagine the surprise of getting a lab report showing high sugar levels, and then discovering it was actually conducted three months earlier! Receiving these test results quickly greatly improves the usefulness of the measurement, allowing for more immediate action on corrective steps.

For example, many managers commonly track the time it takes to collect payment after a sale. The metric is calculated at the end of the quarter when the final revenue numbers for that timeframe have been confirmed. To enhance understanding, it's essential to manage and maintain performance by focusing on critical activities that affect the Days Sales Outstanding (DSO), such as the consistency of revenue, the quality of production, and the accuracy of billing processes. By consistently monitoring these metrics, managers are able to implement proactive strategies, allowing them to step in before financial results materialize. The author provides additional guidance on pinpointing and nurturing metrics that accurately assess performance, emphasizing certain critical qualities.

• Relevancy. Does the metric align with the organization's fundamental strategic objectives and its commercial ambitions?
• Objectivity. Select metrics that are quantifiable and grounded in unbiased standards whenever feasible.
• Timeliness. Assessing a process after it has been put into action provides minimal advantages, especially when the primary objective is to improve performance.
• Balance. Choose and implement metrics that maintain equilibrium to avoid disproportionately emphasizing one aspect to the detriment of others.
• Focus on metrics that are predictive of upcoming trends. Oversee and manage the crucial procedures that establish the ultimate financial and operational outcomes.
• Establish unambiguous standards to gauge performance. Ensure consensus on how each metric is comprehended and computed.
• Ensuring the accuracy and consistency of data. Developing a system to manage corporate performance can pose considerable challenges. Provide individuals who rely on performance metrics and dashboards with data that is both reliable and accurate.
• Unforeseen outcomes. Despite having the most positive intentions, sometimes unexpected results can happen. Test and consider unintended consequences before adopting a measure.
• Simplicity is key. Concentrate on what truly matters. Ensure you don't undermine your attention by tracking too many metrics in different domains or procedures.

Crafting visually striking dashboards.

Focus on the key elements and ensure balance within the metric.

The author suggests creating dashboards that are easy to use and designed to quickly provide clarity on trends, patterns, scale, direction, and areas that may need additional attention or action. The interface is designed for users to quickly identify key components, similar to how a pilot quickly evaluates the instruments on an airplane's dashboard.

Dashboards are refreshed regularly, following a schedule that could be daily, weekly, monthly, or even quarterly.

Jack Alexander encourages us to consider how often performance metrics should be reviewed and the associated information refreshed in the display. Some metrics necessitate regular tracking, which could be daily or on a weekly basis. The influence of weather on particular consumer demographics, industrial process outputs, or the number of times customers engage with support services all serve as examples that underscore this concept. The monitoring of income derived from novel products and services, along with the Return on Invested Capital (ROIC), typically occurs on a quarterly or annual basis. The regularity with which a metric is assessed should correspond to how often management can impact it through their decision-making and actions.

Creating custom dashboards designed to meet the specific requirements and individual duties of every manager.

Dashboards are commonly viewed as tools that measure the overall performance of various departments or sectors, including the management of overhead costs, the advancement of product development, or the observation of sales growth. A variety of businesses have expanded their use of dashboards not just to track specific goals but also to manage the progress of key projects. Alexander advocates for the creation of graphical instruments that distribute information throughout every level within the company, providing an all-encompassing view for the entire company or its primary segments, as well as a set of detailed graphics that highlight key metrics for crucial positions, departments, and areas.

Creating a framework to oversee performance.

Incorporating performance management within other essential management procedures.

Alexander observes that a multitude of performance measurement endeavors do not meet expected benefits because the metrics employed do not sufficiently highlight key elements or do not align well with vital management activities, including planning, forecasting, evaluation, customer service, and managing human resources.

Traditional budgeting methods typically focus on the intricacies of the company's ledger and its financial reports rather than prioritizing key factors that contribute to the company's prosperity, like advancing product development, sales strategies, or overseeing the supply chain. Incorporating performance dashboards and key metrics into the process fosters accountability and ensures uniformity.

In Chapter 9, the author provides comprehensive advice on improving cohesion by recommending methods to strengthen the alignment between planning, forecasting, and managing human resources by utilizing techniques and instruments aimed at assessing performance.

Effective communication, educational growth, and advancements in technology are immeasurably valuable.

To harness the benefits of a performance management framework, it is essential for all departments and echelons within the company to have a clear comprehension of its objectives and to reach a consensus on the metrics that will be used to monitor and evaluate advancement. Alexander discusses a range of topics related to finance and performance management, including:

• Understanding the basic principles underlying financial reporting.
• Fundamental concepts related to evaluating worth and the factors that affect it.
• Understanding the complexities and dynamics inherent in business frameworks.
• Selecting key indicators to assess performance.
• Integrating different functions and activities with the key elements that propel performance.
• Developing and employing performance monitoring panels.
• Approaches and tactics focused on continuous improvement and examination.

A growing number of businesses are embracing technological innovations to guarantee the swift distribution of essential business insights, including financial reports, fundamental success measures, and key performance indicators. Over the past thirty years, the sophistication and prevalence of such solutions have significantly increased, encompassing:

• Mainframe systems designed to integrate budgeting along with reporting capabilities,
• Legacy midrange systems that were widely adopted,
• Large Enterprise Resource Planning (ERP) systems, such as Oracle and SAP, integrate multiple modules that span finance, manufacturing, human relations, and additional operational areas.

In the realm of performance management, it is essential to avoid certain traps, particularly the flawed attempt to replace human judgment.

Alexander cautions against additional frequent errors that can compromise the effectiveness of performance management. One of the most frequent problems is that managers and employees begin to stare at the dashboards, ignoring other sources of critical business intelligence, such as trends in customer satisfaction, competitive pressure, and potential changes in operating practices and business models. The author cautions not to regard the software as a cure-all. While technology and software solutions can be an important part of improving performance management, it is also critically important to select the right measures, identify high leverage improvement opportunities, clearly define the measures, and integrate them into other management processes.

Other Perspectives

• While embedding performance management into a company's culture is important, it can lead to an overemphasis on metrics, potentially stifling creativity and innovation if not balanced with a culture that also values these elements.
• The assertion that performance management is essential for guiding a company's activities may overlook the fact that too rigid a focus on performance management can lead to short-termism and neglect of long-term strategic goals.
• Monitoring advancement towards objectives is crucial, but an over-reliance on performance management tools can create a checkbox mentality where employees focus on meeting metrics rather than the underlying quality of work or customer satisfaction.
• Integrating performance management into managerial responsibilities is important, but it can also create additional administrative burdens that may detract from actual managerial work, such as mentoring staff and strategic thinking.
• Creating a strong system to manage performance efficiently is a sound idea, but such systems can become complex and unwieldy, leading to inefficiencies and user frustration.
• Identifying and prioritizing key functions and tasks is critical, but there is a risk of becoming too inward-focused and missing out on external opportunities or threats that may not be immediately apparent through internal metrics.
• Setting objectives and establishing benchmarks is a standard approach, but it can sometimes lead to goal displacement, where the means become the ends and the original purpose of the objectives is lost.
• Vigilant oversight of performance metrics is recommended, but excessive monitoring can lead to micromanagement and a lack of autonomy for employees, which can be demotivating.
• Evaluating performance objectively is necessary, but there can be challenges in ensuring that the evaluation is truly objective and not influenced by internal politics or biases.
• Selecting appropriate metrics aligned with strategic objectives is wise, but there is a danger of selecting metrics that are easily manipulated or that incentivize the wrong behaviors.
• Utilizing performance measurement spreadsheets to set objectives can be helpful, but it can also lead to an over-reliance on quantitative data and the undervaluing of qualitative insights.
• Focusing on metrics that predict upcoming results is strategic, but predictions can be wrong, and an overemphasis on forecasting can lead to a lack of responsiveness to current issues.
• Crafting visually striking dashboards is useful for communication, but there is a risk that form may take precedence over function, leading to dashboards that are visually appealing but not particularly useful.
• Creating custom dashboards for managers is thoughtful, but it can result in information silos where different parts of the organization are not looking at the same data or interpreting it in the same way.
• Incorporating performance management within essential management procedures is a good practice, but it can also lead to a one-size-fits-all approach that does not account for the unique needs of different departments or teams.
• Emphasizing effective communication and educational growth is positive, but there can be a gap between the ideals of communication/education and the reality of their implementation in a busy work environment.
• Avoiding traps in performance management is crucial, but there can be a tendency to overcorrect and become too cautious, which can hinder the development of a robust performance management system.

Developing a comprehensive understanding and improvement of the company's principal components and factors that drive value by means of strategic planning and forward-looking estimates.

The foundational aspects of corporate governance are anchored in developing business strategies and crafting anticipatory financial projections.

Anticipating the outcomes of crucial business decisions is vital.

The author emphasizes the crucial importance of developing strong capabilities in financial forecasting, which is vital for guiding a company's future endeavors. Most financial decisions require an estimation of future business results and nearly all important decisions will be significantly influenced by assumptions about future performance such as revenue growth, product and market costs and expenses, asset requirements, cash flow generation, profitability, and the like. For example:

• Should we consider launching a new product?
• Should we go ahead with the purchase of this company?
• Is securing extra funding necessary?

The advancement of incorporating projected business outcomes into financial forecasts.

Creating financial projections that integrate a company's strategies, expectations, and potential scenarios is crucial for guiding and improving its performance. This approach has undergone significant changes, primarily because of market dynamics and the necessity to improve traditional budgeting practices. Alexander suggests that the process of budgeting has evolved, now serving as a more effective and insightful tool, which is currently referred to as the Operating Plan. The upcoming year's business operations are guided by a comprehensive action plan that sets financial goals for assessing performance over the plan's timeframe.

Organizations often need to adjust their performance forecasts while also developing the Operating Plan. In the current fluctuating and uncertain business environment, it might be necessary to revise the foundational premises of the Operating Plan prior to the conclusion of the year, taking into account new intelligence, significant events, changes in the marketplace, and the strategic actions and reactions of competitors, among other factors. Crafting and upholding a strategy for operations requires a significant commitment of time and resources. Organizations have improved their operational effectiveness and significantly reduced the effort required to update their financial forecasts by implementing continuous forecasting techniques that utilize readily accessible models based on key business drivers. We broaden the definition of 'business outlook' to encompass not just financial transactions but also a wider view of corporate functions. Businesses frequently revise their forecasts for operational outcomes, usually every month or every three months. The projection for on-demand services within the business sector is adaptable as needed.

Effective techniques for forecasting future financial results.

Concentrating on the key elements that influence performance.

Alexander emphasizes that creating financial forecasts goes beyond mere fiscal routines! It is essential that those responsible for achieving results are also involved in creating the forecasts, despite the common practice of these activities being managed and organized by the finance team. The author argues that a significant improvement in performance management can be achieved by shifting focus from traditional, complex annual budgets to the essential elements that influence performance. Alexander observed in the early 1980s that a once-thriving business encountered financial difficulties because its budgeting process, which was primarily financially oriented, began at the organization's most basic level, resulting in a multitude of adjustments that consumed a substantial portion of employee hours and ultimately resulted in less than optimal results.

Taking into account strategic objectives, the dynamics of market competition, and variations in pricing deepens the analytical process beyond just the numerical information.

When forecasting potential business and financial scenarios, it is essential to thoughtfully incorporate and modify a range of factors.

• Is the Operating Plan structured in a way that supports and enhances the strategic objectives and initiatives outlined in the Strategic Plan?
• How do the strategic maneuvers and potential countermeasures of rival companies impact each aspect of the financial projections?
• Was the scrutiny of the forecasts comprehensive enough to ascertain and evaluate the foundational premises?

Identifying the primary drivers of revenue growth is essential for forecasting a rise in profits. Does the growth result from the company's capacity to secure a greater share of the markets where it presently operates? Does the projection consider the company's growth into fresh territories and the potential market reaction to new offerings? Every assumption has unique implications for financial expenditures, the distribution of assets, and associated risks.

Assessing the key presumptions that include economic elements, market trends, and the variables related to expenses.

Jack Alexander advises performing a range of analyses that assess different scenarios and sensitivities to understand possible outcomes related to revenue, costs, and financial investments in projections.

The analysis examines the impact of changes in certain assumptions on the comprehensive strategy. What would be the impact on revenue if the actual prices turned out to be five percent lower than expected? How would the scenario change if copper's price increased by 20%?

Scenario analysis enhances the assessment of financial projections by considering a range of possible circumstances, including economic slumps or shifts in the market prompted by a rival's innovation, thereby providing a more comprehensive view of potential challenges and prospects.

The book delves into a range of techniques for analyzing potential outcomes and understanding their implications.

Forecasts spanning an extended duration are referred to as long-term projections (LTPs).

Addressing the unique challenges of measuring performance over an extended period.

Alexander provides managers with strategies for forecasting a company's long-term financial stability. The further forecasts project into the future, the greater the chance of encountering inaccuracies. Innovative disruptions and new products have the potential to significantly alter anticipated outcomes over a prolonged timeframe. Economic factors such as interest rates and government policies, which are frequently difficult to predict over an extended period, can also have an impact on the financial results of a business. Some experts question the value of detailed long-term forecasting and strategic planning, considering the inherent difficulties in predicting future occurrences with high precision.

Developing a framework that clearly demonstrates the economic outcomes of different strategic choices.

While acknowledging the difficulties and potential for error in creating financial projections for the long term, Alexander underscores their importance and usefulness in steering strategic choices and essential corporate judgments. The fundamental advantage of this initiative is rooted in the cerebral activity of planning, identifying, and evaluating crucial assumptions and elements that propel performance, along with devising and contemplating different potential strategies. The approach used is of greater importance than the specific numerical value.

The fourteenth chapter details the essential procedures for crafting long-term strategic plans, which include the following:

• Assess the current situation. Understanding the company's present condition is essential from the beginning.
• Identify the core problems associated with strategy. In the forecasting stage, identifying key strategic issues that may impact future results is essential to assess if there's a need to modify the company's strategic direction.
• Develop frameworks by identifying and incorporating key assumptions along with the main elements. Forecasts consider a range of elements including the state of the economy, competitive dynamics, pricing strategy approaches, and cost control measures.
• Evaluate a range of strategic alternatives and envision possible future circumstances. Pushing past the boundaries of

Other Perspectives

• While strategic planning and forward-looking estimates are important, they can sometimes lead to an overemphasis on prediction at the expense of adaptability and responsiveness to immediate challenges.
• Corporate governance should balance forward-looking activities with effective oversight of current operations and risk management.
• Anticipating outcomes is important, but over-reliance on predictions can lead to inflexibility when unexpected events occur.
• Incorporating projected business outcomes into financial forecasts is a complex process that can introduce significant uncertainties and may not always accurately reflect future conditions.
• Effective forecasting techniques are valuable, but they must be complemented by strong execution and operational capabilities.
• Focusing on key elements that influence performance is crucial, but it can also lead to overlooking less obvious factors that may become significant over time.
• Considering strategic objectives and market dynamics is important, but there can be a tendency to underestimate the impact of external factors such as regulatory changes or macroeconomic shifts.
• Assessing key presumptions is necessary, but assumptions can be flawed, and reliance on them can lead to strategic blind spots.
• Long-term projections are useful for strategic planning, but they can give a false sense of precision about the future, which is inherently uncertain.
• Measuring performance over an extended period is challenging and can sometimes lead to prioritizing long-term goals at the expense of short-term health and necessary pivots.
• Developing frameworks for different strategic choices is a sound approach, but it can become an academic exercise detached from the realities of the market if not regularly updated and tested against actual performance.