To consider the question of whether or not a complex enterprise is achieving its best possible performance, a system of measures helps a CEO to reach into her enterprise to understand how well it and its parts are performing in the real world. If a CEO can devise an appropriate framework of measures, she has the capacity to ask the right questions from any level in the organisation that drive the desired behaviours and actions across the main human activities of the enterprise, but not limit their actions.
Most socio-technical organisations will have a hierarchy of primary inter-related functions. This paper examines the question of how to structure the crucial measures to achieve this outcome? It presents a theoretic viewpoint to begin with followed by a brief insight to how this was applied in developing a first-principles approach to capability management in the Royal Australian Navy.