Measure Success by Looking Forward
If a company is always looking backward and measuring against the past, there is a good chance they will run into stuff that is right in front of them. Company decisions need to be made with a vision looking forward. Measuring forward helps look at risks and challenges from a different place as well. Looking backward never allows you to see black swans and potentially disruptive technology that may be right in front of you.
Can you imagine the gaming that takes place when you set performance bonuses based upon prior year results? In the vendor sales world, how do you manage for the loss of a major account? Too many times I have seen situations where management forgives that loss and pays the bonus anyway. The company lost the sales but the salesperson won. That makes no sense to me. Although to be fair, I, myself, have authorized those bonus payments. Call me a softy or an idiot, if you like. I wonder what the duck would think.
The fact is that if we paid out based on the competitive condition and advantage gained over the competition, we all would have lost the same account in the same markets, and the best sales organization would have won back the lost business. That sales organization should be rewarded and the others should not.