Nobody sets out to be a bad CEO, run a dysfunctional organization, or create a massive bureaucracy that grinds her company to a screeching halt. Yet … - Ben Horowitz

Bill Campbell developed an excellent methodology for measuring executives in a balanced way that will help you achieve this. He breaks performance down into four distinct areas:

In peacetime, leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives. In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission.

I tried to make myself feel better by asking, “What’s the worst thing that could happen?” The answer always came back the same: “We’ll go bankrupt, I’ll lose everybody’s money including my mother’s, I’ll have to lay off all the people who have been working so hard in a very bad economy, all of the customers who trusted me will be screwed, and my reputation will be ruined.” Funny, asking that question never made me feel any better. Then one day I asked myself a different question: “What would I do if we went bankrupt?” The answer that I came up with surprised me: “I’d buy our software, Opsware, which runs in Loudcloud, out of bankruptcy and start a software company.” Opsware was the software that we’d written to automate all the tasks of running the cloud: provisioning servers and networking equipment, deploying applications, recovering the environment in case of disaster, and so forth. Then I asked myself another question: “Is there a way to do that without going bankrupt?