In Kenya, medium sized service firms are major contributors of employment and economic
development. However, low transition rate among medium sized service firms in Kenya has remained a
major concern as more than 90% of these firms fail to transition to large firms as expected. This has
been attributed to inadequate strategic capabilitiesresulting from use of inappropriately designed
strategic measurement systems. Specifically, use of measurement systems, which lack adequate depth to
elicit critical information for strategic decision-making. An in-depth performance measurement system
is necessary for probing deeply to uncover new clues, open new dimensions and secure vivid, accurate
and detailed accounts.This descriptive study examined the effect of depth of the strategic measurement
systems on performance of medium sized service firms in Kenya. The target population for this study
was 2,039 medium sized service firms registered by Nairobi City County, Kenya and the sample size was
323 firms selected by stratified random sampling design. A standardized questionnaire was used to
collect primary data from the chief executive officers of the sampled firms.The study showed that depth
of strategic measurement system has a weak but statistically significant positive effect on performance of
medium sized service firms in Kenya. The findings further indicated that majority of the firms focus on
measuring operational efficiencies of activities considered important across departments. The study also
showed that majority of the firms do not use disaggregated measures and mostly set strategic priorities
for managers and employees without empowering them to control factors influencing their performance.
Moreover, reporting of performance measures was not as frequent in most firms as most reports were
generated only once a monthly. The study recommends that managers of medium sized service firms
should promote carefully balanced disaggregation of measures. Further, they should set strategic
priorities for managers and employees based on factors they can control. Moreover, frequency of
measurements should be increased to capture the emerging issues. However, managers of these firms
should not focus so much on highly detailed measurement systems because too much emphasis on detail
would only serve to prolong the implementation of the strategic measurement system with minimal
marginal increase in performance. Instead, the management of medium sized service firms should focus
on comprehensive and integrated measures, which covers all critical parameters of the organization