Performance Measurement: Where to start?
Professor Mike Bourne
Graham Bell
Performance measurement is a key management tool used in many
organisations. I am joined today by Professor Mike Bourne who is an expert
in this area. Mike, people often ask where do I start with a balance
scorecard or my performance measurement system, how do you respond to
that?
Mike Bourne
It’s an interesting question because it’s a question that people ask me a lot.
Start wherever it is most natural for you to do so. Organisations these days
are into divisions and corporate structures and often people say well do we
start right at the top, do we start at the divisional level, do we start at the
business unit level, and in fact it doesn’t matter. The real issue is whether
the level above you gets in the way of doing what you want. If you have got
your own discretion and control you can start at your level in the business
and then fit in with whatever comes down from above. But if the level above
has got a particular initiative that’s coming along and you are in the middle
of it that is the most dangerous point. So you have got to get this timing
right between what’s happening at each level of the organisation.
Graham Bell
So how would you handle then a situation where an initiative is started at
the business unit level but an initiative at corporate head office is then
instigated as well and is there a conflict there?
Mike Bourne
It depends exactly on the timing. The way I actually go about designing and
implementing performance measurement systems is to get the team
together and actually create one for themselves around what the strategy is
and how they are going to implement it in their part of the business and that
is a very personal thing for the team involved. If the initiative comes in the
middle of that that is the biggest cause of performance measurement or
balance scorecard failure because it disrupts that initiative. If on the other
hand the team have got through that and actually have the bones of what
they are going to use into the future, a corporate initiative can actually
benefit from that initiative because what happens is the goals come down
from corporate level and everybody goes okay we can see those goals now
we can actually fit them into what we are doing in the organisation. Just a
quick story many years ago I worked in the airline catering industry and we
had kitchens at Gatwick and Heathrow and our head office was in
Washington and one bright sunny morning they sent us a performance
measurement system they wanted us to implement and at Heathrow they
picked up the measures and just put them in and at Gatwick I remember
sitting round the table with the team and there they said nobody in
Washington knows how to run a kitchen and we went off and did three half
day workshops and we created our own performance measurement system.
The surprising thing was that it was absolutely identical in all but one aspect
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to what had come down from head office but the fact we had actually gone
through it ourselves made us own that performance measurement system
and when it was implemented in Gatwick it was a lot more successful and a
lot more useful and a lot more owned by the local management and that’s
what you want in performance measurement and performance
management.
Graham Bell
Mike thank you some useful pointers there for anybody implementing
performance management.
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