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    This resource explains how businesses should use Statistical Process Control (SPC), which provides a way to understand the variations found in every process, including business processes that involve Key Performance Indicators (KPIs).

    Using an actual business case scenario, the article shows how businesses can discern whether the numbers 1) hint at a stable or unstable process, 2) indicate variation that is inherent to the process or outside the process, 3) call for a process change in order to get better results, or 4) require businesses to identify the actual cause and take corrective action.

    To illustrate, the article looks at a typical cumulative year to date indicator, which is compared to a target and the traffic light associated with it. Two hypothetical situations are used to explore what the cumulative traffic light position would report and what an SPC chart based on individual months might show.

    Through hypothetical situations, the article points out that the key difference between traffic light assessment and SPC is attention versus action. Traffic light assessment can give an indication of where attention might be placed. SPC can not only suggest where attention might be placed but also play a key role in determining what action might be appropriate.

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    This resource is a diagram that identifies and defines the key elements necessary for successfully realizing the goals of Enterprise Performance Management (or Corporate Performance Management) in a knowledge-based organization.

    The two main goals are identified as 1) improving how managers think and act and, 2) the effective deployment of change. The four elements or critical success factors contributing to the achievement of these goals are 1) Performance Measurement, 2) Decision Support, 3) Problem Analysis, and 4) Process Improvement.

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    This resource is the famed Deming’s 14 Points for Management.

    Dr. William Edwards Deming was an American statistician, college professor, author, lecturer, and consultant. Deming is widely credited with improving production in the United States during World War II and is well known for his work in Japan, where he made a significant contribution to the country’s capability to manufacture innovative high-quality products.

    As a quality guru, Deming was the author of Out of the Crisis: Quality, productivity and competitive position (1982 and 1986) and The New Economics for Industry, Government, Education (1993), which includes his System of Profound Knowledge and the 14 Points for Management, which are key principles for top management for transforming business effectiveness.

    Identified to serve as a basis for transformation of industry, adoption of the 14 points and action based on them are a signal that management intends to stay in business and aims to protect investors and jobs. The 14 points cover key aspects of performance measurement and performance management and apply to small organizations as well as large ones, to the service industry as well as manufacturing, and even to a division within a company. 

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    In this article, author, management consultant and Balanced Scorecard expert Paul Niven points out that measurement is at the heart of all organizational activity and a variety of performance measures are used to gauge success. However, measurement is in a deficient state today and is even among the weakest areas of management.  

    The article examines why this is so and finds the answers in the three challenges that organizations face – the limitations of financial measures, the rise of intangible assets, and the difficulty of strategy execution.

    Financial measures are tantamount to driving our car by the rearview mirror because they provide a great view of where the organization has been but little guidance for the road ahead. Thus, what organizations need is a performance measurement system that balances the historical accuracy and integrity of financial measures with the drivers of future financial success.

    Secondly, in the world of business, its things like employee knowledge, databases full of rich information, and cultures of innovation and change that really drive value. Traditional financial measures have a very difficult time tracking these new intangible assets. Today’s situation calls for a new performance measurement system that sheds light on the value of intangibles and allows us to predict and drive future economic success.

    Finally, while most organizations are capable of developing the right strategies, getting strategy execution right continues to be the greatest challenge. Organizations need to understand the enablers of strategy implementation and be able to set them in motion to realize the results they seek.

    The Balanced Scorecard, with its Strategy Map and four strategic perspectives, is a framework that helps organizations successfully respond to these challenges. In the article, the author shows how and uses a case example to illustrate the use of the Balanced Scorecard for driving focus and alignment.

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    In this article, author, management consultant and Balanced Scorecard expert Paul Niven points out that even the most well constructed Balanced Scorecard will not instantly transform an organization.

    For the Balanced Scorecard to deliver positive change, it must be embedded in an organization’s management systems and become the cornerstone for management analysis, support, and decision-making. This requires that organizations determine exactly why they are embarking on a Scorecard program in order to ensure the Scorecard functions as a management system.

    The author discusses possible reasons for launching a Balanced Scorecard program and cautions that every organization must necessarily determine the precise motivation for launching the Balanced Scorecard. This motivation must emerge out of every organization’s particular circumstances.

    A failure to develop a clear and guiding rationale for the Balanced Scorecard creates problems for organizations – fuelling confusion, cynicism and suspicion. On the other hand, a well understood, agreed upon, and widely communicated rationale for the Balanced Scorecard program can help organizations overcome difficulties that will be encountered during implementation and ensure the success of the Balanced Scorecard initiative as a performance management system. 

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    In this article, author, management consultant and Balanced Scorecard expert Paul Niven examines the relevance of ‘execution’ – a term that is very much in vogue on the business landscape – for those involved in strategy implementation and the Balanced Scorecard.

    The author presents three important arguments. Execution is a discipline integral to strategy, a core element of an organization’s culture, and the major job of the business leader. In fact, these are organizational imperatives, argues the author.

    The key to unlocking the true potential of the Balanced Scorecard framework to transform business lies in using the information stored within strategy maps and performance measures. This calls for significant discipline and is an area where many organizations fail.

    Nothing is more important for business leaders than executing strategy and the Balanced Scorecard is a powerful and proven tool that helps business leaders do just that. Leaders need to throw their full weight behind the execution of strategy and Balanced Scorecard programs.

    Finally, execution is a core element of an organization’s culture – a set of tangible and intangible elements that represent ‘the way things are done’ in that organization. The Balanced Scorecard helps organizations learn about their strategies and get execution right so that performance becomes pervasive in the organization.

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    In this article, author, management consultant and Balanced Scorecard expert Paul Niven argues that the discipline of Cost Management must evolve to face the realities of the new economy and meet the rapidly changing information needs of today’s decision makers. Cost Management, like finance, is finding out that the new mandate calls for providing the information companies need to produce the value their customers demand.

    A focus on the importance of performance measurement is an integral component of the evolution Cost Management is undergoing. In this context, the Balanced Scorecard has emerged as a proven and effective performance measurement tool as organizations seek to succeed at strategy implementation and translate intangible assets into real value for stakeholders.

    The author examines how the combination of Balanced Scorecard measures and Cost Management techniques can work together in satisfying the ever-growing needs of the information consumer.

    While Cost Management is a key aspect of the Financial strategic perspective of the Balanced Scorecard, it has a role to play through the entire Scorecard architecture. The author shows the relevance of Activity Based Costing in the other three strategic perspectives – Customer, Internal Process, and also Employee Learning and Growth – to identify and implement the right strategies for aspects like profitability of customer segments; quality, timeliness and cost of current processes; and investments in employee skills, tools, and alignment programs that promise to deliver a range of benefits.

    Thus, the Cost Management discipline can use the Balanced Scorecard to provide critical information and facilitate many of the strategic dialogs in organizations.

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    Management writer and educator James Creelman is, in the words of David Norton, co-creator of the Balanced Scorecard, ‘the foremost chronicler and historian of the Balanced Scorecard movement.’ Author/co-author of 16 important management reports and books, James Creelman answers a question about how to get the right balance of strategic objectives in a Strategy Map, so that it does not become unmanageably complex or far too simple with no meaning.

    Creelman responds that the greatest value of strategy mapping is that it provides the opportunity to identify the critical few strategic capabilities and relationships that will really make the difference in delivering the strategy. He observes that this is a great challenge in practice. So, organizations opt for generic objectives or ignore strategically critical objectives. The result is a poor Strategy Map.

    At the same time, trying to capture all the causality makes the Strategy Map too complex, confusing and inappropriate as a day-to-day strategy management tool.
    Drawing on examples such as Saatchi & Saatchi Worldwide, Creelman then presents the outlines of a solution that bring together 1) the beauty of simplicity so that the Strategy Map offers a laser focus, is easy to communicate and inspires, and 2) still captures the primary drivers of strategy. He also points out that organizations should focus on stressing the relationships between groups of strategic objectives or between strategic perspectives so that the real dynamics of value creation in the marketplace are captured adequately.

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    It is an acknowledged fact that the active support and involvement of the senior management team is the most important success factor in an enterprise performance management or Balanced Scorecard initiative. So influential is this success factor that the creators of the Balanced Scorecard initiative have made ‘mobilizing change through executive leadership’ one of the five principles for building a strategy-focused organization.

    This article goes further to say that the single most important scorecard success criterion is the active support and involvement of the Chief Executive Officer (CEO), because it is the CEO who is ultimately held accountable for the success or failure of strategies. The CEO has to lead from the top and reengineer the management process from within the organization. Further, the CEO and the senior team collectively own the strategy. When the CEO and senior team fail to own the initiative, the Balanced Scorecard becomes merely one more performance improvement tool among many.

    The article also asserts that design of the scorecard is also the responsibility of the CEO and the senior management team.
    Drawing on case studies such as Saatchi & Saatchi Worldwide, the article discusses at great length the role played by the CEO and senior team in different organizations to champion a scorecard initiative. In particular, they play an all-important role in defining the strategic objectives and strategic initiatives. Only when this role is fulfilled can organizations expect to realize the potential of the Balanced Scorecard as a tool for organizational transformation and breakthrough performance. Then, the Balanced Scorecard becomes a true strategy management framework.

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