subsequently reduced to the 12 metrics that best indicated operations

Subsequently reduced to the 12 metrics that best

This preview shows page 13 - 15 out of 20 pages.

subsequently reduced to the 12 metrics that best indicated operations’ contribution to the company’s overall strategic objectives. Companies can use a driver tree analysis to determine the relevant lower-level drivers of these metrics. Use simple measures to report performance; make processes easy for senior management to understand and act on. For example, use exception-based reporting as opposed to creating indices or aggregated metrics. Evolve metrics over time to match changes in strategy and desired operational outcomes. Establishing periodic reviews can help ensure that these tight links are maintained. 2) How to measure? Answering this question requires first answering a number of others: What technology and tools should be used, and how granular should the capabilities be? How should the relationship between strategic and operational metrics evolve? What is the linkage to the planning and budgeting cycle? Addressing these questions will enable operations to implement their performance measurement program. A phased approach that starts small and evolves through time is most appropriate ( see Exhibit 5, next page ). Best practices for determining how to measure: Ensure that the metrics developed can be easily collected through existing processes and systems. If they can’t, develop a plan for collecting and using the metrics. For example, when we developed the performance measurement program for a global investment bank, we categorized the metrics’ “go-live” time lines into three buckets: less than one month, one to six months, and more than six months. We then created detailed plans to operationalize the metrics for the first two buckets; based on results in the initial phases, we later did the same for the third. Rather than determining metrics based on the tools that are available or the suggestions that vendors offer, first determine which metrics would be most useful and then find the tools to capture them. Develop the capability to measure the quality of a process when failure is not an option. For example, effectively measuring the security of corporate systems may require measuring not only
Image of page 13

Subscribe to view the full document.

14 Strategy& Source: Strategy& Exhibit 5 Putting the performance measurement program into operation Process steps Develop tools Link strategic and operational metrics – Calculation done manually using built-in Excel functions – Targets not set; performance measurement metrics are used as “state of the union” and for marketing – Informational targets for managing divisions and metrics linked to planning and budgeting cycle – Calculation done using macros, SQL queries – Strategic metrics reported evolve with data availability and experience Targets drive planning and budgeting process ; metrics linked to planning and budgeting cycle and enforced – Linkages between strategic and operational metrics created – Calculation fully automated and integrated with the reporting tool – Further evolution of strategic metrics
Image of page 14
Image of page 15
  • Fall '17

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes