Effective & Meaningful Performance Measurement

By Stainer, Alan | Management Services, October 1996 | Go to article overview
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Effective & Meaningful Performance Measurement

Stainer, Alan, Management Services

This two-day conference was organised by IIR Limited. The speakers were drawn from both service and manufacturing industries, embracing large and small organisations, as well as consultants. Over the two days, the conference was ably chaired by Dr John Peters, editor of the TQM Magazine and Brian Plowman director of Develin & Partners.

The major theme of the conference was customer-driven business improvement related to performance measurement and total quality management. The underlying thrust was to align performance measures with business strategy in three distinct ways. Firstly, organisations would need to select performance indicators appropriate to their key business aims. Secondly, they should integrate performance measurement into their business processes and make it part of their corporate culture.

Thirdly, and lastly, they should develop performance yardsticks which are directed at customer needs and foster customer satisfaction.

In the field of finance, Ivor Caplin, quality manager (sales & marketing) of Legal & General, described how his organisation analyses itself and determines areas to aid the achievement of its key business targets. He stressed the fact that his organisation constantly monitors performance through measurement because, if they fail to carry it out, they would be unable to develop new products and retain their financial standing. Their philosophy of continual improvement is at the heart of what they aim to achieve. Such reasoning was underlined by Alan Mosedale, quality director of Barclays Bank. He discussed the re-engineering management thinking, addressing the history and challenges of change at Barclays, especially in relation to quality and customer service. He also spoke about overcoming the problems which are inherent in trying to measure and control less the tangible aspects of banking processes.

From a management consultancy perspective, the linking of performance indicators with strategic goals were expounded by Andrew Mosely, principal consultant of Metapraxis, and Brian Plowman, director of Develin & Partners. The former developed a simple schematic of the performance management processes called the business control cycle with its six stages: measurement, analysis, dialogue, commitment, action and results. The latter used for his presentation a case study in the electricity industry to illustrate how an activity based costing approach can provide data to understand how to link performance measures (and their relevance) to the business aims. Complementing this methodology, Dr Terry Clarke, an independent consultant in business performance improvement and quality management, discussed the influence of benchmarking as a most powerful tool for effective business performance. Benchmarking can be defined as a systematic comparison of elements of the performance of an organisation against that of other organisations, usually with the aim of mutual improvement.

With regard to the service industries, two interesting and contrasting approaches were presented. The first was by Geoff Roberts, change agent of Yorkshire Water, who gave a strong defence of his organisation's performance measurement and achievements. He stressed that all members of the organisation were involved at each stage of the process to ensure customer implementation and review, giving particular emphasis on the cultural challenges of introducing such a significant initiative. The second was delivered by Dennis Hylton, quality and customer service trainer of Granada. He put forward the Granada philosophy in developing performance measures which address customer needs and foster customer satisfaction.

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