Summary

In this article – the third of a four part series – author, management consultant and Balanced Scorecard expert Paul Niven discusses the need for an Internal Process Perspective in a Balanced Scorecard. The other three parts focus on the Financial, Customer and Learning and Growth perspectives.

The author begins by pointing out that, with the Internal Process perspective, the focus of performance management shifts from the “what” of value creation to the “how” of value creation. Specifically, the Internal Process perspective describes how an organisation will achieve outcomes envisioned in the Customer and Financial perspectives.

Summary

In this article – the second of a four part series – author, management consultant and Balanced Scorecard expert Paul Niven discusses the need for a Customer Perspective in a Balanced Scorecard. “The remaining two parts focus on the Internal Process, and Learning and Growth perspectives.”

The author begins by discussing the explosion in the options available for a consumer’s choice. A century and more ago, producers of goods and services enjoyed great power over customers who had extremely limited choices in the market. Today, the scenario has reversed, with customers exerting far greater power in the purchase transaction. Technologies like the Internet increase customer knowledge and insight and deliver greater bargaining power to customers. This makes it absolutely vital for companies to have a well-defined Customer Perspective.

Summary

In this article – the first of a four part series – author, management consultant and Balanced Scorecard expert Paul Niven discusses the need for a Financial Perspective in a Balanced Scorecard. The other three parts focus on the Customer, Internal Process and Learning and Growth perspectives.

Typically, the mission and vision statements of organisations do not refer to their financial aspirations. However, companies need to have a Financial Perspective so that they can answer shareholders who require a return on their investment.

Companies must ensure that a focus on customers also leads to improved financial results. Financial performance also enables investment in people, processes and technology so that customers can be served successfully.

So, how do companies know if they are performing well financially? The Financial perspective of the Balanced Scorecard gauges financial success from the perspective of a company’s shareholders and gives the company the tools to track success over time.

Summary 

When it comes to enterprise performance management and improving organisational performance, organisations have a bewildering array of approaches, frameworks, methodologies and models to choose from. Two of the most popular approaches are the Balanced Scorecard and the EFQM Excellence Model, which was created by the European Foundation for Quality Management.

This resource is a case study of Inland Revenue, an experienced user of the EFQM Excellence Model, and was created when the Balanced Scorecard was introduced in the organisation.

Summary

This resource is a case study of Inland Revenue, an experienced user of the EFQM Excellence Model, and was created when the Balanced Scorecard was introduced in the organisation.

The Part 1 of this 3 series article looked at the literature on the use of both models and the limited literature on combined use. Part 2 shows how internal research with senior directors and the department’s quality community was then undertaken to form a benchmark for any recommendations. The main research was conducted with four comparator organisations who are all noted users of excellence models and the Balanced Scorecard.

Summary

The paper demonstrates how EFQM and Balanced Scorecard models can be used together in a manner that maximises the strengths and minimises the weaknesses in the use of each. The paper also identifies critical success factors and the kind of broader strategic management frameworks necessary for successful use of the EFQM Excellence Model and Balanced Scorecard.

The final part of the series concludes by suggesting that the best practice is to use the models in a strategic management process based on solid Plan, Do, Check, Act principles actively managing the organisation.

Summary

Focused measurement of performance in the right areas plays a big role in successful performance management. However, issues like data overload, a misguided focus on routine variation, and the lack of an overarching framework that connects people, departments and operating units undermine performance measurement and performance management.

This resource, a case study, describes how the Automobile Association of the UK successfully tackled many of these issues and went on to set a new industry benchmark and provides its customers with the highest level of satisfaction of any major provider, according to the JD Power’s UK Roadside Assistance Study in 1999, involving 25,000 drivers.

Summary

The ultimate goal of enterprise performance management is to create a high performance culture. This brings into sharp focus the way companies actually manage people. Even today, however, HR managers are unable to prove the contributions they make to their companies and are hence, not a part of management teams. In this context, the article argues that a new role needs to be defined for the HR function.

The article traces the origins and development of personnel administration. Frederick Taylor’s principles of scientific management dictated the way jobs and work were defined and managed. Later, companies began to believe that a concern for employee welfare would translate into increased worker efficiency. The quality management movement carried forward this philosophy, by recognizing the importance of frontline workers in quality and consumer service.