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| What about the Customer? Financial Reporting still dominates the Boardroom |
May 14th 2007 |
A Deloitte Survey Report released last month reports what many of us process and change management professionals know only too well - that financial measures still dominate organisational performance reporting. The more 'softer' non-financial measures such as customer satisfaction , operational performance, innovation, and employee commitment are recognised by the respondents as "key drivers of performance" even though they lack the ability to measure them. Interestingly, while companies indicated their awareness of the importance of non-financial measures, it seems that their ability to measure them are critically inadequate - "existing performance measurement frameworks are inadequate" states the report. Of course it is not about replacing financial measures with the non-financials; rather it is about achieving an appropriate balance between them - a balance that in my mind must consider short-term and long-term measures, internally-focussed and externally-focussed, as well as financial and non-financial.
In many ways the report parallels the imbalance I have witnessed between traditional process improvement programmes (project-based, financially-driven, short-term) and contemporary process management deployments (process-based, long-term, holistic). It is about achieving the balance between forward-looking lead-indicators and backward-looking lag indicators. They are both required but often seems at odds and unfortunately the latter seems easier to measure. Read more on this in BPM and PI: Business Performance Partners (Part 1).
There is some progress however, with the report noting a trend of some leading organisations to include non-financial measures as pat of their employee recognition, company annual reports and shareholder briefings. Much work still for us process professionals seeking to embed pro-active process and performance management systems into business. You can read the press release and download the full report here.
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