Firms strive in pursuit of their goal of maximizing investors’ wealth.  They formulate strategies to reach their goal. Purpose of the strategy is to achieve the goal of the firm. Well formulated strategy needs to be implemented to the hilt. The best thought-out strategy in the world is not worth the paper they are written on if you cannot pull them off. So firms have been making dramatic changes to their business processes to implement their strategy. These changes are intended to make radical improvements in the firm’s competitiveness. These changes improve quality, reduce lead-times, reduce costs and enhance flexibility in processes. These changes are brought into focus to create a better future for the firm. These changes turn out to be the “flavor of the month” because the performance measures are not modified to ensure the sustainability. After all people behave in the way their performance is measured.

However, firms need to carry the people along to achieve their strategy. People behave in the way their performance is measured. Role of a performance measurement system (PMS), therefore, is strategy implementation.  PMS has to align itself to strategic planning, budgeting and resource allocation and leads to evaluation and reward.

 

More often than not, the goal of the firm and that of the people running the firm are at conflict. There are conflicts amongst the departments. The reason is three fold – first, the individual’s aspirations conflicting with his set goal; second, a lack of alignment of the individual goal to the firm’s goal and third, inherent anachronism between strategy and performance measurement; strategy is for the future while performance measurement is for the past.

These conflicts get compounded with a general lack of awareness among operating managers that “for every action there is a financial reaction”. Operating management may not understand the link between their actions and its impact on the bottom line performance of the firm. 

We help organisations to:

  1.  Model their Organisation Structure to meet the business needs
  2. Align the divisional performance to the organisational goal using Balanced Score Card enabled with X Matrix.

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