Handbook of Corporate Performance Management

MIKE BOURNE is Professor of Business Performance and Director of the Centre for Business Performance at Cranfield University's School of Management. Before joining academia, Mike spent 15 years in business, with roles in production management, strategy and acquisitions, HR, and general management. He gained his PhD from the University of Cambridge. His current research focuses on corporate performance measurement and management and he has spent the last fifteen years working with companies supporting senior management teams through the process of designing, implementing and using performance management techniques. He has worked with, and been consulted by, a number of organisations including Accenture, Amadeus, BAe Systems, DB Schenker, European Central Bank, Lloyds TSB, McCormick Europe, NHBC, Oki Europe, PWC, Schering, Thales, Tube Lines and Unilever. He has authored over 100 publications and speaks internationally on the theme of business performance. PIPPA BOURNE is Regional Director for ICAEW, the membership organisation supporting Chartered Accountants around the world. She has an MBA and is a chartered marketer and has experience in marketing and general management roles. In her early business career she held marketing roles in research and analysis. Following this she ran a number of successful profit centres within a university and professional bodies. She used the Balanced Scorecard to enable a culture change within one of these organisations, refocusing the business and improving performance. She is the co-author of Balanced Scorecard – Instant Manager, Balanced Scorecard in a Week, Achieving High Performance, Motivating People and Change Management in a Week, and was an editor of the journal Measuring Business Excellence.

"All in all, an interesting side-lecture if you want to take a break from the heavy figures finance book." (doitinvest.com, March 2012)

• Preface xiAcknowledgements xiiiIntroduction xv1. Performance and the Role of Measurement 11.1 Introduction 11.2 What is good performance? 11.3 Whose perspective? 11.4 Making comparisons 21.5 Present success and future sustainability 31.6 How is performance delivered? 31.7 The roles of a performance measurement system 51.8 The focus of measurement 71.9 The role of management and leadership 91.10 In summary 10Further reading 102. Practical Tools for Measuring Performance 132.1 Introduction 132.2 Elements of a performance measurement system 132.3 The Balanced Scorecard 152.4 The Performance Prism 192.5 Objectives and success maps 202.6 Designing measures 242.7 Summary 30Further reading 313. Designing the System 333.1 Introduction 333.2 A four phase life cycle 333.3 Design 343.4 How is this done in practice? 343.5 The debate 353.6 Developing the success map 373.7 Developing the measures 393.8 The next stage 40Further reading 404. Managing Implementation 414.1 Introduction 414.2 Phases of implementation 414.3 Why does implementation succeed or fail? 414.4 Hurdles and blockers 454.5 Steps to successful implementation 464.6 Conclusion 48Further reading 485. Assessing and Managing Change 515.1 Introduction 515.2 Change in context 515.3 Assessing resistance to change 535.4 Return on management 545.5 Assessing likelihood of implementation 555.6 Conclusion 58Further reading 586. Target Setting 596.1 Introduction 596.2 Why do you set targets? 596.3 Ten common problems 606.4 The target setting wheel 626.5 Closing remark 65Further reading 657. Linking Rewards to Performance 677.1 Introduction 677.2 Pitfalls 677.3 Linking rewards to performance 717.4 Examples 757.5 Summary 78Further reading 788. Managing with Measures – Statistical Process Control 818.1 Introduction 818.2 Variation and our reaction 818.3 Statistical process control 838.4 Performance and performance improvement 91Further reading 929. Using Measures – Performance Reviews 939.1 Introduction 939.2 The Performance planning value chain 939.3 Performance reviews 99Further reading 10410. Using Measures to Manage – Challenging Strategy 10510.1 Introduction 10510.2 Company examples 10510.3 Testing success maps in practice 10910.4 Testing in theory and practice 11310.5 Behavioural issues 11710.6 Conclusion 118Further reading 11811. Keeping Your Measurement Process up to Date 11911.1 Introduction 11911.2 Keeping the process up to date 11911.3 When do you update targets? 11911.4 Revising measures 12211.5 Reviewing the measures in line with your success map 12311.6 Reflecting on your strategy 12411.7 Challenging strategy 12511.8 Overcoming barriers to updating your system 12611.9 Summary 133Further reading 13312. Measuring Performance of People 13512.1 Introduction 13512.2 Essential elements for high performance 13512.3 Measuring employee satisfaction and engagement 13612.4 Performance appraisals 14112.5 HR performance measures 14512.6 Acting on results 147Further reading and sources of information 14713. Measuring Customers 14913.1 Introduction 14913.2 What are you measuring? 14913.3 Using customer feedback 15713.4 Summary 160Further reading 16114. Measuring Process Performance 16314.1 Introduction 16314.2 A process framework 16314.3 Process measurement 16414.4 Key process measures 16514.5 Summary 169Further reading 16915. Measuring Competence and Resource Development 17115.1 Introduction 17115.2 Defining terms 17115.3 Why measure resource and competence development? 17215.4 A framework for displaying the relationship between 176resources and competences15.5 Conclusion 183Further reading 18416. Measuring Financial Performance 18516.1 Introduction 18516.2 A shareholder perspective 18616.3 Key shareholder ratios 18916.4 Accounting ratios 19116.5 Management ratios 19416.6 Conclusion 196Further reading 19617. Measuring Sustainability 19717.1 Introduction 19717.2 What are ‘sustainability’ and ‘corporate responsibility’? 19717.3 What are the benefits? 19917.4 Building sustainability into your business 20117.5 Conclusion 206Further reading and sources of information 20618. Creating a Culture of High Performance 20918.1 Introduction 20918.2 Creating the right environment 20918.3 Creating the right culture 21018.4 Recruiting the right people 21218.5 What motivates? 21418.6 Dealing with underperformers 21518.7 Understanding your influence 21618.8 Direction setting and engagement 21718.9 Communication 21818.10 Conclusion 219Further reading 21919. Leadership Vignettes 22119.1 Introduction 22119.2 Paul Woodward – Chief Executive, Sue Ryder Care 22119.3 PY Gerbeau – Chief Executive, X-Leisure 22319.4 Richard Boot OBE – IRC Global Executive Search Partners 22519.5 David Child 22719.6 Baroness Sally Greengross 22919.7 Charles Carter 23119.8 Nigel Bond – CEO, Domino Printing Sciences 23219.9 Mark Lever – CEO, National Autistic Society 23619.10 Mike Ophield 23919.11 Andy Wood – Chief Executive, Adnams plc 24220. Bringing It All Together 24520.1 Introduction 24520.2 Performance measurement 24520.3 Performance management 24620.4 Performance leadership 248Further reading 251Index 253