16 March Balancing Objectives and Measurements (...discarded.)

[Paul Terlemezian]

Running a business is complicated. Running a business inside another business is complicated to an exponential level. Focusing on a single measure - for example profit or ROI - is noble -but it may also be based on subjective assumptions which could lead to unintended outcomes.

 

Drucker proposes a balanced approach based on 8 measures:

 

Market Standing

Innovation

Productivity

Physical and Financial Resources

Profitability

Manager performance and development

Worker performance and attitude

Public responsibility

 

These are difficult to measure and are also subjective - but they reflect a balance. It would be useful for the corporate training organization to focus on these 8 measures. These reflect the business language and the business acumen that must become second nature for us.

 

Our challenge is exponentially more difficult because we are a business within a business. This means that we need to look at these 8 measures from a department perspective and also from the persepctive of how we service the corporation that we function within.

[Paul Terlemezian]

Profitability is relatively easy to measure - and while important - may become too important in "lazy" organizations.

Another way to look at these is to group them into 2 categories:

1. Value to the customer

2. Efficiency of the enterprise

and then create (vs. measure) Profitability by maximizing value through efficiency innovations and seeking ways to increase efficiency through value innovations.

Is it possible to challenge ourselves by asking:

How can we increase value efficiently?

How can we become more efficient while increasing value?