BP Blog 2

Performance measures

This spring when the weather started to improve, I found myself walking to and from school. These walks provided me not only with a source of much needed exercise but with an opportunity for me to reflect. Reflection was an activity that I had not paid much attention to in my life up until this spring. However I quickly found that once I started reflecting on my personal life I felt much more stable and ready to face new challenges that might arise in my future.
On these walks I would reflect on things such as my personal goals (short and long-term), how I dealt with difficult situations that I had recently faced. I would also often analyze novels that I had recently read and paintings that I liked. I found thinking and analyzing all of these situations allowed me to “perform” better as student, a sister, and as…well, Candice.
As one of the great economists of the 21st century, Friedrich August Hayek said in his book The Road To Serfdom;
“Yet, although history never quite repeats itself, and just because no development is inevitable, we can in a measure learn from the past to avoid repetition of the same process”[i]
This quote is relevant for individuals, communities, countries, and even business. Evaluating and measuring past performance is vital for the success of the company. When evaluation, analysis, performance measuring is conducted after a project is completed, a milestone is met, or a target is reached, the individuals involved and individuals associated with the project and/or company may learn from the past experience of this particular project.
However just analysis the situation may not be adequate for many businesses. Certain businesses may want or need and aid to help them makes sense of what they are trying to analyze. One tool they may use is the balanced scorecard.
A Balanced Scorecard is “concept for measuring whether the activities of a company are meeting its objectives in terms of vision and strategy”[ii]. There are many providers of balance scorecard software, however no matter which one you choose they all measure four basic criteria: finance, customer satisfaction, learning and growth, and the business process. Using a balanced scorecard will allow businesses to asses where they stand in regard to the four major themes listed above, and allow them to make adjustments and improve in order to reach their business goals.
Another way in which business may assess their progress is through “key performance indicators” (KPI). KPI is “a financial and non-financial metrics used to quantify objectives to reflect strategic performance of an organization”[iii]. KPI uses targets and objectives to measure performance. For example “by June 30,2008 our customer base will be 20,000.” The customer base is the KPI. In my opinion this is simple easy way to measure performance in any company small or large. Ma and Pa business may use this method, as well as large conglomerates like GE.
Regardless of whom you are and what you do, individual or large enterprises, having a means of measuring your performance will always benefit the persons involved. And I feel will also reward the individuals performing as they will feel a sense of accomplishment when success is met in specific reaching goals, and performance has been measured and they know what they can change for next time round.

[i] The Road To Serfdom, Friedrich August Hayek, The University of Chicago press, ©1944
[ii] http://en.wikipedia.org/wiki/Balanced_Scorecard, 10/3/2007
[iii] http://en.wikipedia.org/wiki/Key_performance_indicators, 10/3/2007