Is your organisation getting what it needs from its existing performance measurement system? ,🙄
3 major reasons why a new framework is needed to replace first generation models, such as the balanced scorecard and the performance pyramid:
- It is no longer acceptable or even feasible for organisations to focus solely on the needs of one or two stakeholder groups. Most performance measurement frameworks focus on the needs of the owners, and possibly the customers of an organisation. Other stakeholders such as employees and suppliers tend to be forgotten about.
- Most performance measurement frameworks ignore the changes that must be made to the organisation’s strategies, processes and capabilities in order to meet the needs of stakeholders. It is assumed implicitly that if you measure the right things, the rest will fall into place automatically. This is often not the case.
- Stakeholders must contribute something to the organisation. There is a ‘quid pro quo’ between the organisation and its stakeholders – stakeholders expect something from the organisation – but the organisation also wants something in return. Performance measurement should consider whether such stakeholders are delivering what the organisation wants from them.
The five🖐️ facets of the prism
The Performance Prism aims to manage the performance of an organisation from five interrelated ‘facets’:
- Stakeholder satisfaction – who are our stakeholders and what do they want?
- Stakeholder contribution – what do we want and need from our stakeholders?
- Strategies – what strategies do we need to put in place to satisfy the wants and needs of or our stakeholders while satisfying our own requirements too?
- Processes – what processes do we need to put in place to enable us to execute our strategies?
- Capabilities – what capabilities do we need to put in place to allow us to operate our processes?
Its key advantages over previous frameworks are considerations of the wants and needs of the stakeholders, and exclusively, what the company wants and needs from its stakeholders? By doing this, a mutually satisfactory relationship with each stakeholder is explored.
The Performance Prism presents an innovative and practical solution to this phenomenon and provides the answers to contemporary managing-with-measures challenges.
It puts key stakeholders, and managing the organisation’s relationship with each of them, centre stage with a novel framework. And, unlike some other approaches to the subject, it provides a level of granularity that allows you to implement it successfully.