Traditional measures of performance often seem to be too little too late. Financial results are often driven by how an organization is performing in the eyes of its customers and by how effectively the internal business processes deliver value to the customer. Financial measures say little about an organization’s ability to respond to a rapidly changing world. A more balanced view of performance is essential if an organization is to manage strategic change: hence the transition incorporates our concept of a 'balanced scorecard', giving view points on financial measures, customer perspectives, business processes and organizational learning.
Financial measures are concerned with how the organization looks to the shareholders and with profitability and growth. The customer perspective is concerned with how the organization looks to its customers; customer satisfaction and quality are of prime importance.
Business processes assessments look to ensure that the organization is undertaking business effectively; examples are sought of speed of response, quality and cost leadership. Under organizational learning, an organization must ensure that it can sustain innovative change and improvement. Together, these four factors provide a top-level view of the information needed to run the business and to define the performance measures, linked to business objectives, which are essential for the consistent management of change.
Business must be able to meet today's challenges and those which will emerge during the balance of the 1990s. No one can predict exactly what will happen during this decade but business must break with the past and design its processes, systems and organizations for the in vitality of future change. Such a business design process must be driven by business needs, not by technology. The approach to business design must therefore take into account a range of foreseeable options in the environment, the economy, in markets, technology and in people. Business design must identify the degree of flexibility needed by the business together with the resources and changes required to achieve this flexibility. Business design must cover a number of key dimensions to meet new competitive demands, including business processes, information and technology, people and organization.
All of this implies that senior managers can communicate their vision of the future and give a consistent message to everyone in the organization. They must be prepared to ensure that the way they manage the business is consistent with their strategic vision. For example, if meeting customer needs requires working across existing boundaries, senior management must establish and support the teams which can do so. The 'balanced scorecard' of performance measures will help to quantify the benefit of change and assign the responsibilities for achieving benefits.
Overall consistency of direction must be ensured through coherent programme management. Programme management can resolve the inevitable issues of resource allocation and priorities between independent programmes; it is the way to combine short-term results with longer term strategic change - and to focus both on the benefits required. Programme management must ensure 'buy-in' at all levels, together with a real commitment to manage and obtain business benefits. The transition principles aim to foster and ensure this buy-in from a senior management level, starting with the declaration and articulation of strategic intent. Mobilizing resources required to achieve change and planning and implementing the program itself are a major challenge.
In many organizations two cultures still exist; those within the business organization and the IT organization. The criticism is still heard of IT people that their focus is not the business and its objectives but rather the technology that they use. Building bridges between the two organizational entities is not enough.
Financial measures are concerned with how the organization looks to the shareholders and with profitability and growth. The customer perspective is concerned with how the organization looks to its customers; customer satisfaction and quality are of prime importance.
Business processes assessments look to ensure that the organization is undertaking business effectively; examples are sought of speed of response, quality and cost leadership. Under organizational learning, an organization must ensure that it can sustain innovative change and improvement. Together, these four factors provide a top-level view of the information needed to run the business and to define the performance measures, linked to business objectives, which are essential for the consistent management of change.
Business must be able to meet today's challenges and those which will emerge during the balance of the 1990s. No one can predict exactly what will happen during this decade but business must break with the past and design its processes, systems and organizations for the in vitality of future change. Such a business design process must be driven by business needs, not by technology. The approach to business design must therefore take into account a range of foreseeable options in the environment, the economy, in markets, technology and in people. Business design must identify the degree of flexibility needed by the business together with the resources and changes required to achieve this flexibility. Business design must cover a number of key dimensions to meet new competitive demands, including business processes, information and technology, people and organization.
All of this implies that senior managers can communicate their vision of the future and give a consistent message to everyone in the organization. They must be prepared to ensure that the way they manage the business is consistent with their strategic vision. For example, if meeting customer needs requires working across existing boundaries, senior management must establish and support the teams which can do so. The 'balanced scorecard' of performance measures will help to quantify the benefit of change and assign the responsibilities for achieving benefits.
Overall consistency of direction must be ensured through coherent programme management. Programme management can resolve the inevitable issues of resource allocation and priorities between independent programmes; it is the way to combine short-term results with longer term strategic change - and to focus both on the benefits required. Programme management must ensure 'buy-in' at all levels, together with a real commitment to manage and obtain business benefits. The transition principles aim to foster and ensure this buy-in from a senior management level, starting with the declaration and articulation of strategic intent. Mobilizing resources required to achieve change and planning and implementing the program itself are a major challenge.
In many organizations two cultures still exist; those within the business organization and the IT organization. The criticism is still heard of IT people that their focus is not the business and its objectives but rather the technology that they use. Building bridges between the two organizational entities is not enough.
