Performance Management System

Balanced Business


Performance Measurement System

Measure to improve effectiveness and efficiency

Vadim Kotelnikov

Vadim Kotelnikov, founder of 1000ventures - personal logo






2 Elements of a Contemporary Measurement System

①  Formal, structured and quantified model of enterprise.

②  Process to improve enterprise performance... More



Seven Benefits of a Good Measurement System

A good performance measurement system will help you achieve success in six ways:

①  Establish your current position

② Make informed and timely decisions to initiate positive change

③ Communicate the desired state and direction

④ Identify areas for improvement both incremental and radical

⑤ Stimulate action in the most important areas for your business

⑥ Stimulate and facilitate learning forward

⑦ Influence behavior, help people work both smarter and harder



8 Best Practices of Successful Companies

  1. Measure performance by customer satisfaction... More

3 Strategies of Market Leaders

Business Process Thinking Check List

13 Questions

  • By what measure does your company judge the performance of your process?... More

Canon Production System (CPS) includes:

Improvement-focused Measurement System

  • has improvement-oriented measures

  • provides no data without a rationale and purpose

  • ensures that people know why things are being measured

  • ensures that people know what to do about the measures

Measures Used to Manage the Performance of a Business2

  1. Strategic Measures:

    • market attractiveness (industry structure, growth, concentration, innovation, customer power, logistical complexity), and

    • competitive strength (relative market share, relative quality, intellectual property, customer coverage)

  2. Organizational Measures:

  3. Operational Measures:

Successful Measurement System Provides:

  1. Feedback that tells you whether you are or aren't doing the right things, and doing them well

  2. Motivation that will spur you on to improve your performance

  3. Incentive for you and your team to 'do it better'

But for all this to happen you must make sure that you measure:

  1. the right things

  2. at the right time, and

  3. in the right place

The GE Leadership Effectiveness Survey (LES)

Ranking Scale: Significant Development Needed  1  2  3  4  5  Outstanding Strength

25 Lessons from Jack Welch

Enterprise Process Management (EPM) Gives Your the Power To:

  • Monitor and measure performance against goals across sales, marketing, operations, finance, supply chain, customer and product management... More

State-of-the-art Supply Chain

●  Measured by lead-time on class-A purchased materials... More

Why Measure Performance?

The basic purpose of any measurement system is to provide feedback, relative to your goals, that increases your chances of achieving these goals effectively and efficiently. Measurement gains true value when used as the basis for timely decisions.

Learning SWOT Questions

Measurement Is Not an Essence, but Improvement

The purpose of measuring is not to know how your business is performing but to enable it to perform better. The ultimate aim of implementing a performance measurement system is to improve the performance of your organization. If you can get your performance measurement right, the data you generate will tell you where you are, how you are doing, and where you are going.

9 Signs of a Losing Organization

Continuous Improvement Firm  Download PowerPoint presentation, pdf e-book

18 Leadership Lessons from Colin Powell

  • The most important question in performance evaluation becomes not "How well did you perform your job since the last time we met?" but "How much did you change it?".... More

17 Indisputable Laws of Teamwork

  • The Law of the Scoreboard: The Team Can Make Adjustments When It Knows Where It Stands... More

29 Obstacles To Innovation

Modern Systems Approach

You must master your systems thinking skills as measurement today must be neither and end nor an activity in itself but a part of an integrated system for enhancing business performance... More

Balanced Business System

Transforming the Traditional Functional Mindset

Traditional functional way of thinking "stands in the way of executives understanding and improving the flow of cross-functional activities which create enduring value for customers and shareholders. It encourages a distorted view of performance measurement and executive rewards, shifting focus away from meaningful measures such as the timeliness and quality of services provided to customers, and towards less significant measures around functional departmental performance."... More

Balanced Scorecard

The Balanced Scorecard is a framework for designing a set of measures for activities chosen by you as being the key drivers of your business. By having four distinct perspectives (financial, customer, internal process and innovation and learning) it promotes a more holistic view of the business... More

Results-based Leadership

 Case in Point  GE: Trotter Scorecard

Many GE business units employ a tool called the Trotter Matrix to check on their use of best practices. The scorecard was developed by Lloyd Trotter, who ran the Electrical Distribution and Controls side at GE. He listed six desirable attributes for each of his plants and then scored each attribute... More

Economic Value Added (EVA)

Economic Value Added (EVA), or economic rent, is a widely recognized tool that is used to measure the efficiency with which a company has used its resources. In other words, EVA  is the difference between return achieved on resources invested and the cost of resources. Higher the EVA, better the level of resource unitization... More

360-Degree Assessment

The 360-degree assessments are commonly used in corporations in management and leadership development programs. In 360-degree assessment, the participant completes a self-assessment and also collects feedback from supervisors, peers, subordinates and customers (or sometimes vendors)... More

Measuring Cleaner Production

Measuring cleaner production (CP) is of critical importance. You must use appropriate indicators, which are generally applicable, yet specifically measurable, and address both the productivity and environmental aspects of your system in an integrated fashion. The indicators should enable not only estimation of the CP of a product or process and its comparison with other equivalents, but also improvement of the existing process or product and the development of new products.

Life Cycle Assessment (LCA) and Total Cost Assessment (TCA) are two types of CP indicators that help managers understand the practical implications of GP and make right decisions... More

13 Tips for Transitioning Your Company To a Lean Enterprise

  • Realign metrics with value streams perspective... More


 Discover much more in the


Performance Management...

Effective Performance Measurement System: Key Features...

Manager's Diagnostic Toolkit...

Measure-Management Companies...

Evaluating Corporate Performance: New Metrics...

Two Questions You Should Ask Yourself...

Measuring Productivity...

Six Sigma Tells You...

Measuring Coach's Effectiveness...


360 Evaluation and Feedback...

Enterprise Performance Management (EPM)...

Process Thinking...

Systems Thinking...

 Case in Point  Intel Corp...

 Case in Point  Quality Measures at General Electric (GE)...

 Case in Point  Dell Computer Corporation...

 Case in Point  Silicon Valley Firms...

 Case in Point  IDEO...

 Jokes  Robert Burn's Hog-Weighing Method...


Peter Drucker advice

What gets measured gets done.



Vadim Kotelnikov

Measure what you value, value your measurements, and analyze them to discover new ways to create a greater value.

Vadim Kotelnikov, founder of 1000ventures - personal logo Vadim


Business e-Coach   Innompic Games icon   Innoball


Naryana Murthy advice

A great company continuously measures and improves the following attributes: meritocracy, fairness, justice, openness, speed, imagination and excellence in execution.

Naryana Murhty



Jack Welch advice business quotes

Simplicity applies to measurement also. Too often we measure everything and understand nothing.

Jack Welch




Michael Dell advice

We decided to reward employees around a matrix of Return on Invested Capital (ROIC), and growth.

Michael Dell

Dell Inc..



ROIC: Return on Invested Capital (ROIC) is a measure of how effectively you create shareholder value to your cost of capital. ROIC helps you identify best-performing businesses and those that aren't delivering the performance they should.

KPI: An effective Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives.






  1. Balanced Scorecard In a Week, Mike Bourne and Pippa Bourne

  2. Managing Complexity, Robin Wood

  3. Six Sigma, Mikel Harry and Richard Schroeder

  4. Business Process Management: The Third Wave, Howard Smith and Peter Fingarr

  5. BPM - Approaches & Best Practices, by Andrew Spanyi

  6. Agenda, Michael Hammer

  7. Direct from Dell, Michael Dell with Catherine Fredman

  8. Blur: The Speed of Change in the Connected Economy, Davis, S. and Meyer, C.

  9. Productivity Improvement in the Service Sector, Mah Lok Abdullah, APO Newsletter,

  10. Measuring Performance : Using the new metrics to deploy strategy and improve performance, Bob Frost

  11. More For Less, Andrew Spanyi

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Using Best Practice: The Trotter Scorecard

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Balanced Scorecard (BSC)