Archive for May, 2010

Plan-Do-Check-Act (PDCA) / Plan-Do-Study-Act (PDSA), Philosophy and Performance Management

Friday, May 28th, 2010 Performance Architect update 21/2010

One of the administrative science domains that feeds Performance Management as a discipline is the quality movement. The Plan-Do-Check-Act (PDCA) cycle is at the core of the link between the two fields. It has been promoted and used in its current form for over 50 years. However, its roots can be traced back to ancient Greece.

Socrates (469-399 BC) formulated the dialectic inquiry process based on the idea of questioning and modifying understanding through the conflict of opposing ideas. This technique was further refined by Aristotle (384-322 BC), who enunciated a method of scientific investigation that employed both dialectics and empirical observations. His deductive reasoning approach combined with inductive elements became the foundation of the western scientific method, influencing philosophy and scientific inquiry for hundreds of years.

The famous arab scholar Ibn Sina, known to the western world as Avicenna (980-1037), proposed two stages of the scientific knowledge discovery process: conceptualizing what is meant and verifying what is being conceptualized, the basis of what evolved into what is being called the “Avicennian logic”.

Francis Bacon (1561-1626), considered one of the fathers of the scientific revolution, employed such an approach in defining a more modern version of the scientific method, with the balance leaning more towards the induction reasoning. The conceptualization becomes hypothesis and verification is separated into two further steps: data gathering and results analysis.


Retail KPIs in practice – Foot Locker 2010

Thursday, May 27th, 2010

Foot Locker, Inc., the New York-based specialty athletic retailer, recently reported first quarter financial results. Some of the Key Performance Indicators (KPIs) used within the report are:

Condensed Consolidated Statements of Operations (Foot Locker, Inc. 2010)


Performance Management – a story told through key survey figures and statistics

Friday, May 21st, 2010 Performance Architect update 20/2010

Performance Management is one of the most dynamic business disciplines today. Its evolution accelerated over the last 20 years and due to the large number of concepts it employs and unstructured body of knowledge, having a comprehensive big picture view of the topic is rather challenging. One way of achieving this is by reading a lot and doing a critical review to the various ideas proposed. Another option is by monitoring the pulse of the discipline as reflected in studies and survey reports covering performance management topics.

Listed below is a random list of relevant statistics published in performance management studies over the last few years. It is interesting to put them together as pieces in a puzzle, to create a picture of the state of the discipline. This is the plus. On the other hand, each study used different research tools and varied in rigor, so the results need to be analyzed in the context of the survey as illustrated in the original report.

Overall they form an interesting read and while the degree of accuracy for their findings may vary, they can be useful in understanding the thinking and direction in Performance Management research and practice:


A visual representation of the Balanced Scorecard concept

Wednesday, May 19th, 2010

There are many popular figures representing the Balanced Scorecard concept. Perhaps the most famous one is the one illustrating the four traditional perspectives, with corresponding questions and related objectives, measures, targets and initiatives:

What is wrong with Performance Measurement?

Friday, May 14th, 2010 Performance Architect update 19/2010

A simple answer is over-reliance on measurement and its merits.

Since ancient times, humans had a fascination with measurement. In discovering the natural universe, measurement has its merits and one might say it is indispensable. Evaluating the physical properties of the world around us, we have gradually developed a rather objective and accurate way to determine distance, weight, density among others.

In administrative science things are different, tough. Measurement is done by humans and results are used by humans in a much more subjective environment, conducive of errors. It is not something new, and it will not be easily addressed, if ever.

Protagoras of Abdera, who lived between 480-410 B.C. famously said: “Man is the measure of all things”. His words have deep philosophical meanings that reverberate deeply in a performance measurement context. The implications are on one hand at a practical level, as ancient Greek measurement systems used in construction and architecture were based on the dimensions of the human body. On the other hand, at conceptual level, it underpins some of the human evaluation dilemmas that has been in place for centuries.


Over 600 Key Performance Indicators (KPI) in practice reports on

Tuesday, May 11th, 2010 registered users can now learn about how companies use Key Performance Indicators (KPIs) to monitor their performance by reviewing over 600 KPIs in practice reports documented and published in the online repository. The team focused in the last month on publishing reports from the manufacturing , and retail industries. KPIs in practice reports specific to the publishing and hospitality industries were also added to the database.


Healthcare performance measures at national level

Monday, May 10th, 2010

The Agency for Healthcare Research and Quality (AHRQ) has issued the seventh annual report on the state of health care quality nationally, the National Healthcare Quality Report (NHQR) and the National Healthcare Disparities Report (NHDR).

Both reports present the latest available findings on quality and access to healthcare.

  • The National Healthcare Quality Report presents performance management in healthcare system through quality measures, focused both on process and outcome.
  • The National Healthcare Disparities Report offers a broader perspective upon healthcare quality and access among various racial, ethnic, and income groups and other priority populations, such as children and older adults.

The main conclusions of the reports are:

  • Agency for Healthcare Research and Quality (2010) reported that improvements in patient safety continue to lag. Quality is improving at a slow pace. Of the 33 core measures, two-thirds improved, the median rate of change being 2% per year.
  • Process and outcome measures are improving. Of the 68 process measures, 23 (34%) improved at a rate greater than 5% per year. Overall, the median rate of change was 2.2% per year. Improvement is somewhat slower for outcomes. Of the 92 outcome measures, 23 (25%) improved at a rate greater than 5% per year. Overall, the median rate of change was 2.3% per year.

Change in quality over time

Change in quality over time, (Agency for Healthcare Research and Quality 2010, p.9) (more…)

Relationship Marketing Performance Management

Saturday, May 8th, 2010

Although not benefiting from a unanimously accepted definition, Relationship Marketing is a sub-discipline of Marketing defined (Gummesson 2004, p. 136) as ”Marketing based on interaction within networks of relationships”. The classic Relationship Marketing refers to the physical distribution network relationships, with main focus on supplier-customer interactions (Gummesson 1997 cited in Harwood & Garry 2006), the premise being the mutual benefit for both parties and also the commitment to ensure relationship longevity (Harwood and Gary, 2006). While the supplier-customer is not the only form of Relationship Marketing existence, it is argued (Ballantine et al. 2000 cited in Harwood & Garry, 2006) that customer relationship marketing is the most representative for achieving improved market and financial performance.


Performance Management case study: Balancing on-time service and pay-for-performance in urban public transport

Friday, May 7th, 2010 Performance Architect update 18/2010

Delivering urban public transportation services today is a challenge due to the slow process of upgrading infrastructure and the general trend of population increase in large cities. Finding a balance between service delivery and punctuality requires careful planning and active monitoring of results. The case study illustrated below highlights some of the challenges and trade-offs that have to be explored by each operator.


Urban public transportation operator.


Performance Management history file – Global Performance Management for Small and Medium-Sized Enterprises

Tuesday, May 4th, 2010

The specific needs of small and medium-sized enterprises (SMEs) have been addressed by various initiatives in diverse areas of organizational management and development, including the context of performance management and measurement.

Such an initiative represents the project entitled Global Performance Management for Small and Medium-Sized Enterprises (GPM-SME), financed by the 6th Framework Program (FP 6) of the European Commission, the Co-operative research (CRAFT) scheme between 2002-2006.

As shown by the Community Research and Development Information Service (CORDIS), the Framework Program is the largest EU instrument for the funding of research and considering the major importance of SMEs in the Union’s economy (seen as the most innovative, flexible and dynamic enterprises and accounting for a great amount of the existing jobs), it’s no wonder that one of the Program’s schemes – the CRAFT scheme mentioned above – is dedicated exclusively to SMEs (CORDIS, 2010).

The GPM-SME project was launched by a transnational consortium of R&D centres, industrial companies, software developers, consulting firms and standardization organizations (Alba et al., 2005):

Source: Alba et al., 2005


Over 3200 Key Performance Indicator (KPI) examples on

Monday, May 3rd, 2010 registered users can now select their Key Performance Indicators (KPIs) from over 3200 Performance Measures documented and published in the online repository. The team focused in the last month on publishing examples from the Healthcare,  Professional Services and Hospitality & Tourism industries.


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