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Dear Mr. Gromit,
I have much confusion about Performance hierarchy.
– The examiner said: it can be used to set up a coherent performance measures. But:
how it works?
I just understand the surface. It start from corporate mission -> tactical objective (Financial, flexibility, market) -> operational performance (delivery, quality etc.)
What are their link and supports to each other?
In the pyramid, only operational performance are direct measures and remaining (ie. tactical objective) is results in?
I see no different between the Pyramid with normal way of setting measures: such as those may not follow this hierarchy but still adhered to corp. mission. Therefore, what is the value behind Performance pyramid? beside its systematical mechanism?
Many thanks Sir in advance 🙂
One advantage is that it lists out the areas that are important to performance such as customer satisfaction, flexibility, quality and cycle time.
Performance measures are needed for all of these areas.
Think of going down the left and up the right.
Corporate success will depend on success in the market and this depends on customers satisfaction and flexibility which depend on quality and good delivery.
Corporate success also depends on finance, so good financial results mean delivering to the market in ways that are sufficiently efficient (productivity and flexibility) and these depend on getting cycle times and waste low.
it means Performance Pyramid provides a systematic mechanism of measure which different to a measure fits to a randomly objective?
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