The Development of Strategic Performance Metrics

Performance measurement is perhaps the most powerful management tool available for strategy deployment. Unfortunately, current literature indicates that most performance measurement systems used today are poorly suited for this purpose. In addition, while researchers and practitioners increasingly view the business organization as a collection of interrelated processes or activities, most businesses continue to structure their performance measurement systems functionally according to an organization chart. Such systems provide little information about the performance of complex business processes or about activities that cross functional boundaries.This article identifies the attributes of effective performance measurement systems recommended in the literature. The deficiencies of current performance measurement systems are then examined. A quality function deployment–based methodology for identifying strategically relevant performance metrics to control and improve business processes at the activity level is presented.