THE MANILA TIMES
Business Times p.B1
Thursday, December 30, 2004
http://www.manilatimes.net/national/2004/dec/30/yehey/business/20041230bus5.html
LEARNING & INNOVATION
By Moje Ramos-Aquino
Process for earthquake preparedness needed
WHEN the earthquake struck Bangkok, we were on the 60th floor of the 84-story Baiyoke Sky Hotel, the tallest building in Thailand. We were getting ready to go out to visit the Ancient City in the suburbs. Then the whole room started to move.
We couldn’t stand still in one place; we swayed one way, then another.
According to the calculations of my son, Ronjie, a structural engineer, the building must have swung three feet in opposite directions. While looking outside the window, I wasn’t able to focus on any object or building. I also noticed creaking sounds as if some fixtures were being torn away from the wall.
My sons, Ronjie and Adrian, hurried to dress up. We decided on staying put, going up or going down. Remembering what happened in the Baguio earthquake, I decided that we should go up. Most of the Japanese guests in Baguio were saved because they were on the top floor when the whole hotel collapsed.
When I opened the door, I saw other guests descending and the hotel staff giving instructions for everybody to go down the fire exit. We followed and ran down 60 flights of stairs. We had to run at a steady pace lest we lose momentum and cause everybody to stumble. Some people were shoving. On the way down, we could hear loud breathing and some crashing sounds.
On the 20th floor, I asked my son to help me by propping my right arm while I held on to the rail with my left hand because my legs were giving up. As soon as we were downstairs, Ronjie led us to a safe place where the building couldn’t fall on us. In the meantime, many guests and hotel staff stood right just outside the hotel oblivious of the danger.
It was scary and exhausting.
Seated on the sidewalk was a family whose members were clad in hotel towels and sleepwear. When the father of the family arrived, he asked his wife and his other children why the others ran away and left him with his daughter. He then turned to us and said, “At the first sign of danger, my wife ran for her life. So did my son. My daughter and I were left to take care of ourselves. We are not a family.”
After an hour, the hotel management asked people to go up their rooms, declaring the building safe. They explained that the building was constructed to be earthquake-proof.
But we were wary.
According to Ronjie, the building needed to be inspected first by the proper authorities and that inspection will take at least four hours. As such, even the hotel employees themselves refused to budge from their safe location.
Finally, Adrian decided to go up to take a bath. He later sent us a text message that everything seemed “business as usual.” Then, we all went up and took our breakfast at the 78th floor. If anything happened again, I reckoned, we will be safer on higher ground or we could easily be dug out.
Grim thoughts on a bright morning in a peaceful city.
Watching what happened in Phuket, Sri Lanka, India, Indonesia and others on TV later, we felt blessed that we were only shaken and still alive.
Most of the tenants checked out immediately and transferred to “safer” hotels. Ronjie said that low-rise building are more prone to collapsing because there is not much engineering that went into building them. Remember also that Thailand experienced their last earthquake some 50 years ago and is not expecting any anytime now.
This brings me back to our Journey on Entrepreneurship on the subject of Balanced Scorecard. Baiyoke obviously didn’t have a process for managing disasters. The employees didn’t know what to do. They were the first to run out at the first sign of earthquake and the last to go back.
There was no organized process for environment, safety, health and risk management. It was to each his own. More on the Process Perspective of the Balanced Scorecard in the next columns.
But I am definitely going back to Thailand. Mag-iipon muna ako ng pang-shopping.
(Moje’s e-mail addy is moje@mydestiny.net)
Thursday, December 30, 2004
Thursday, December 23, 2004
Nourishing the soul
The Manila Times
Business Times p.B1
Thursday, December 23, 2004
http://www.manilatimes.net/national/2004/dec/23/yehey/business/20041223bus6.html
LEARNING & INNOVATION
By Moje Ramos-Aquino
Nourishing the soul
Dalawang tulog na lang at Pasko na. Let’s put our discussion of the balanced Scorecard at the back burner meantime and concentrate on this very special occasion of the birthday of Jesus.
Let’s take cues from Mitch Finley’s book, 101 Ways to Nourish Your Soul, on how best we could commemorate this Holy day.
• Be generous to the point of extravagance. How much money do you intend to use this season for your “wants”? Why not give it to someone who could use it for “essentials.” Give it to somebody you don’t know and doesn’t know you and don’t tell that person it came from you. I am sure you will be rewarded with wide smile, bright face and unadulterated happiness.
• You could give your time generously. Baby-sit for a neighbor who could not go to Mass because she has little child/children or old-sit for a senior citizen in your neighborhood. You and the children and oldies could delight in rereading the story of Jesus’ birth and childhood. Con todo action y emotion. Or simply spend more time with your spouse and children, instead of attending every party in town.
• Take a walk. Instead of just sitting down there waiting for visitors, move! I had a most peaceful Christmas last year in Batangas. After Mass, we spent the rest of the day and early evening swimming in the clean, clear waters of Anilao and walking barefoot on sand and rocks. Since we were not expecting visitors, we cooked only enough and did not have to eat leftovers the following days.
• Make your own Quesadillas. Here’s a recipe from the Victor-Roldan Family (Marivic, Anna, Patricia and Mommy). Top one piece soft tortilla with chopped tomatoes, garlic and onions; grated or sliced mozzarella cheese; thinly sliced beef or pork or tuna or chicken; another layer of mozzarella; sandwich with another tortilla piece. Cook in greaseless pan or oven toaster on both sides. Cut into four. Serve hot. You can prepare ingredients days ahead and store them in the ref. These could be eaten for snacks or meals.
• Give up bitterness, resentment, whining, blaming and hopelessness. “Life is a mix of good and bad, happy and sad. You have to expect that sometimes life will kick sand in your face. So what? Pick yourself up, dust yourself off, and get back to living. So things didn’t work out the way you hope they would. All the same, you can try something else.”
• Fast. “We have a thing about food. We eat not just for body and soul togetherness. We also eat because we have nothing else to do at the moment. We eat for recreational purposes. We eat food when what we crave most is friendship or simple companionship. We eat when we crave love. We eat when we crave God. Hard to believe, but we do. Whatever you can get a handle on, don’t eat between 6 a.m. and 6 p.m., for example. Or make it a full 24 hours. That can be good.” If you have health problems, consult your doctor first.
Here are some Christmas wishes from our friends and readers.
• Vic Navales, past president of Cebu’s Durian Toastmasters Club and president of Navales Foods: May Good Lord give us all the courage and will to surmount problems. May He give us peace and happiness.
• Gigie Peñalosa, president of VCP Trading International: PEACE and PROGRESS—for our country and for ourselves. POLITICAL WILL on the part of our country’s leaders—to weed out graft and corruption at all levels and in all forms. The simple blessings of love, peace, togetherness and good health for my family and friends.
• Abe Pagtama, Filipino and Hollywood actor: for this coming year, more commercial and acting gig.
• Michael Chua, TM District 75 governor: My wish is for Philippine Toastmasters to regain the limelight in the world. What I wish for then is for more toastmaster clubs to be built in the coming weeks. Not only will we go up the rankings—the organization can touch more lives and make them better.
• Nic L. Lim, director for Human Resources at Universal Robina Corp.: For our government to take on our HR Agenda for Nation Building and help us make a call for a united action. For our government to pursue a united approach in addressing our key issues as a nation. For the Filipino people in general to instill discipline and involvement in contributing to making the Philippines a better place to live in. For world peace.
Merry Christmas from Bangkok, Thailand! No translation in Thai language because they don’t celebrate Christmas here like we do.
(Please send your Christmas wishes to moje@mydestiny.net.)
Business Times p.B1
Thursday, December 23, 2004
http://www.manilatimes.net/national/2004/dec/23/yehey/business/20041223bus6.html
LEARNING & INNOVATION
By Moje Ramos-Aquino
Nourishing the soul
Dalawang tulog na lang at Pasko na. Let’s put our discussion of the balanced Scorecard at the back burner meantime and concentrate on this very special occasion of the birthday of Jesus.
Let’s take cues from Mitch Finley’s book, 101 Ways to Nourish Your Soul, on how best we could commemorate this Holy day.
• Be generous to the point of extravagance. How much money do you intend to use this season for your “wants”? Why not give it to someone who could use it for “essentials.” Give it to somebody you don’t know and doesn’t know you and don’t tell that person it came from you. I am sure you will be rewarded with wide smile, bright face and unadulterated happiness.
• You could give your time generously. Baby-sit for a neighbor who could not go to Mass because she has little child/children or old-sit for a senior citizen in your neighborhood. You and the children and oldies could delight in rereading the story of Jesus’ birth and childhood. Con todo action y emotion. Or simply spend more time with your spouse and children, instead of attending every party in town.
• Take a walk. Instead of just sitting down there waiting for visitors, move! I had a most peaceful Christmas last year in Batangas. After Mass, we spent the rest of the day and early evening swimming in the clean, clear waters of Anilao and walking barefoot on sand and rocks. Since we were not expecting visitors, we cooked only enough and did not have to eat leftovers the following days.
• Make your own Quesadillas. Here’s a recipe from the Victor-Roldan Family (Marivic, Anna, Patricia and Mommy). Top one piece soft tortilla with chopped tomatoes, garlic and onions; grated or sliced mozzarella cheese; thinly sliced beef or pork or tuna or chicken; another layer of mozzarella; sandwich with another tortilla piece. Cook in greaseless pan or oven toaster on both sides. Cut into four. Serve hot. You can prepare ingredients days ahead and store them in the ref. These could be eaten for snacks or meals.
• Give up bitterness, resentment, whining, blaming and hopelessness. “Life is a mix of good and bad, happy and sad. You have to expect that sometimes life will kick sand in your face. So what? Pick yourself up, dust yourself off, and get back to living. So things didn’t work out the way you hope they would. All the same, you can try something else.”
• Fast. “We have a thing about food. We eat not just for body and soul togetherness. We also eat because we have nothing else to do at the moment. We eat for recreational purposes. We eat food when what we crave most is friendship or simple companionship. We eat when we crave love. We eat when we crave God. Hard to believe, but we do. Whatever you can get a handle on, don’t eat between 6 a.m. and 6 p.m., for example. Or make it a full 24 hours. That can be good.” If you have health problems, consult your doctor first.
Here are some Christmas wishes from our friends and readers.
• Vic Navales, past president of Cebu’s Durian Toastmasters Club and president of Navales Foods: May Good Lord give us all the courage and will to surmount problems. May He give us peace and happiness.
• Gigie Peñalosa, president of VCP Trading International: PEACE and PROGRESS—for our country and for ourselves. POLITICAL WILL on the part of our country’s leaders—to weed out graft and corruption at all levels and in all forms. The simple blessings of love, peace, togetherness and good health for my family and friends.
• Abe Pagtama, Filipino and Hollywood actor: for this coming year, more commercial and acting gig.
• Michael Chua, TM District 75 governor: My wish is for Philippine Toastmasters to regain the limelight in the world. What I wish for then is for more toastmaster clubs to be built in the coming weeks. Not only will we go up the rankings—the organization can touch more lives and make them better.
• Nic L. Lim, director for Human Resources at Universal Robina Corp.: For our government to take on our HR Agenda for Nation Building and help us make a call for a united action. For our government to pursue a united approach in addressing our key issues as a nation. For the Filipino people in general to instill discipline and involvement in contributing to making the Philippines a better place to live in. For world peace.
Merry Christmas from Bangkok, Thailand! No translation in Thai language because they don’t celebrate Christmas here like we do.
(Please send your Christmas wishes to moje@mydestiny.net.)
Thursday, December 16, 2004
Measures for your customer satisfaction
The Manila Times
Business Times B.1
Thursday, December 16, 2004
http://www.manilatimes.net/national/2004/dec/16/yehey/business/20041216bus4.html
LEARNING & INNOVATION
By Moje Ramos-Aquino
Measures for your customer satisfaction
Yup, we have the same title as last Thursday’s column. This is a direct continuation of that article. To refresh your mind, last week we discussed three ways of creating your customer value proposition according to authors Michael Treacy and Fred Wiersema: operational excellence, product leadership and customer intimacy.
We also said that you need to decide which of these creative ways you want to adopt because you cannot be and do all of the above. You know, jack-of-trades-master-of-none thingy.
Treacy and Wiersema ask: Why is it that Casio can sell a calculator more cheaply than Kellogg’s can sell a box of cornflakes? Does corn cost much more than silicon? “Today’s market leaders understand the battle they’re engaged in. They know they have to redefine value by raising customer expectations in one component of value they choose to highlight. Casio establishes new affordability levels for familiar products. Casio thrives because they shine in a way their customers care most about, not in all the way. They have honed at least one component of value to a level of excellence that puts all competitors to shame.”
Going back to the Balanced Scorecard segment of our Journey on Entrepreneurship, Paul Niven, author of Balanced Scorecard Step-by-Step, asserts that the value proposition you select will greatly influence the performance measures you choose since each will entail a different emphasis.
For your Balanced Scorecard, Niven suggests these sample measures of how well you are creating and delivering customer value: Product prices, prices relative to competition, product availability, inventory turnover, stockouts, customer satisfaction, customer loyalty, market share, customer complaints, complaints resolved on first contact, return rates, response time per customer request, direct price, total cost to customer, average duration of customer relationship, customer lost, customer retention, customer acquisition rates, annual sales per customer, percentage of revenue from new customers, number of customers, win rate (sales closed/sales contracts), customer visits to the company, hours pent with customers, marketing cost as a percentage of sales, number of ads placed, number of proposals made, brand recognition, response rate, number of trade shows attended, sales volume, share of target customer spending, sales per channel, average customer size, customers per employees, customer service expense per customer, customer profitability and frequency (number of sales transactions).
It is important that you include lag measures and lead indicators for your Scorecard to track your strategic and operational progress.
Happy birthday, Jesus! The beauty of Christmas is that it gives us a license to dream big dreams. In these trying times, it offers us a reason to be optimistic and cheerful. My wishes for this Christmas and 2005: President Arroyo to do what is right not what is popular. The Manila Times to be read by more people to enable it to reclaim its number one position in the print media industry.
All of us Filipinos to love our country by caring more for our fellow Filipinos and our environment and altogether dropping our self-centeredness. Filipinos especially children to read more books and plant more trees. For people to have a painless and peaceful death. More Filipinos especially retirees to volunteer to do good causes.
We’ll continue this list if you share your own list with us. Please e-mail them to moje@mydestiny.net. God listens and might just grant us our wishes.
(Moje, president of Paradigms & Paradoxes Corp., assist organizations in their Strategic Thinking, Planning, Balanced Scorecard, Change Management and Talent Development initiatives.)
Business Times B.1
Thursday, December 16, 2004
http://www.manilatimes.net/national/2004/dec/16/yehey/business/20041216bus4.html
LEARNING & INNOVATION
By Moje Ramos-Aquino
Measures for your customer satisfaction
Yup, we have the same title as last Thursday’s column. This is a direct continuation of that article. To refresh your mind, last week we discussed three ways of creating your customer value proposition according to authors Michael Treacy and Fred Wiersema: operational excellence, product leadership and customer intimacy.
We also said that you need to decide which of these creative ways you want to adopt because you cannot be and do all of the above. You know, jack-of-trades-master-of-none thingy.
Treacy and Wiersema ask: Why is it that Casio can sell a calculator more cheaply than Kellogg’s can sell a box of cornflakes? Does corn cost much more than silicon? “Today’s market leaders understand the battle they’re engaged in. They know they have to redefine value by raising customer expectations in one component of value they choose to highlight. Casio establishes new affordability levels for familiar products. Casio thrives because they shine in a way their customers care most about, not in all the way. They have honed at least one component of value to a level of excellence that puts all competitors to shame.”
Going back to the Balanced Scorecard segment of our Journey on Entrepreneurship, Paul Niven, author of Balanced Scorecard Step-by-Step, asserts that the value proposition you select will greatly influence the performance measures you choose since each will entail a different emphasis.
For your Balanced Scorecard, Niven suggests these sample measures of how well you are creating and delivering customer value: Product prices, prices relative to competition, product availability, inventory turnover, stockouts, customer satisfaction, customer loyalty, market share, customer complaints, complaints resolved on first contact, return rates, response time per customer request, direct price, total cost to customer, average duration of customer relationship, customer lost, customer retention, customer acquisition rates, annual sales per customer, percentage of revenue from new customers, number of customers, win rate (sales closed/sales contracts), customer visits to the company, hours pent with customers, marketing cost as a percentage of sales, number of ads placed, number of proposals made, brand recognition, response rate, number of trade shows attended, sales volume, share of target customer spending, sales per channel, average customer size, customers per employees, customer service expense per customer, customer profitability and frequency (number of sales transactions).
It is important that you include lag measures and lead indicators for your Scorecard to track your strategic and operational progress.
Happy birthday, Jesus! The beauty of Christmas is that it gives us a license to dream big dreams. In these trying times, it offers us a reason to be optimistic and cheerful. My wishes for this Christmas and 2005: President Arroyo to do what is right not what is popular. The Manila Times to be read by more people to enable it to reclaim its number one position in the print media industry.
All of us Filipinos to love our country by caring more for our fellow Filipinos and our environment and altogether dropping our self-centeredness. Filipinos especially children to read more books and plant more trees. For people to have a painless and peaceful death. More Filipinos especially retirees to volunteer to do good causes.
We’ll continue this list if you share your own list with us. Please e-mail them to moje@mydestiny.net. God listens and might just grant us our wishes.
(Moje, president of Paradigms & Paradoxes Corp., assist organizations in their Strategic Thinking, Planning, Balanced Scorecard, Change Management and Talent Development initiatives.)
Thursday, December 9, 2004
Measures for your customer satisfaction
The Manila Times
Business Times p.B1
Thursday, December 09, 2004
http://www.manilatimes.net/national/2004/dec/09/yehey/business/20041209bus5.html
LEARNING & INNOVATION
By Moje Ramos-Aquino, FPM
Measures for your customer satisfaction
Some companies, even now, consider customer relations and brand management as cost items in their planning and financial reporting. Dynamic companies deem brand recognition and customer relations as intangible assets and metrics for success. The Baldrige Criteria for Performance Excellence and our very own Philippine Quality Awards (PQA) assigned Customer & Market Focus a total of 235 points for excellence in process and results.
Baldrige & PQA examine how your organization determines your target customers, customer groups and market segments including their requirements, expectations and preferences to ensure the continuing relevance of your products and services to develop new opportunities. Also, how you build relationships with customers to acquire, satisfy and retain customers. Therefore, there is a critical need to differentiate your organization and the market you want to serve to enable you to create your customer value proposition. You cannot be everything to everybody.
In their book, The Discipline of Market Leaders, Michael Treacy and Fred Wiersema proposes three “disciplines” to create your customer value proposition.
• Operational Excellence. Organizations pursuing an operational excellence discipline focus on low price, convenience, and often “no frills.” Makro, Cebu Pacific, Bayantel, Pricemart, Cost U Less, Book Sale, Burger Machine, Reyes Haircutters, Secosana Bags, RiteMed and stores at Divisoria and Tutuban malls are examples of companies who focus on operational excellence by offering consistently low prices as their competitive edge.
• Product Leadership. Product leaders push the envelope of their company’s products. Constantly innovating, they strive to offer simply the best product in the market. Sony Corporation, Apple Computers, Jollibee, Unilab, Nokia, Pampanga’s Best, CDO, San Miguel Beer, Mary Grace Ensaymada, among others, would be considered product leaders
• Customer Intimacy. Doing whatever it takes to provide solutions for customers’ unique needs helps define the customer-intimate company. They don’t look for one-time transactions but instead focus on long-term relationship building through their deep knowledge of customer needs. Asian Eye Institute is a great example of a customer intimate organization. We also have Rustan’s, Emphasis Salon, Red Crab Restaurant, Fully Booked, Victoria Court, Maalikaya and many others.
Paul Niven writes in his book, Balanced Scorecard Step-by-Step, that the value proposition you select will greatly influence the performance measures you choose since each will entail a different emphasis.
For your Balanced Scorecard, Niven suggests these sample measures of how well you are creating and delivering customer value: Product prices, prices relative to competition, product availability, inventory turnover, stockouts, customer satisfaction, customer loyalty, market share, customer complaints, complaints resolved on first contact, return rates, response time per customer request, direct price, total cost to customer, average duration of customer relationship, customer lost, customer retention, customer acquisition rates, annual sales per customer, percentage of revenue from new customers, number of customers, win rate (sales closed/sales contracts), customer visits to the company, hours pent with customers, marketing cost as a percentage of sales, number of ads placed, number of proposals made, brand recognition, response rate, number of trade shows attended, sales volume, share of target customer spending, sales per channel, average customer size, customers per employees, customer service expense per customer, customer profitability and frequency (number of sales transactions).
It is important that you include both lag measures and lead indicators for your Scorecard to track your strategic and operational progress.
(Moje, president of Paradigms & Paradoxes Corporation, assist organizations in their Strategic Thinking, Planning, Balanced Scorecard, Change Management and Talent Development initiatives. Her email address is moje@mydestiny.net)
Business Times p.B1
Thursday, December 09, 2004
http://www.manilatimes.net/national/2004/dec/09/yehey/business/20041209bus5.html
LEARNING & INNOVATION
By Moje Ramos-Aquino, FPM
Measures for your customer satisfaction
Some companies, even now, consider customer relations and brand management as cost items in their planning and financial reporting. Dynamic companies deem brand recognition and customer relations as intangible assets and metrics for success. The Baldrige Criteria for Performance Excellence and our very own Philippine Quality Awards (PQA) assigned Customer & Market Focus a total of 235 points for excellence in process and results.
Baldrige & PQA examine how your organization determines your target customers, customer groups and market segments including their requirements, expectations and preferences to ensure the continuing relevance of your products and services to develop new opportunities. Also, how you build relationships with customers to acquire, satisfy and retain customers. Therefore, there is a critical need to differentiate your organization and the market you want to serve to enable you to create your customer value proposition. You cannot be everything to everybody.
In their book, The Discipline of Market Leaders, Michael Treacy and Fred Wiersema proposes three “disciplines” to create your customer value proposition.
• Operational Excellence. Organizations pursuing an operational excellence discipline focus on low price, convenience, and often “no frills.” Makro, Cebu Pacific, Bayantel, Pricemart, Cost U Less, Book Sale, Burger Machine, Reyes Haircutters, Secosana Bags, RiteMed and stores at Divisoria and Tutuban malls are examples of companies who focus on operational excellence by offering consistently low prices as their competitive edge.
• Product Leadership. Product leaders push the envelope of their company’s products. Constantly innovating, they strive to offer simply the best product in the market. Sony Corporation, Apple Computers, Jollibee, Unilab, Nokia, Pampanga’s Best, CDO, San Miguel Beer, Mary Grace Ensaymada, among others, would be considered product leaders
• Customer Intimacy. Doing whatever it takes to provide solutions for customers’ unique needs helps define the customer-intimate company. They don’t look for one-time transactions but instead focus on long-term relationship building through their deep knowledge of customer needs. Asian Eye Institute is a great example of a customer intimate organization. We also have Rustan’s, Emphasis Salon, Red Crab Restaurant, Fully Booked, Victoria Court, Maalikaya and many others.
Paul Niven writes in his book, Balanced Scorecard Step-by-Step, that the value proposition you select will greatly influence the performance measures you choose since each will entail a different emphasis.
For your Balanced Scorecard, Niven suggests these sample measures of how well you are creating and delivering customer value: Product prices, prices relative to competition, product availability, inventory turnover, stockouts, customer satisfaction, customer loyalty, market share, customer complaints, complaints resolved on first contact, return rates, response time per customer request, direct price, total cost to customer, average duration of customer relationship, customer lost, customer retention, customer acquisition rates, annual sales per customer, percentage of revenue from new customers, number of customers, win rate (sales closed/sales contracts), customer visits to the company, hours pent with customers, marketing cost as a percentage of sales, number of ads placed, number of proposals made, brand recognition, response rate, number of trade shows attended, sales volume, share of target customer spending, sales per channel, average customer size, customers per employees, customer service expense per customer, customer profitability and frequency (number of sales transactions).
It is important that you include both lag measures and lead indicators for your Scorecard to track your strategic and operational progress.
(Moje, president of Paradigms & Paradoxes Corporation, assist organizations in their Strategic Thinking, Planning, Balanced Scorecard, Change Management and Talent Development initiatives. Her email address is moje@mydestiny.net)
Thursday, December 2, 2004
Measures should focus on strategy, not on control
The Manila Times
Business Times p.B1
Thursday, December 02, 2004
http://www.manilatimes.net/national/2004/dec/02/yehey/business/20041202bus5.html
LEARNING & INNOVATION
By Moje Ramos-Aquino
Measures should focus on strategy, not on control
Welcome again to your Journey on Entrepreneurship via the Balanced Scorecard (BSC) Road. How have you been? Have you finalized your strategy? How many objectives were you and your BSC Team able to generate to ensure execution of your strategy? At this point in building your BSC, it will help to identify as many potential objectives for each of the four (or five or six, if you may) perspectives you could choose from when you finalize your strategy map.
Along with these objectives for financial, customer, internal process and learning and growth perspectives, you also need to identify as many measures for each objective. There is time for you to edit and refine your thoughts and ideas later.
Let us brainstorm on these measures. In his book Balanced Scorecard Step-by-Step, Paul R. Niven wrote that these measures are the tools you will use to determine whether you are meeting your objectives and moving toward the successful implementation of your strategy.
Niven said that measures are quantifiable (normally, but not always) standards used to evaluate and communicate performance against results. Moreover, measures communicate value creation and function as tools to drive desired action, provide all employees with direction on how they can help contribute to your organization’s overall goals.
Generating measures may not be easy, though. Niven identified a number of issues relating to financial measures, such as:
• They are not consistent with today’s business environment, in which most value is created by intangible assets.
• Financial measures provide a great “rearview mirror” of the past but often lack predictive power.
• Consolidation of financial information tends to promote functional silos.
• Long-term value-creating activities may be compromised by short-term financial metrics from activities such as employee reductions.
• Most high-level financial measures provide little in the way of guidance to lower-level employees in their day-to-day actions.
Some commonly used financial measures are total assets, total assets per employee, profits as a percentage of total assets, return on net assets, return on total assets, revenues/total assets, gross margin, net income, profit as a percentage of sales, profit per employee, revenue, revenue from new products, revenue per employee, return on equity, return on capital employed, return on investment, economic value added, market value added, value added per employee, compound growth rate, dividends, market value, share price, shareholder mix, shareholder loyalty, cash flow, total costs, credit rating, debt, debt to equity, times interest earned, days sales in receivables, accounts receivable turnover, days in payables, days in inventory, inventory turnover ratio, net sales, operating income, product related costs, capital turnover, sales rate, investment rate based on sales, number of employee for developing new products and sales growth, among others.
You may derive these measures from existing or intended financial systems in your organization. You make sure that you use them to deliver your strategy and not eventually turn them into operational management control system. Measures should always focus on strategy.
(Moje Ramos-Aquino, president of Paradigms & Paradoxes Corp., assists organizations in their strategic thinking, planning and balanced scorecard initiatives. She invites you to share your experience at moje@mydestiny.net)
Business Times p.B1
Thursday, December 02, 2004
http://www.manilatimes.net/national/2004/dec/02/yehey/business/20041202bus5.html
LEARNING & INNOVATION
By Moje Ramos-Aquino
Measures should focus on strategy, not on control
Welcome again to your Journey on Entrepreneurship via the Balanced Scorecard (BSC) Road. How have you been? Have you finalized your strategy? How many objectives were you and your BSC Team able to generate to ensure execution of your strategy? At this point in building your BSC, it will help to identify as many potential objectives for each of the four (or five or six, if you may) perspectives you could choose from when you finalize your strategy map.
Along with these objectives for financial, customer, internal process and learning and growth perspectives, you also need to identify as many measures for each objective. There is time for you to edit and refine your thoughts and ideas later.
Let us brainstorm on these measures. In his book Balanced Scorecard Step-by-Step, Paul R. Niven wrote that these measures are the tools you will use to determine whether you are meeting your objectives and moving toward the successful implementation of your strategy.
Niven said that measures are quantifiable (normally, but not always) standards used to evaluate and communicate performance against results. Moreover, measures communicate value creation and function as tools to drive desired action, provide all employees with direction on how they can help contribute to your organization’s overall goals.
Generating measures may not be easy, though. Niven identified a number of issues relating to financial measures, such as:
• They are not consistent with today’s business environment, in which most value is created by intangible assets.
• Financial measures provide a great “rearview mirror” of the past but often lack predictive power.
• Consolidation of financial information tends to promote functional silos.
• Long-term value-creating activities may be compromised by short-term financial metrics from activities such as employee reductions.
• Most high-level financial measures provide little in the way of guidance to lower-level employees in their day-to-day actions.
Some commonly used financial measures are total assets, total assets per employee, profits as a percentage of total assets, return on net assets, return on total assets, revenues/total assets, gross margin, net income, profit as a percentage of sales, profit per employee, revenue, revenue from new products, revenue per employee, return on equity, return on capital employed, return on investment, economic value added, market value added, value added per employee, compound growth rate, dividends, market value, share price, shareholder mix, shareholder loyalty, cash flow, total costs, credit rating, debt, debt to equity, times interest earned, days sales in receivables, accounts receivable turnover, days in payables, days in inventory, inventory turnover ratio, net sales, operating income, product related costs, capital turnover, sales rate, investment rate based on sales, number of employee for developing new products and sales growth, among others.
You may derive these measures from existing or intended financial systems in your organization. You make sure that you use them to deliver your strategy and not eventually turn them into operational management control system. Measures should always focus on strategy.
(Moje Ramos-Aquino, president of Paradigms & Paradoxes Corp., assists organizations in their strategic thinking, planning and balanced scorecard initiatives. She invites you to share your experience at moje@mydestiny.net)
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