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Webinar: Measuring and Improving Business Performance


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Management reporting systems are like power tools. They can help organizations measure and improve their performance, motivate workers, and achieve strategic goals quickly and effectively. But if you aren’t careful, it’s easy to make big mistakes, and maybe even injure yourself in the process.

In this presentation, Professor Robert Bloomfield of Cornell’s Johnson Graduate School of Management will review best practices in management reporting, and provide some essential “safety” tips.

Key topics include:

- The importance of seeing beyond the measures to the true performance those measures are trying to capture
- Using a Balanced Scorecard to define, achieve and improve your strategy
- Choosing the right way to measure financial performance for your organization’s goals (whether it is a for-profit, not-for-profit or governmental concern)
- Tying pay to performance, and more!

Published in: Business
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Webinar: Measuring and Improving Business Performance

  1. 1. Safety Tips and Best Practices in Managerial Reporting Professor Robert Bloomfield Johnson Graduate School of Management Cornell University 2
  2. 2. Best Practices and Safety Tips Reporting Systems are powerful tools Here’s how to use them effectively…and safely!
  3. 3. Match Your System to Your Needs An Organization’s Managerial Reporting System Should Be Matched to the Challenges it Faces
  4. 4. No System is Perfect When you represent 3D info with 2D reports, you must make compromises
  5. 5. Two Conflicting Goals of Costing Systems Reporting Margins for individual products and services Reporting Efficiencies for individual processes
  6. 6. A Process Shop
  7. 7. A Job Shop
  8. 8. Process Shops Emphasize Efficiency
  9. 9. Job Shops Emphasize Margins
  10. 10. Costing System Reference Guide
  11. 11. The Most Important Safety Tip Of The Day
  12. 12. Be Sure to Distinguish Between…. What Counts & What Gets Counted
  13. 13. Plato’s Allegory of the Cave
  14. 14. Reality is Composed of ―Forms‖…
  15. 15. …But We See Only Their Shadows
  16. 16. As Socrates puts it in Plato’s Republic:
  17. 17. Performance Measures are Not Performance
  18. 18. Forms (Constructs) and Shadows (Proxies)
  19. 19. Safety Tip: Watch for Measure Management Campbell’s Law • "The more any quantitative social indicator (or even some qualitative indicator) is used for social decisionmaking, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor." Measure Management • Improving the measure, rather than the performance the measure is intended to capture Two common methods • Distorting operations • Distorting reporting
  20. 20. Don’t forget the role of luck!
  21. 21. • I returned, and saw under the sun, that the race is not [always] to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all. • Ecclesiastes 9:11
  22. 22. Choose Your Poison Low Motivation • If you go light on incentives, will people work hard enough? Extra compensation • If you go heavy on incentives, you impose risk on your workers More detailed reporting • You can tie incentives to better measures, but it isn’t free!
  23. 23. Choose Carefully Whether to Pay for Outputs or Outcomes Output • The product or service provided Outcome • The intended result of the product or service
  24. 24. Why Governments Care ―Bragging about how many new schools you’ve built counts for little until children start graduating with economically useful skill sets. (Link)
  26. 26. Authority, Responsibility, Accountability and Causal Attribution are all different Authority is the right to make decisions Credit/Blame is a causal attribution • Whose actions caused an outcome? • Hard even for solo actors—what about omitted variables and measurement error? Accountability is a reward or penalty • You are held accountable for performance if it determines your evaluation/pay Responsibility is a set of duties • Knowing what is happening • Explaining why it is happening • Proposing responses
  27. 27. Some Final Tips
  28. 28. Decentralize authority to those with specific knowledge
  29. 29. The Hayekian Organization If we…agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place….decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization (Hayek 1945, p. 524).‖
  30. 30. Chesterton’s Fence
  31. 31. Ivy League Meets Real worldGrowth Build a Culture of Ivy League content, 100% online, combines real world projects and expert feedback to drive actionable results for your organization. Download your free executive summary of: IvySales Growth-real world strategies from the League meets 5 proven World's Sales Leaders At Ivy League 100% Online Real World Collaboration 1:1 Experts 37 Certificates
  32. 32. Grow Expertise From Within Equip your leaders and managers with MBA-level, project-based, actionable learning in over 45 courses and 200+ topics on leadership, marketing, strategy, sales, and project execution. Sales & Growth-Focused Content with Real World Application • High-Performance Leadership • Data-Driven Marketing • Marketing Strategy • New Media Marketing • Project Leadership • Management Reporting: Systems and Strategies • Business Strategy: Achieving Competitive Advantage • Sales Leadership
  33. 33. Thank you for attending – Questions? Safety Tips and Best Practices in Managerial Reporting Professor Robert Bloomfield Johnson Graduate School of Management Cornell University To contact Robert, please click the following link and provide your name and email address: