Results

introduction

category commentary

the criteria explained

category handbook

category worksheets

exhibits
Results > commentary

An organisation's performance measurements need to focus on key results:

  • Results should be focused on creating and balancing value for all stakeholders – customers, employees, stockholders, suppliers and partners, the public, and the community.
  • To meet the sometimes conflicting and changing aims that balance implies, organisational strategy needs to explicitly include all stakeholder requirements. This will help to ensure that actions and plans meet differing stake-holder needs and avoid adverse impact on any stakeholders.
  • The use of a balanced composite of performance measures offers an effective means to communicate short- and longer-term priorities, to monitor actual performance, and to marshal support for improving results.

Criteria for Performance Excellence 1999 - core values, concepts and framework


This category's weighting - it's worth more points than any of the others (and nearly as much as the others put together) - has evolved to 450 points because results separate good organisations from mediocre ones. Skilled application writing will help to achieve good scores in criteria 1 to 6, but not here. The examiners score criteria 7 on performance levels, trends and comparative data, not words.

New definitions of performance
Two developments - the emergence of an affluent (though by no means rich) middle class of non-manual workers and the extension of life expectancy - have led to the development of institutions such as pension funds and mutual funds. Those are now the legal owners of the key property in a modern, developed society: public corporations. And with that shift in ownership, we are seeing a shift in power.

In the United States since the late 1920s, the prevailing theorem, however fuzzy, held that a business should balance the interests of various stakeholders - customers, employees, shareholders, and so on - which in fact meant that it should not be accountable to anyone. The emerging American theorem that businesses should be run exclusively for the short-term interest of the shareholders is not tenable and will certainly have to be revised.

The future economic security of more and more people - as more and more people can expect to live longer - increasingly depends on their income as stock owners. The emphasis on measuring performance mostly by how much it benefits the shareholders will therefore not go away. Immediate gains, whether in earnings or in share price, are, however, not what shareholders need. They need economic returns 20 or 30 years hence.

We will have to learn how to balance short-term results - which is what the present emphasis on shareholder value amounts to - with the long-range prosperity and survival of the enterprise.

Businesses also will increasingly have to satisfy the interests of their knowledge workers. Performance will have to be defined non-financially in order to be meaningful to knowledge workers and generate commitment from them.
Peter Drucker 1999