Date: June 30th, 2010
Cate: Animals, Nature

Common Wombat - Vombatus ursinu

In brief:

  • Native Australian marsupials;
  • Can get over 1 m (40 inches) in length and 30 kg (66 pounds) in weight;
  • Live in burrows, up to 30 m (90 feet) long;
  • Have thick skin, in some areas over 1 cm (0.39 in) thick;
  • Nocturnal animals, they rely on an excellent sense of smell;
  • Feed on grasses, roots and bark.

wombat

More details: Wombats, second edition, by Barbara Triggs

smartKPIs.com Performance Architect update 25/2010

Mission statements as strategic management tools – A brief history

The pursuit of organizational clarity and alignment towards a strategic direction has preoccupied researchers and practitioners for many decades. Especially over the last 50 years, a variety of management concepts have been popularized and adopted by organizations with more or less success.

Two such management concepts that gained popularity since then are mission and vision statements. They are considered strategic management tools or instruments, one of the clearest definitions for both being: “The mission statement is a statement of a company’s purpose,…, if mission outlines what the company is attempting to achieve at the present time, its vision offers a view of what the enterprise might become.” (Grant 2002: 60).

The term “mission” is reported to have been used first by Jesuit monks, to depict the act of sending monks on overseas missions, such as the missions in the 16th century in South America, following the landing of Christopher Columbus (Merino and Newson 1995). Over time, the use of the term expanded from religion to the military, who used it to reflect a specific assignment allocated as part of a plan or strategy. The link between military and business vocabulary was facilitated by books such as “On War” by Carl von Clausewitz (1832), considered one of the most important treaties on the philosophy of war. An entire section of the book (“Of strategy in general”) was dedicated to strategy and is considered today an important precursor of strategy management literature.

One of the earliest uses of a mission statement outside of religious and military organizations is reported to have occurred in 1941, when the American Journal of Economics and Sociology was established by Adolph Lowe and Franz Oppenheimer. As founding members of the editorial board they adopted a mission statement for the journal that called for cooperation and constructive synthesis in social sciences (Forstater 2002).

In business context, the use of the term mission had a different path. As early as 1960, Stoller and Van Horn wrote about how the military approach to planning can be applied in a business context. Smalter (1964) published one of the first articles exploring the influence of military literature on management practice. It explored in detail how the military concept of missions can be applied in business, however the term was used more in a “program-package” sense and not in the sense it is widely used today. Tombach (1961:54) had a different approach to using the word “mission” to cross-over from military to business literature: “the mission of defense […] can be broadly defined as that of preventing or minimizing damage to a target or target complex […] from hostile action.”

According to David (1989), the link to the business environment was facilitated by Peter Drucker, who started to write on the topic in mid 1970s. One of Drucker’s recommended questions for any organization was: “What is our business?”. David (1989:90) considered the answer is reflected in Drucker’s own words (1973): “A business is not defined by its name, statutes, or articles of incorporation. It is defined by the business mission. Only a clear definition of the mission and purpose of the organization makes possible clear and realistic business objectives.”

McGinnis (1981), Pearce II (1982), Staples and Black (1984) were among the first to dedicate entire articles to the discussion of the use of missions statements as strategic management tools. The term “mission statement” was understood as expressing the fundamental purpose specific to an organisation.

By 1986, two things occurred. On one hand, mission statements became widely used in corporate environments. Want (1986:48) notes that: “Executives and consultants alike are familiar with mission statements, and many have participated in the mission-writing exercise.” On the other hand, divergent views how mission statements should be formulated and used started to emerge. Pearce II and David (1987) proposed eight key components, among which mentions of target customers and markets, identification of products and services, geographic domain, core technologies and desired public image. Want (1986) lists as primary components of corporate mission statements: purpose, principle business aims, corporate identity, policies of the company and the values.

Regardless of these challenges, by 1990s research on the use of mission statements started to focus on their use (Ireland and Hitt 1992), their role (Leuthesser and Kohli 1997) and impact on firm performance (Bart and Baetz 1998). From 2000 onwards, researchers focused increasingly on questioning the value added by mission statements. Titles such as “Mission Statements: Are They Smoke and Mirrors?” (Bartkus, Glassman and McAfee 2000) and “Mission Possible: Do School Mission Statements Work?” (Davis, Ruhe, Lee, Rajadhyaksha 2007) are illustrative. Further research in the impact of mission statements on the financial performance concluded that they have little or no impact on financial performance (Bartkus, Glassman and McAfee 2006).

One of the most comprehensive reviews of the topic by Stallworth Williams (2008) concluded that despite the challenges in the formulation and use of mission statements, they shouldn’t be considered fads, as they withstood the test of time and continue to matter.

Mission statements continue to remain an important strategic management and business performance management tool, helping with grounding organisations by clarifying their purpose or reason to exist and framing the context of their operations.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com


References

Bart C, Baetz M (1998) The relationship between mission statements and firm performance: An exploratory study, Journal of Management Studies, 35(6): 823-853.

Bartkus B, Glassman M and McAfee B (2000), Mission Statements: Are They Smoke and Mirrors? Business Horizons, November-December: 23-28.

Bartkus B, Glassman M and McAfee B (2006), Mission Statement Quality and Financial Performance, European Management Journal, 24(1): 86–94.

David F. (1989) How Companies Define Their Mission, Long Range Planning, 22(1): 90-97.

Davis JH, Ruhe JA, Lee M, Rajadhyaksha U (2007), Mission Possible: Do School Mission Statements Work?, Journal of Business Ethics, 70:99–110.

Forstater M (2002) How the AJES Got its Mission Statement in 1941, American Journal of Economics and Sociology, 61(4):779-786.

Grant RM (2002) Contemporary Strategy Analysis, 4th edition, Blackwell Publishers, Oxford, UK.

Ireland RD and Hitt MA (1992) Mission Statements: Importance, Challenge, and Recommendations for Development, Business Horizons, May-June: 34-42.

Leuthesser L and Kohli C (1997) Corporate Identity: The Role Of Mission Statements, Business Horizons, May-June: 34-42.

McGinnis VJ (1981), The mission statement: A key step in strategic planning, Business, November December: 39-43.

Merino O, Newson LA (1995) ‘Jesuit Missions in Spanish America: The Aftermath of the Expulsion’. Paper presented at the Conference of Latin Americanist Geographers, accessed at http://sites.maxwell.syr.edu/CLAG/yearbook1995/newson.pdf on 29 June 2010.

Pearce II JA (1982), The Company Mission as a Strategic Goal, Sloan Management Review, Spring: 15-24.

Pearce II JA, David F (1987) Corporate Mission Statements: The Bottom Line, The Academy of Management Executive, 1(2):109- 115.

Smalter DJ (1964) The Influence of Department of Defense Practices on Corporate Planning, Management Technology, 4(2):115-138.

Stallworth Williams L (2008), The Mission Statement – A Corporate Reporting Tool With a Past, Present, Future, Journal of Business Communication, 45( 2): 94-119.

Staples WA, Black KU (1984) Defining Your Business Mission: A Strategic Perspective, Journal of Business Strategies, 1:33-39.

Stoller DS, Van Horn RL (1960) Design of a Management Information System, Management Technology, 1(1):86-91.

Tombach H (1961) Critique of Air Defense Measures of Effectiveness, Management Technology, 1(3):52-62.

Von Clausenwitz C (1832) On War, 1st edition in English (1874) translated by Colonel J.J. Graham, accessed at http://www.gutenberg.org/etext/1946 on 28 June 2010.

Want JH (1986) Corporate mission, Management Review, August: 46–50.

Walker, Rob 1992, Rank Xerox – Management Revolution”, Long Range Planning, Vol. 25, No. 1, pp. 9 to 21

Date: June 21st, 2010
Cate: Animals, Nature

Kulab, the smiling elephant

Kulab (Rose) is 10 years old and expecting a baby elephant in August 2010.

rose-the-smiling-asian-elephant

smartKPIs.com Performance Architect update 24/2010

Benchmarking, Rank Xerox and Canon

Benchmarking as a management concept is reported to have its roots in land surveying, where the altitude of objects is estimated based on a pre-established point of reference on an arbitrary landmark (McNary, 1994). Frederick Taylor is reported to be the first to use benchmarking along with other principles in a business enterprise to improve performance. Elements of benchmarking can be recognized in Taylor’s scientific management approach applied during his time at Bethlehem Steel Company (McNary, 1994), popularized in “The Principles of Scientific Management” .

Benchmarking as we know it today was first applied by the Xerox Corporation in later 70s, early 80s. Faced with increased competition from Japanese imports, Xerox set upon improve its order fulfillment process and other processes deemed unproductive. One of the first accounts of the “competitive benchmarking” approach at Xerox was given in 1992 by Rob Walker, the Director of Business Management Systems and Quality at Rank Xerox (U.K.) Ltd. at the time. In his article “Rank Xerox – Management Revolution”, he describes in detail the challenges, changes made and impact of the “competitive benchmarking” approach at the company. Under the “competitive benchmarking” initiative. Xerox compared itself to its Japanese competitors as well as large organizations operating outside of the industry: “American Express for billing and collections, American Hospital Supply for automated inventory control, LL Bean for distribution, warehousing and order-taking” (Walker, 1992).

The ascent of benchmarking in the 80s resulted in numerous books and articles published, reflected in the business environment by an increase in the use of benchmarking around the world. Comparing to others is natural to humans, so benchmarking was rather easy to understand in theory. Applying it in practice and generating value from it is a different story.

In sports and tennis in particular, performance metrics are monitored by players and coaches to track progress and how the game plan was executed. In terms of benchmarking KPIs between players, this needs to be explored with care. The playing style is different from one player to another. One player might have a very powerful serve, but generally inaccurate. Another might have a high percentage of net approaches, but ineffective. On top of this, in tennis the concentration power and determination is in many instances more important than game statistics. Similarly, in business, many companies zoom to a different tune. While benchmarking sounds good in theory, there are many practical issues relating to data accuracy and relevance of results. There are many questions organisations need to clarify before embarking on such a road:

a. Who may the beneficiaries of such an exercise be?

b. What is the added value?

c. Who has done this well?

The graph below raises another question:

Source: Google Finance, 2010

Did it ultimately work for Rank Xerox?

or even

What did Canon differently to generate such a gap between the stock price performance over the last 10 years?

Comparing performance across entities is even easier today. Availability of information technology and rich datasets facilitates benchmarking across multiple dimensions. However, embarking on benchmarking initiatives because “it seems to be a popular tool” or because it was recommended by a consultant can be risky. Same as if it is pursued “just because we can” or with unreliable data. Done properly, it might still be a good idea overall, but then another question needs to be asked:

Are there any other better ideas?

Yet again, Study puts initiatives management in a new light.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com


References

McNary, Lisa D. 1994, “Thinking about excellence and benchmarking”, The Journal for Quality and Participation, July-August 1994, v17, n4, p90(1)

Walker, Rob 1992, “Rank Xerox – Management Revolution”, Long Range Planning, Vol. 25, No. 1, pp. 9 to 21

Date: June 15th, 2010
Cate: Animals, Nature

Aldabra Giant Tortoise - looking for George

The Aldabra Giant Tortoise is native to the Aldabra atoll in the Seychelles and weighs up to 250Kg.

galapagos-giant-turtle-looking-for-george

smartKPIs.com Performance Architect update 23/2010

Working with initiatives in Performance Management – Check and Act vs. Study and Act

In one of my previous updates I reviewed the history of the Deming cycle and its relevance for Performance Management. One of the most important benefits of managing performance in organizations is that it facilitates a structured process of improving the achieved results, which is the essence of performance.

Improvement doesn’t automatically derive from measurement. A robust process of analysis and decision making is required to facilitate suitable actions or initiatives. And to illustrate this process, Study as in the PDSA cycle is more meaningful than the Check as in the PDCA cycle.

The Performance Management case study presented the scenario of a non-profit organization interested in addressing childhood development issues. Some of the measures used were:

  • % Incidents of anemia
  • # Average scores on language and communication skills for toddlers
  • # Average scores for vocabulary tests

Using the traditional Plan - Do - Check - Act (PDCA) approach, the Check and Act phases would resume to gathering performance results data, reviewing it and taking actions to improve results. Generally the initiatives established as a result of this process would aim at doing more of the same thing. Improve efficiency or increase the volume of efforts.

However, a subtle change, that might appear superficial and technical to some, might mean more that it seems. Replacing Check with Study, shifts the emphasis from control and fixing the existing approach to learning and finding new ways to address the issue. For many years performance management has been associated with checking, inspecting, and controlling conformance. Performance Management for learning is a more balanced, mature approach to improvement.

In the case analyzed above, a review of the literature in the field and the latest research in the area of children health and development would reveal that the solution to the stagnation in achieving results might come from a surprising new direction. Under the title “Housing, Health, and Happiness” a new study published by the American Economic Journal: Economic Policy reveals that “replacing dirt floors with cement floors interrupts the transmission of parasitic infestations and should therefore reduce the incidence of both diarrhea and anemia. The reduction in anemia is expected to have positive effects on cognitive development” (Cattaneo et al, 2009).

The study, commissioned by the Mexican government, reveals the following results achieved during the experiment conducted in Mexico (UCBerkeleyNews, 2009):

  • 20.1% reduction in incidents of anemia
  • 30.2 percent higher score on the McArthur test (language and communication skills for toddlers ages 12 to 30 months)
  • 9% improvement in the scores obtained in the PPVT test (vocabulary tests for children ages 36 to 71 months)

When limiting themselves to checking the data and doing more of the same thing, organizations do not create the suitable conditions for leaning and integrating new ideas. Expanding the scope of inquiry from current approaches to researching new ones and investigating what happens in the field they operate in around the world, the improvement process benefits from using a more robust view on performance management, that emphasize the role of the study component.

In the case described above, reviewing recent research in the issue of health and early childhood development reveals a potential new approach that might just be the solution sought after. Setting up a new initiative that aims at replacing dirt floors with cement promises to a positive impact on the health and cognitive development of young children in the targeted community.

Study puts initiatives management in a new light.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com


References

Cattaneo, Matias D., Sebastian Galiani, Paul J. Gertler, Sebastian Martinez, and Rocio Titiunik. 2009. “Housing, Health, and Happiness” American Economic Journal: Economic Policy, 1(1): 75–105. Note: a working paper version of the article is available at: http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=system/files/shared/pubs/papers/pdf/SCID367.pdf

UCBerkeleyNews, 2009, “Inexpensive flooring change improves child health in urban slums” available at: http://berkeley.edu/news/media/releases/2009/03/10_floors.shtml, accessed 05 June 2010.

Date: June 10th, 2010
Cate: Animals, Nature

Tags:,

The peripheral vision of does

Due to the large cornea of their eyes, deer have have excellent peripheral vision. It is estimated that in a grazing position, deer can see approximately 350 degrees around.
exploring-nature-doe-peripheral-vision1

smartKPIs.com Performance Architect update 22/2010

Performance Management case study: Plan - Do - Check - Act (PDCA) in a non-profit organization

Improving children’s quality of life in developing countries is today a priority of thousands of non-for-profit organizations. It is a difficult journey, influenced by many macro and microeconomic, political, social, cultural and religious factors. Many such efforts are structured in programs and projects. Monitoring not only their implementation, but also their impact is a requirement not only for tracking if they make a difference, but also for attracting new funding and other resources for future programs.

Overall, many non-profit programs employ robust performance management systems to support the achievement of their purpose. Designing and using such systems is not as straightforward as it may seem.

Organisation

A non-profit organization.

Setting

The organization operates in both urban and rural regions, implementing programs and projects targeting specific health and early childhood development issues.

Mandate

Improve the health and education of children in at risk communities in developing countries.

Instruments

A performance management system is in place, linking objectives, performance indicators and initiatives.

Performance indicators

To monitor the achievement of this objective a set of performance measures can be established, targeting some of the specific issues to be addressed. For example:

% Incidents of anemia

# Average scores on language and communication skills for toddlers

# Average scores for vocabulary tests

Scenario

The organization is following the standard Deming cycle applied in a performance management context: Plan-Do-Check-Act (PDCA). Each year it formulates a plan of activities, specifying objectives, performance indicators and projects to be implemented. It monitors results every six months, when following an analysis of these results, review meetings take place. They generally result in a recalibration of initiatives and sometimes new ones are established. Several programs and projects are running at any time, aimed at raising awareness in the community of health and educational issues. Additional projects targeted specific issues such as improving the economic situation of the families in the community, better equipping the kindergarten / primary school and training the educators.

Some success was reflected by the reduction of the incidents of anemia and improvement in the scores.

However, after a while, the performance reports started to reflect a stabilization of results and no further improvements were achieved.

Questions

  • What changes to the existing portfolio of projects and programs should the organization make to improve results?
  • How should the organization alter the Performance Management System in use to facilitate better results?
  • What approach to stakeholder management should the organization take to facilitate sustainable changes in the community?

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com


Discuss the case in the smartKPIs.com Forum

This Performance Management Case Study is now available in the smartKPIs.com Forum, where members of the smartKPIs.com community are invited to contribute to the discussion (after logging in by using their registration details). New members are invited to join (for free) the smartKPIs.com community.

Date: June 1st, 2010
Cate: Animals, Nature

Tags:

Meerkat on duty

meerkat-blending-in-standing-out

smartKPIs.com Performance Architect update 21/2010

Plan-Do-Check-Act (PDCA) / Plan-Do-Study-Act (PDSA), Philosophy and Performance Management

One of the administrative science domains that feeds Performance Management as a discipline is the quality movement. The Plan-Do-Check-Act (PDCA) cycle is at the core of the link between the two fields. It has been promoted and used in its current form for over 50 years. However, its roots can be traced back to ancient Greece.

Socrates (469-399 BC) formulated the dialectic inquiry process based on the idea of questioning and modifying understanding through the conflict of opposing ideas. This technique was further refined by Aristotle (384-322 BC), who enunciated a method of scientific investigation that employed both dialectics and empirical observations. His deductive reasoning approach combined with inductive elements became the foundation of the western scientific method, influencing philosophy and scientific inquiry for hundreds of years.

The famous arab scholar Ibn Sina, known to the western world as Avicenna (980-1037), proposed two stages of the scientific knowledge discovery process: conceptualizing what is meant and verifying what is being conceptualized, the basis of what evolved into what is being called the “Avicennian logic”.

Francis Bacon (1561-1626), considered one of the fathers of the scientific revolution, employed such an approach in defining a more modern version of the scientific method, with the balance leaning more towards the induction reasoning. The conceptualization becomes hypothesis and verification is separated into two further steps: data gathering and results analysis.

In the 20th century, Dr. Walter Shewhart (1891-1967) brought this process of inquiry traditionally used in research and education in business organizations. His collaborator and mentee, Dr. Edwards Deming (1900-1993) refined and popularized this concept as the Plan – Do – Check – Act (PDCA). Deming called it the “Shewhart cycle” and later replaced Check with Study, however in common use it remained the PDCA process, referred to as the “Deming cycle”.

In the 1990s, with the ascent of new management concepts such as the Six Sigma and the Balanced Scorecard, the PDCA process morphs into the new mutations. In Quality Management, the Six Sigma methodology employed the DMAIC project methodology: Define – Measure – Analyze – Improve – Control and the DMADV project methodology: Define – Measure – Analyze – Design and Verify.

In Performance Management, when the Balanced Scorecard as a concept needed a more robust application framework in mid 1990s, the PDCA came to the rescue again. It provided the elements required for migrating the Balanced Scorecard concept from a Management Accounting stage to the Strategic Management stage.

Today, at the down of a new phase of evolution of Performance Management as a discipline, these stages of scientific inquiry of process execution form the essence of the “management” component in “Performance Management”. They illustrate that Performance Measurement is required but not sufficient. Sound Performance Management practices based on the PDCA cycle give context and make the entire journey of improving performance interesting and relevant.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com


Relevant links

Aristotle: http://galileoandeinstein.physics.virginia.edu/lectures/aristot2.html

Bacon: http://plato.stanford.edu/entries/francis-bacon/

Ibn Sina: http://www.iep.utm.edu/avicenna/

Socrates: http://philosophy.lander.edu/ethics/socrates.html