Corporate Performance Management

CORPORATE PERFORMANCE MANAGEMENT

By Linking Balanced Scorecards and Six Sigma

Supervised by Prof. Amer Moujtahed

Husam Khanji

EMBA I

18 September 2005

EMBA Project Paper i Husam Khanji

Contents

Preface iii

Acknowledgements iv

1 Introduction 1

2 Corporate Performance Management CPM 2

2.1 Advantages 3

2.2 Main Components of CPM 4

2.2.1 Strategy 5

2.2.2 People 5

2.2.3 Measures 6

2.2.4 Process Excellence 7

2.2.5 Information Technology 7

3 Linking Balanced Scorecards and Six Sigma to Drive CPM 9

3.1 About Balanced Scorecard and Six Sigma 10

3.2 CPM Roadmap 15

3.2.1 Set Strategy 16

3.2.2 Define Voice of the Customer VOC 17

3.2.3 Deploy Key Performance Indicators KPIs 21

3.2.4 Improve Processes 25

3.2.5 Facilitate IT Solutions 29

3.3 Symbolising CPM System 33

4 Recommendations 34

4.1 Avoiding CPM Pitfalls 34

4.2 Enhancing Syrian CPM 37

4.3 Future Directions 39

5 Conclusion 40

EMBA Project Paper ii Husam Khanji

Appendix A: The Six Sigma DMAIC Roadmap 41

Appendix B: Where the Performance Goes 45

Appendix C: Sample of Key Performance Indicators

46

Abbreviations 47

Glossary 48

References 51

EMBA Project Paper iii Husam Khanji

Preface

In the name of Allah the most Beneficent the most Merciful

Since I have started doing my Executive MBA at HIBA, I was wondering if there is something like

a magic stick to make companies increases their performance. Syrian companies today needs more

than magic sticks to be able to compete in the new era of the open market economy.

As my background and my profession are in automation engineering, I was attracted to the idea of

providing managers and entrepreneurs with systematic managerial tools to help them know what

exactly they suppose to do and what kind of decisions to take in order to make their companies

develop and prosper.

A successful company and its leadership must have the ability to meet financial and customer

expectations in a changing global economy. To win customer confidence and meet business plan

objectives, the leadership team must not only develop a winning strategy, but also drive results

by turning the strategy into a reality through communication and a fact-based performance

measurement system.

In this project, the essential components of corporate performance management system have been

discussed and a roadmap steps towards achieving this system is described before several points are

discussed to avoid implementation pitfalls.

Syria, like any other country in the world, needs to have as much successful companies as possible

to strengthen its economy globally. I hope that this work will open the door for others of my

colleagues to elaborate more and go further with performance methodologies and tools to support

our organisations achieving high performance results worldwide.

EMBA Project Paper iv Husam Khanji

Acknowledgements

I would like to show my deep appreciation to those who made the Higher Institute of Business

Administration (HIBA) succeed in its first Executive Master of Business Administration (EMBA)

course.

To those who contributed in shaping my life to the way that I am enjoying now.

Particular thanks to Prophet Mohammad, (peace be upon him), who inspired me as he said: “Allah

likes a person whom perform perfectly for a job that he does”.

To Prof. Amer Moujtahed, whom, despite his busy schedule as the IT Director at Syriatel

Organisation, he managed to spare me hours for supervising this work.

To my parent whom they supported me during my whole life with their warm care and prayers.

Finally, many thanks are due to my wife for her patience and great support during my studies for

the EMBA course which consumed mostly from her time-share.

EMBA Project Paper Page 1 Husam Khanji

1 Introduction:

Syrian companies are increasingly facing high competitiveness from multi-national companies

trying to penetrate what was recently considered closed economy. Managers, therefore, can no

more survive with their companies with less than high-performance products and services.

Syrian entrepreneurs and executives should be able to effectively and efficiently manage their

companies as a captain in his airplane inside the cockpit with full of indicators and on-hand

information that will ensure the right direction of the plane, with enough resources and capabilities

to arrive safely to his destination and achieve his targets in the shortest period with no mistake.

Information is now considered as a strategic and competitive weapon towards achieving great

results. However, company has usually enormous number of historical and current data for every

aspect of the company. The big question faced is how we can use these data in order to make better

decisions and reach the goals of the company that meet the strategic needs of the business and

reduce the day-to-day fire-fighting activities.

The pressures on executives to understand and act quickly to every aspect of their organisation,

cause many to achieve high corporate performance management as a way of gaining sustainable

competitive advantage.

In this paper, we will provide the Syrian executives with integrated critical-to-success information

that gives them guidelines to lead their companies to a high level of performance. The study used

Balanced Scorecards and Six Sigma management disciplines in order to deliver successful

corporate performance management system.

We hope that this will eventually contribute to the growth of the overall Syrian economy and help

them to perform excellently in their own industry comparing to their competitors.


CORPORATE

PERFORMANCE MANAGEMENT

GREAT RESULTS

STANDARD RESULTS

Figure 2.1. CPM helps executives to achieve great results

2 The Corporate Performance Management (CPM)

Profitability is a business target but not the main purpose of business, which is to provide products

and services that customers want, leading to profits.

Successful organisation need; a healthy cash flow, improving profitability, have committed and

preferably happy employees, cooperative and supportive suppliers, high quality products and

services; and customers whose expectations are constantly being exceeded.

The manager needs to regularly improve him/herself in the control of processes, planning of

activities, measuring performance, training of staff and delegating effectively. Decisions have to be

made during the business day, which depend on answers to these fundamental questions:

■ How are we doing? ■ Why? ■ What should we be doing?

Corporate performance management1’, (CPM), “is an umbrella term that describes all of the

processes, methodologies, measures and systems needed to measure and manage the performance

of an organisation.” It is about enabling and engaging everyone in an organisation towards

1 The definition of corporate performance management (CPM) has remained consistent since industry analysts Gartner Research introduced CPM in 2001.


achieving high results. CPM help executives to have full control on their businesses and give

answers that they need, aligned with their strategy, in order to achieve great results (Figure 2.1)."

2.1 Advantages

Corporate performance management, CPM, will give the following benefits to the executives who

will adopt this system:

1. Balance short-term gain with long-term value creation.

2. Support collaboration between all different aspects and departments of the

organisation.

3. Utilise corporate capacities and resources efficiently and effectively.

4. Customers are considered the centrepiece of the organisation's performance.

5. Provide transparency with clearly identified measures and targets.

6. Focus on financial and non-financial KPIs.

7. Sustain and enhance performance.

8. Bridge the gap between strategy with execution (Figure 2.2).

9. Automate the processing of data to accelerate and integrate CPM.

10. Facilitate process flexibility and high responsiveness to the market demands.

Figure 2.2. CPM Bridge the gap between strategy and execution


The result is a performance premium on the company’s market shares, one that further rewards

stretch commitments and performance delivery as a closed control loop.

2.2 Main Components of CPM

The Figure below illustrates a corporate performance management system comprising five key

components derived from my research on several books, articles and related websites. (Please see

list of references at the end of this paper).

We will describe in the following the five components that I have chosen with the reason behind

selecting them. These components are: strategy, customer satisfaction, key performance indicators,

process excellence and information technology.

Figure 2.2. Main components of CPM


2.2.1 Strategy Strategy is the overall plan for deploying resources to establish a favourable position. The clear

strategy of the organisation is the main driver for the CPM and it has to be achievable and

convertible into executable objectives.

At most companies, strategy is a highly abstract concept, often confused with vision or aspiration,

and is not something that can be easily communicated or translated into action. But without a clear

sense of where the company headed and why, lower levels in the organisation can not put in place

executable plans. In short, the link between strategy and performance cannot be drawn because the

strategy itself is not sufficiently concrete.

As profits come from core competencies2, senior executives should have their strategy based on

their competencies, which will shape their competitive advantage through adding value to their

businesses in the targeted market segments.

Strategy is the first and most important ingredient of a successful CPM system because it provides

vision and targets at every level of our organisation.

2.2.2 People

With today’s global and diverse workforce, competitive environment and increasing customer

demands, the work environment is changing. Work no longer means a physical job, instead, it is

becoming more critical that employees are motivated to be intellectually involved. The role of

leaderships evolving, such that instead of the workers doing perfect work, it is the leadership that

must do perfect work. Among the first and foremost responsibility of leadership are to inspire

workers to do their best, to value their contributions, and to create new opportunities for innovative

solutions.

2 Source: Business Idea to Enterprise Development, Paolo Gubitta, Damascus, March, 2005 EMBA course at HIBA


People are expected to do the right things in order to execute the objectives of the company. Doing

the same job over and over, at the same level of efficiency and productivity, is no longer sufficient

for organisational success. For an organisation just to maintain its existing relative performance, it

must continually improve ideas.

Executives have to motivate and develop their staffs, at the end of the day, no process can be better

than the people who have to make it work. The selection and development of these people are

essential ingredients in their success. They should have the ability for learning to meet the growing

of the business.

While improving the capabilities of a company’s workforce is no easy task, often taking many

years, these capabilities, once built, can drive superior planning and execution for decades of

successful performance management system.

2.2.3 Measures

What you measure is what you get. Senior executives understand that their organisation’s

measurement system strongly affects the behaviour of managers and employees. In order to gain a

competitive edge in today’s market, successful managers are using measures to reveal

opportunities for improved business performance, efficiency and profitability.

We can reveal strategic measures that are vital and valuable for the development and survival of the

company as key to CPM. These measures will help executives to see clearly how their business

exactly is doing and how to drive performance.

However, measures can be also classified according to the level of management and to the domain

of users as following3:

3 We can also classify measures up to the different stakeholders’ interests on the company.


(A) Operational Measures: provide everyone within the operational level with the information and

strategic context they need to do their work. It is about getting the facts and making informed

decisions.

(B) Tactical Measures: deliver an aggregate view of operations that allows management to

optimise current practices, within established constraints. It is about managing against goals,

defining accountability, and enabling measurement.

(C) Executive Measures: provide executives with all necessarily information when they make

long-term decisions and strategic planning.

2.2.4 Process Excellence

This is another essential element of CPM discipline. It is about making quality the operating

system, and spread across every part of the business. Operations are essential to be designed to

prepare managers to enhance performance through operational excellence. Executives should have

the ability to set the right frameworks and techniques for performance improvement and analyse

successful operations to maximise their competitive advantage.

Continuous improvement of the quality of the organisation’s processes lies on the ability of the

organisation to learn and rapidly transform that learning into action and to tackle the greatest

“points of pain” immediately.

The internal processes of the company should be customer-driven and flexible as much as possible

so executives will have the ability to respond quickly to customer’s needs and competitor activity

with lowest cost of processes modifications.

2.2.5 Information Technology

Nowadays, technology is becoming more and more an essential element for success. Every day

more powerful and simple IT applications that facilitate an integration and process acceleration are

coming to the market and it is matter of finding the most suitable technology that needed by

different level of an organisation that should have the following specifications:


It is very important to have sufficient IT solutions in place that can provide a single source for

information. This can give executives instant visibility on their businesses regardless to any

geographical constraints which highly assist to achieve successful CPM.

Hence, the role of technology is to improve the CPM process by providing an integrating and

accelerating working environment. CPM exploits technology by combining all the management

processes into a single, closed loop application focused on the implementation of strategy and

automate the processing of ratios, currency conversions, allocations, elimination of minority

interests, the consolidation of results as well as Statistical Process Control, SPM, These

fundamental processes cannot be done so easy and quickly without the great support from available

information technology solutions.


3 Linking Balanced Scorecards and Six Sigma to Drive CPM

While concepts behind the Balanced Scorecard and core Six Sigma methodologies are not new, a

powerful management tool can be crafted through the unification of these two proven strategies.

An approach that combines the targeted performance indicators of a Balanced Scorecard with the

statistical rigor of Six Sigma can be used to effectively make an organisation focus on the

achievement of its strategic goals. Adopting this structured combination builds confidence in

proposed process improvements.

Balanced Scorecard Methodology is an analysis technique designed to translate an organisation’s

mission statement and overall business strategy into specific, quantifiable goals and to monitor the

organisation’s performance in terms of achieving these goals. While Six Sigma has become an

industry for driving improved growth of profitability worldwide as a methodology for pursuing

continuous improvement in customer satisfaction and profit that goes beyond defect reduction and

emphasises business process improvement in general.

A Balanced Scorecard approach provides the mechanisms to drive organisational alignment

sustain improvements and maintain equilibrium across the enterprise. Based on statistics and

aspects deemed most ‘critical to quality,’ Six Sigma could further focus the organisation’s

improvement efforts.

In other words, Balanced Scorecard provides us with the tools for understanding and translating

strategy into interrelated measures, while Six Sigma helps to analyse, improve and control the

processes that produce these measures. Next, we will give more information about these two

managerial approaches before linking them together to drive CPM.


3.1 About Balanced Scorecard and Six Sigma

In the following, we provide basic information about Balanced Scorecard as well as Six Sigma

disciplines4:

(A) Balanced Scorecard:

With Balanced Scorecard, management can model its desired future, set the plans to reach it,

monitor its progress along the way, and gain insight from day-to-day results to adjust the course.

While measurement is a powerful motivator to improve performance, it is insufficient for today’s

performance-driven organisation to focus all attention and efforts towards short-term, lag measures,

while ignoring intangible assets such as continuous improvements efforts or innovations that

provide the foundation for future financial success.

We can devise a ‘‘Balanced Scorecard’’—a set of measures that gives top managers a fast but

comprehensive view of the business. The Balanced Scorecard includes financial measures that tell

the results of actions already taken. And it complements the financial measures with operational

measures on customer satisfaction, internal processes and the organisation’s innovation and

improvement activities—operational measures that are the drivers of future financial performance.

Executives also understand that traditional financial accounting measures like return on investment

and earnings per share can give misleading signals for continuous improvement and

innovation—activities today’s competitive environment demands. The Balanced Scorecard lets

executives see whether they have improved in one area at the expense of another. Knowing that

will protect companies from posting suboptimal performance.

Think of the Balanced Scorecard as the dials and indicators in an airplane cockpit. For the complex

task of navigating and flying a plane, pilots need detailed information about many aspects of the

4 Please refer to Appendix A for more information about Six Sigma.


flight. They need information on fuel, airspeed, altitude, bearing, destination and other indicators

that summarise the current and predicted environment. Reliance on one instrument can be fatal.

Similarly, the complexity of managing an organisation today requires that managers be able to

view performance in several areas at once.

The Balanced Scorecard allows managers to look at the business from four important perspectives.

(See Figure 3.1 ‘‘The Balanced Scorecard Links Performance Measures.’’) It provides answers to

four basic questions:

First, how do customers see the company? Find out by measuring lead times, quality, performance

and service, and costs. Second, what must the company excel at? Determine the processes and

Figure 3.1. The Balanced Scorecard links performance measures


competencies that are most critical, and specify measures, such as cycle time, quality, employee

skills, and productivity, to track them. Third, can the company continue to improve and create

value? Monitor the ability to launch new products, create more value for customers, and improve

operating efficiencies. Fourth, how has the company done by its shareholders? Measure cash flow,

quarterly sales growth, operating income by division, and increased market share by segment and

return on equity.

Scorecard meets several managerial needs. Most importantly, the scorecard brings together, in a

single management report, many of the seemingly disparate elements of a company’s competitive

agenda: becoming customer oriented, shortening response time, improving quality, emphasising

teamwork, reducing new product launch times, and managing for the long term.

Implementing a Balanced Scorecard requires obtaining consensus on deliverables, strategy,

performance indicators and organisation design that aligns with business process.

In short I have listed some key benefits of Balanced Scorecard in the following:

• Translating mission and strategy into operational measures

• Aligning corporate strategy with business units and shared corporate services

• Targeting individuals' goals and incentive compensation to make strategy everyone’s

everyday job

• Setting priorities for financial resource allocation

• Enabling continuous strategic feedback and learning


(B) Six Sigma:

A quality methodology can produce significant benefit to business and organisations through

customer-focused, statistics-based process improvement. In addition to the rigorous methodology

and the focus on data-driven decision-making, distinguishing characteristic of Six Sigma is the

organisation of dedicated resources as well as part-time roles, established to support a quality

programs.

Six Sigma advocates quality management a component of improving performance through reduced

overheads and increased competitiveness and it is a way of thinking about the business, about

processes and about cause-and-effect relationships.

Many of the tools used for Six Sigma also have provided insight into processes when used in

conjunction with TQM5 and other process improvement methodologies. Six Sigma provides a new

way to use existing tools as well as new ones. It is the combination of tools and the way they are

employed that gives Six Sigma its competitive advantage.

Six Sigma DMAIC, (Define, Measure, Analyse, Improve, Control), methodology is more than just

tools and a methodology. it goes beyond the undesirable causes of their effects and removes them.

It can be thought of as a roadmap for problem solving and process improvement. Figure 3.2

contains definitions of each phase of this roadmap.

Since the target of the CPM is to become more productive and efficient. With Six Sigma, we can

decrease process cycle time and cost with improved quality but it has to be conducted wisely.

Six Sigma benefits stem from a significant improvement in process performance, which in turn

results in:

5 Total Quality Management


• Increased revenue from removing process capacity limits as well as excellent improved

processes and products

• Higher productivity

• Dramatic reduction in defects, cycle time and cost

• Standardised improvement methodology across the organisation

• Greatly improved customer satisfaction level

• Reduced costs from rework and elimination of non value-adding work

Define: Critical-to-quality characteristics (CTQs) are defined by understanding voice of

customer VOC.

Measure: Identify the key internal process that influences CTQs and measure the defects

generated relative to identified CTQs.

Analyse: Understand why defects are generated. Brainstorming, statistical tools, and so forth are

used to identify key variables that cause defects. The output of this phase is the

explanation of the variables most likely to drive process variation.

Improve: The objective is to confirm the key variables and then quantify their effect on the

CTQs, identify the maximum acceptable ranges of the key variables, make certain the

measurement systems are capable of measuring the variation in the key variables, and

modify the process to stay within the acceptable ranges.

Control: The objective of this final phase is to ensure that the modified process now enables the

key variables to stay within the maximum acceptable ranges using tools such as

statistical process control (SPC) or simple checklists.

Figure 3.2. Six Sigma DMAIC roadmap


3.2 CPM Roadmap

In order to achieve successful CPM system in our organisation, I have identified five main steps

derived from both Balanced Scorecard and Six Sigma disciplines. Figure 3.3 shows the flowchart

of those five steps which start with setting the strategy (derived from Balanced Scorecard); then

defining the voice of customer (derived from both Balanced Scorecard and Six Sigma); third step is

to deploying the key performance indicators, which represent the critical measures of the system

(derived from Balanced Scorecard); we then link these indicators with the fourth step to improve

the organisation's processes (derived from both Balanced Scorecard and Six Sigma); before we

finally facilitate the needed IT solutions which plays an important role to integrate and accelerate

the whole steps and processes to achieve successful CPM system.

It is important that I mention here that I am not providing full tools for CPM, rather, it is only a

roadmap for executives to know how to reach their targets and goals by understanding the basics

behind CPM system.

Set strategy

Define Voice of the

Customers

Deploy Key Performance

Indicators

Improve Processes

Facilitate IT Solutions

Step 1

Step 2

Step 3

Step 4

Step 5

Figure 3.3. Flowchart for implementing CPM


3.2.1 Set Strategy

The Balanced Scorecard is primarily a mechanism for strategy implementation by translating that

strategy into specific objectives, measures and targets and monitoring of the strategy during

subsequent periods. Companies deploying a strategy based on core competencies or unique

capabilities may wish to start their strategic planning process by identifying these critical

competencies and capabilities for their internal business process perspective and then for the

customer perspective, selecting customers and market segments where their competencies and

capabilities are most critical for delivering customer value.

There are three main foundation stones for successful strategy: first, to have clear long-term and

simple objectives that can be achievable and translatable into goals. Theses goals should be

communicated and spread over the organisation to every individual that support in achieving the

objectives of the organisation. Second, we must well understand the environment, (SLEPT

factors could be very helpful in this case). Third, to have objective appraisal approach towards

evaluating the present and required resources for achieving the strategy and implement the action

plans effectively.

Figure 3.4. Common elements of successful strategy


In order to sustain the performance of an organisation over time, everyone within the organisation

must understand the strategy and tailor their activities and behaviour accordingly; and the

governance process must be linked to the strategy.

Following are some of important points should be taken into consideration during this step:

• Clarify and gain consensus about strategy

• Communicate strategy through the organisation

• Align departmental and personal goals to the strategy

• Link strategic objectives to long-term targets and annual budgets

• Identify and align strategic initiatives

• Perform periodic and systematic strategic reviews

• Obtain feedback to learn about and improve strategy.

3.2.2 Define Voice of the Customer VOC

Voice of the Customer (VOC) is part of the Six Sigma approach describes the process by which

customers stakeholders communicate their requirements from the organisation and its products and

processes.

We use ‘customer’ terminology to represent anyone who has an interest in the successful of the

CPM. A list of customers may include the following:

• Employees of the organisation

• Customers of the organisation


• Suppliers to the organisation

• Shareholders of the organisation

• Society in which the organisation operates

Different customers may have different needs. For example, employees would like to have a good

working environment, competitive compensation, more tools to make their jobs easier and the

opportunity to grow. Customers are interested in receiving good parts on time at a reasonable price.

Customers also want better, faster and cheaper products or services continually. Suppliers want

more business, better prices and less interference by the customer. Shareholders want value for

their money, that is, increasing market value and dividends.

Voice of customer (VOC) engages in a continual dialogue regarding customer requirements in

order to set the performance bar for vital products and processes though critical to quality metrics

(CTQs) which obviously underline the critical to customer satisfaction.

Balanced Scorecard consider employee satisfaction, retention and productivity as core

measurements for learning and growth perspective of an organisation, whereby Six Sigma

initiative uses Voice of Customer (VOC) tool to underline the critical to customer satisfaction.

Figure 3.5 illustrates the process of obtaining VOC as s continuous closed-loop action. We first

understand customers by asking him and listening to his needs before we translate these needs into

clear requirements. From these requirements we can get the critical-to-quality (CTQ) factors which

will be used during the improve processes step to shape plans and actions.

In my research, I have concentrated more on two key customers, employees as internal customers

and those external customers who usually pay the bills.


(A) Internal VOC:

Information age companies will succeed by investing in and managing their intellectual assets.

Innovation and improvement of products, services, and processes will be generated by re-skilled

employees, superior information technology, and aligned organisational procedures.

At the end of the day, CPM systems will not succeed if employees cannot have the willingness and

capabilities to work on it. Therefore, it is so important for executives to understand their own

employees and know how to boost their productivity and commitment. The points mentioned in the

following, identify some of the important factors during the VOC process for internal customers:

• Capabilities: the current status of employee capabilities and the objective target for new

capabilities

Figure 3.5. Voice of customer


• Rewards/recognition: Incentives should always be set on individual ability to implement

action plans that meet or exceed strategic goals

• Communication: Executives to provide tools to let the truth be heard and information to be

circulated across their organisations

• Culture factors A reasonably healthy climate is a pre-requisite to meaningful

improvement in performance

• Assign responsibility: CPM is all about organisational accountability. Goals are, in

general, only met if someone is made responsible for them

The company need to look at how it selects employees, does performance appraisals, approaches

succession planning, and recognises performance.

(B) External VOC:

Identifying the customer is a critical step to understand and design our products and services that

meet customer requirements. The objective of this step is to understand the customer’s needs,

demands, requirements, desires, wants, whims, and, if possible, those things that the customer does

not even know they want just yet in order to reach to the customer satisfaction.

Consider products that a customer has purchased that do not meet his or her exceptions. Or perhaps

the product is not user-friendly or has poor quality. Will a customer take the time to complain about

the product or services? Well at least the customer will avoid purchasing products from the same

company in the future. The importance of achieving customer satisfaction is an important attribute

of Six Sigma implementation.6

6 Word-of-mouth behaviour is significant. If a large problem is resolved to the customer’s satisfaction about 8 person will be told about the experience; if the customer is dissatisfied with the resolution, 16 other persons will be told. (Goodman 1991).


We should finally consider also the relationship between the internal and external customers

performance which is very much related to variability in the customer experience. Therefore,

businesses must focus on reducing variability in local “people” processes (the “who” and “how” of

implementation). The power of a local focus on reducing variability lies in its simplicity and

flexibility. Each unit or department can identify and correct its own problems by identifying their

VOC tool.

3.2.3 Deploy Key Performance Indicators KPIs

This is a critical step as it shapes the backbone of the successful measurement system. We should

decide what need to be measured, how it needs to be measured and when. Translating strategic

imperatives into a network of clear, simple measures is the first step in the Balanced Scorecard

approach. When appropriate performance measures are aligned along with the strategy and

objectives, they provide greater insight into how the system is performing today, and what it may

anticipate in the future.

The art of selecting KPIs: As we have already identified the strategy which can be translated into

objectives. (step 1), followed by identifying VOC that will underline the CTQs, (step 2); we can

then define the key to success indicators which we call it KPIs. Figure 3.6 describes the way we

should obtain the KPIs and link them to our targets as they are derived from two different sources:

strategy and VOC7 to meet customers' needs and business objectives. KPIs should reinforce the

desired organisational behaviour for the long term as well as for the short term strategy.

KPIs can be implemented by combing elements of Balanced Scorecard and Six Sigma approaches,

which:

• Breaks strategic themes down to vital objectives

• Assigns KPIs/Targets to vital objectives


• Measures objectives against targets

KPIs should be impartial, ensure trustworthiness of quantifiable results and match concentration

areas of the business. As matter of fact they have to be SMART, i.e.: Specific, measurable,

actionable, relevant, and timely.

We can classify KPIs into three types:

• Lagging: which provides historical look at past performance

o Examples: Quarterly revenue, employees turnover

• Leading: provide indicators that are predictive for future results

o Examples: Inspection results, training-completion rates

• Real-time: show where things are right now. They allow corrective action to be taken

immediately to affect the outcome

7 Appendix C shows sample of Key Performance Indicators.

Figure 3.6. Obtaining KPIs


o Examples: Stock prices, inventory levels8

The following Figure (3.7) shows possible measures which can be translated into SMART KPIs:

FFuunnccttiioonn

No HR Finance Sales Marketing Processes IT

1 Employee

satisfaction

Return-on-

investment

Sales to cost

ratio

Market share Lead time System

availability

2 Employee

turnover

Profitability New account

to existing

ones

Customer

satisfaction

Product to

market

Backup

system

3 Employee

productivity

Revenue Customer

acquisition

Quality Information

security

Figure 3.7. Key Performance Indicators

Business Performance Index:: Performance is measured against the planned corporate growth

and profitability goals. A total of 100 points could be achieved as an index by giving weight for

every categories of the measurement system according to the contribution amount of each category

to the whole performance of the organisation. This index provides the company’s various

stakeholders with relevant and transparent information that contributes to an accurate valuation of

the company.

KPIs Colour Codes: Colour-coded status target values for quick review of progress. The red

colour means that the KPI is not achieving the lowest level of performance acceptance. While the

yellow colour indicates that the KPI is doing fair and closer to hit its target. Lastly, the green colour

shows a healthy measure has been accomplished. The levels are varies from corporate to another

8 Source: The Four Disciplines of Execution, Franklin Covey, Training course, 2005.


according to several internal and external factors related to the strategy and objectives behind every

KPI specified as mentioned above. Figure 3.8 presents the KPIs colour codes as thermometer of the

measurement system.

KPIs should be then deployed, communicated, archived and backed up properly as these data are

the inpurts of CPM system.

3.2.4 Improve Processes

This step is an on-going assessment of process capability and customer satisfaction with the

business performance. Customers see organisations through their processes not through their

structures.

Figure 3.8. . KPIs Colour codes


In order to reach process excellence, which is one of the main components of CPM system, first we

have to start with an analysis phase where organisation’s key processes and CTQs are obtained and

compared to the KPIs. The next phase will be to improve these processes to correct any

unacceptable variations and finally to monitor these improvements in the final control phase.

Six Sigma approach provides the tools and methodologies that are needed to implement these

phases powerfully.

Functional specialisation must be integrated into customer-based business processes. Mass

production and service delivery of standard products and services must be replaced by flexible,

responsive, and high-quality delivery of innovative products and services that can be

individualised to targeted customer segments.

We explore the underlying factors that actually drive results.

Once an organisation has decided on the right measures, executives need to set and specify targets,

and how they are going to delivered. To do this executives typically invoke the processes

formulation (i.e., deciding on how to achieve the target measures and on what exactly actions or

tactical plans will be required to implement); analysis (to see where the variances are and to decide

on what to do about them), improve (and allocating resources to the tactical plans); and control

(monitoring the actions and results of the tactical plans and to see if the target measures set over

time are still on course to be achieved).

(A) Analysis:

In this step we will use three main tools:

• Failure mode and effects analysis (FMEA) from Six Sigma

• Project priority index from Six Sigma

• KPIs Interlinked KPIs from Balanced Scorecard.


Failure mode and effects analysis (FMEA): that can analyse and connect every success or failure

to its original causes in order to repeat the success stories and prevent the bad cases. Taking into

account the CTQs that we could find from VOC and monitor by the KPIs system.

We identify the factors or Xs likely to have the greatest impact on the response variable. These

factors are classified as either controllable or uncontrollable. If a causal factor (X) is controllable

and contributes significantly to variability in the response variable (Y), then an opportunity to

achieve a better result presents itself by controlling the causal factor. By focusing on causal factors

that have a statistically proven impact on a process, the organisation gains an important advantage

in being able to predict the effect of proposed changes and create an easily understood family of

value propositions.

Interlinked KPIs: The concept behind the interrelationship between these different components

that executive can monitor and predict the future of the organisation’s performance. For example,

the organisation is currently doing fine in the financial measures but on the other hand the

employee satisfaction and internal quality are poor. As a result, external quality felt by the

customer will begin to decline. It is intuitive that if this trend continues, customer satisfaction and

financial performance will begin to decline as well.

A comprehensive CPM system must specify how improvements in operations, customer service,

and new products and services link to improved financial performance, through higher sales,

greater operating margins, faster asset turnover, and reduced operating expenses.

On the other hand, employee attitudes affect customer attitudes, and customer attitudes affect

financial performance.

The Balanced Scorecard should have the ability to drill down to different levels of measurements

and review the measures associated with those activities that create the greatest organisational

leverage.


Learning and Growth

Internal Process

Customer

Financial New Sales Increase Cash Flow

Customer Retention Customer Satisfaction

Cycle time Process

Satisfied Trained

Return on Capital

Increase Profitability

Figure 3.9. . Interlinking measures using Balanced Scorecard

The following Figure 3.9 illustrates an example of interlinked measures using Balanced Scorecard

approach.

Once we have understood and analysed the linkages between measures and causes factors

on results, we can then justify areas that we have to improve for either saving cost or

increasing quality of products and services.

Project priority index (PPI): It is one of Six Sigma methodology that can identify the most

important area for improvement according to the following formula:


S = potential savings generated by the project

P = probability of project success

C = cost of executing the project

T = time to complete the project

Figure 3.10 shows multiple project evaluation using PPI. The Figure shows PPI for four

projects. From the analysis, reduction in billing errors and yield improvement appear to

have higher PPIs than the other projects.

Project Annualised

Savings

Probability

of Success

Total

Cost

Time for

Completion (Year)

PPI

Inventory

reduction

250,000

SYP

80% 100,000

SYP

0.5 4.00

Yield

improvement

2,000,000

SYP

60% 250,000

SYP

0.33 14.55

ISO 9001

registration

5,000,000

SYP

90% 500,000

SYP

1.5 6.00

Billing errors

reduction

100,000

SYP

75% 10,000

SYP

0.25 30.00

Figure 3.10. Project priority index for multiple projects

However, we can choose the project depending on available resources and customer

demands as well as the corporate need, despite the PPI index.

(B) Improve:

PPI = S P / C T


Identify possible solutions and optimise existing processes to reduce defects, and to meet customer

expectation is the prime objective of this stage. Listening to customers during VOC step can create

ideas for the way of improvement. Competitors are another source of ideas. Six Sigma also provide

tools 9for innovation while Balanced Scorecard emphasise on learning and growing capabilities of

the organisation.

By using the right management information system, (IT solutions), we can get drastic assistance

specially after the revolution of utilising artificial intelligence (AI) in these solutions. This paper

will not discuss more about these tools since they can be handled by specialists; while our aim from

this thesis is to clarify the way of achieving successful CPM for executives.

(C) Control:

The last and continuing step in this process involves monitoring changes and key measures. The

Balanced Scorecard should have the ability to drill down to different levels of measurements and

review the measures associated with those activities that create the greatest organisational

leverage.

Continuous and proactive mentoring of performance is particularly important in highly volatile

competitive environment. We can control process by keep monitoring the variation between out

targets and KPIs. Striving for “greens” and fixing the “reds”.

3.2.5 Facilitate IT Solutions

Both Balanced Scorecards and Six Sigma encourage the usage of information technology in order

to ensure strategy spread across the organisation (Balanced Scorecard) and to reduce process cycle

time with high quality of data (Six Sigma).

I am using IT solutions to describe the required software and hardware that is necessary in order to

achieve our CPM goals and objectives.

9 Brainstorming, TRIZ, design of experiments (DOE) and benchmarking are some example (see Glossary).


IT solutions offer decision-makers fast, simple access to reports and analysis. self-service reporting

and familiar interfaces are tailored to the different skills and needs of individuals, enabling

everyone to generate reports on their own This ensures that large volumes of scattered historical

and current raw data are converted into accurate information for reporting, analysis and

forecasting.

Hence, technology allows CPM techniques to be used and to automatically predict future

performance that can then compared to a previously set targets with any variances being reported to

users all without user intervention.

We need information technology in order to integrate and accelerate the whole processes of the

CPM system to reduce all processes cycle time, hence costs, and to ensure that information is

shared at the right level to the right people at the right time. Proper IT solutions will enable

information at every aspect of the organisation instantly and accurately, thus it highly enhances the

successful of CPM implementation as Figure 3.11 illustrates.

Figure 3.11. . IT solutions enable information to CPM


Appropriate IT solutions within the organisation, should have the capability at least to meet the

CPM goals and objectives and have the data collection capabilities for proper measurement system

and accurate KPIs.

Most tedious statistical calculations for process analysis can now easily be relegated to a computer.

I believe that for a successful CPM system, all those who are involved in the system should have

good versatile statistical software used in their training and readily available for use after training

sessions.

Therefore, organisation should choose a common computer program that offers many statistical

tools, ease of use, good pricing, and technical support.

It is very important that executive facilitate and not exceed what organisation need from IT

solutions.

Presently, On-Line Analytical Processing (OLAP) technology can provide users with fast, easy

access that provides an analytical tool for decision support system DSS which will highly meet our

requirements.

The following are main features that CPM system should enjoy with proper IT solutions tailored to

integrate and accelerate this system.

• Reporting: Produce and access reports for all levels of users across an organisation by

transforming and presenting real-time information in business context throughout the

enterprise

• Access and receive information in a timely manner in order to make informed business

decisions

• Complex computations, business processes and algorithms can be stored as standardised

processes so that everyone, regardless of their skill level, can access them


• Integration of analytic results and processes

• Provides a high-level view of key performance indicators at the intersection of selected

business dimensions

• Users can get the answers they need without constantly involving IT

• Consolidation: Consolidation involves the aggregation of data. This can involve simple

roll-ups or complex groupings involving interrelated data. For example, sales offices can be

rolled up to districts and districts rolled up to regions

• Drill-Down: OLAP can go in the reverse direction and automatically display detail data that

comprise consolidated data. This is called drill-down. For example, the sales by individual

products or sales reps that make up a region’s sales totals could be easily accessed

• Slicing and Dicing: Slicing and dicing refers to the ability to look at the database from

different viewpoints. One slice of the sales database might show all sales of product type

within regions. Another slice might show all sales by sales channel within each product

type. Slicing and dicing is often performed along a time axis in order to analyse trends and

find patterns10

• Visualisation: present data in charts, graphs and geographic maps within multiple

applications. KPIs can presented in different dashboards meeting personal features for

users and specific information needed.

By leveraging existing data and system assets and bringing CPM to everyone through familiar and

intuitive interfaces, IT solutions help organisations leverage existing skill sets, serve all user types,

lower total cost of ownership and deliver critical business intelligence to more people faster than

ever.

10 Source: Information Technology Course, Prof. Amer Moujtahed, Damascus, 2005 EMBA course at HIBA


3.3 Symbolising CPM system

Before we close this chapter, I would like to symbolise the above described steps to achieve CPM

as in Figure 3.12 as street built from IT solutions for integration and accelerations of the other 3

steps that are symbolised as a vehicles starts with strategy to push other two vehicles of voice of

customer which in turn helps to push the improved processes. These vehicles need to drive under

clear vision which is glimmered by the Key Performance Indicators of the CPM system.

Eventually, all vehicles will help executives to arrive to a successful CPM.

I suggest using sky-blue for successful CPM system. This colour represents the utmost targets of

our CPM system when all of our KPIs have accomplished its green colour, then we can confirm

to executives by this sky-blue colour that our corporate is achieving great results. We can specify

the level of score according to the corporate strategy and market environment and individual

KPIs.

Figure 3.12. Symbolising steps to achieve CPM


4 Recommendations

Executives should look on the corporate performance management as a powerful tool that can

assist them to make their organisation achieving great results continuously and response to the

market changes proactively so they can have a sustainable competitive advantage.

Internal and external customers’ satisfaction with process excellence should be the focus of

executives to meet the goals and objectives of their strategy that has been built on the competencies

of the company.

4.1 Avoiding Implementation Pitfalls11

Executives will have the full responsibilities on making the CPM succeed by managing changes in

their organisations and we should know that CPM is a driver of cultural change with a large and

lasting impact on the organisation’s capabilities, strategies, and competitiveness. It takes time and

the experience of repeated results.

The job is not over once initial results are achieved. Transition of improvements into ongoing

performance is where the real power lies. Results should be sustainable to have an effect and

actually be realised. Every improvement raises the bar of expectations so improvement must be

sustained to remain in the same competitive position. Management and leaderships actives must

continue. Build the organisational muscle to stretch further each time. This is a journey, not a day

trip. Transformations do not happen quickly and they stick.

(A) Strategy:

Executive should avoid the following while setting and implementing his / her strategy across the

organisation:

11 See also Appendix B.


• Lack of passionate commitment to achieving dramatic results

• Setting low or no expectations for achievement with CPM

• Not treating CPM as a leadership initiative and giving it the highest priority

• Not making tie for CPM initiative, somehow perceived as extra work that must not be

important

• Focusing on one overall deployment strategy

• Strategy is not lined up with critical projects or program areas

• External/competitive position of an organisation is not properly reflected into the strategy

(B) People:

A primary task to achieve great results by using CPM is to create a culture wherein people have a

tremendous opportunity to be heard and, ultimately, for the truth to be heard. It is very important

also to have the right people from the beginning and try not to de-motivate them.

Avoid one of the following employees’ possible failures:

• Failure to enlist employees enough in problem-solving activities

• Lack of an established process for encouraging employees intellectual involvement

• Insufficient training given to employees

• Lack of time given to employees for their active involvement

• Productively emphasised over creativity and quality


• Lack for empowerment to identify, prioritise, and improve process

(C) Measures:

Keep in sight that CPM concentrates on customers, not just reaching certain numbers.

Avoid the following

• Measures are not specified to the proper level

• Unreliable data collection capability

• Developing metrics that measure the right thing, but cause people to act in a way contrary

to the best interest of the business to simply "make their numbers”

• Developing so many metrics that you create excessive overhead

• Developing metrics that are complex and difficult to explain to others

(D) Execution Processes:

The emphasis should be on starting small in one area of the business that could include the

financial process and then expand to other areas like internal and external customers and then

moving across into other areas.

Executive must avoid the following areas that can cause execution failure:

• Business processes are not lined up with strategies and business plan objectives

• Focus on non-critical areas of the business

• Be rigid and slow in response to the internal and external rapidly changed environments


(E) IT Solutions:

Although IT solutions are meant to speed up processes, it can turn into an obstacle and lead to

losses to organisation if not properly deployed.

Following is the avoid list which can help executive to succeed in implementing proper IT

solutions:

• Measures are not measured properly

• Use non-local terminology cause misunderstanding

• Facilitate complicated reporting system

• Implement IT solutions as separate processes often using different and incompatible

technologies12

• Lack of users training

• Lack of support and proper system maintenance

4.2 Enhancing Syrian CPM

Finally, just to make sure that this paper will give a proactive impact on the Syrian economy, I

would like to initiate an idea for the government to take into consideration in order to improve

CPM in our organisations. The main objective of this idea is to increase the awareness of the Syrian

organisations on how they can achieve high performance level.

12 For example, a Word document may be used to capture the strategic plan, spreadsheets used to enter budgets, the general ledger to report actual while a general purpose OLAP tool is used to analyse variances


A special governmental performance committee organised with an affiliation of a recognised

European Union performance body to publish a periodical that rank Syrian organisations according

to their performance level and to ensure transparency and visibility.

Government may give a kind of support for highly performed organisations, such as reduction on

taxes, electricity bills or any other motivation incentives to support every company that is serious

to implement CPM system.

Following, are the key points that could be considered for the ranking system:

(A) Performance reporting: (rank 1 to 5)

Key measures to

monitor overall

performance.

Performance results indicate positive improvement. Strategic and

business plans are modified accordingly based on results achieved.

Information is readily accessible through executive information

systems. Information needs and systems are periodically reassessed

based on changing business needs and identified reporting gaps.

(B) Customer satisfaction: (rank 1 to 5)

Utilisation of

customer satisfaction

levels.

Customer satisfaction is a key driver of strategic and business

planning, and is considered in performance evaluation and incentives.

Techniques used to collect customer satisfaction information are

constantly being improved.

(C) Process excellence: (rank 1 to 5)

Key measures to

monitor service

quality and

efficiency.

Processes and services results are monitored over time. Operating and

service measures are linked to strategic objectives and priorities. The

information is accurate and timely. Achievement of service standards

is a key consideration of management in strategic and business

planning.


(D) IT solutions: (rank 1 to 5)

Reliable and integral

information is timely

available by suitable

IT solutions.

Information is integrated from various sources with data integrity

assured. Activity, product, service, and results cost information is

readily accessible to all managers in a format that can be customised

for process improvement; cost recovery, business planning, and

performance measurement.

We can integrate this proposal with other recent call from Syrian government to improve the

performance of the public organisations and their employees.

Recently, there was a special decree, No. 322, issued by President Bashar al-Assad on evaluating

all workers’ work performance in public sector to define the ‘labour forces’ structure and to review

policy of employment13 which is a great development towards accomplishing improved Syrian

corporate performance.

This project will motivate executives to work hard to reach higher level of performance through

their system reengineering and modernisation. Eventually they will become more competitive and

advance in their quality of products and services.

4.3 Future Directions

This paper should open the door for more efforts that will support and enhance the successful

implementation of the performance management systems in Syria.

However, the following concepts can be studied and discussed in further papers and researches by

my colleagues:

• Knowledge management


• Design for six sigma

• Decision Support System DSS

• Managing Change and transformation

Moreover, other tools and methodologies that may be invented in the future, which can include

artificial intelligence to minimise whatever manual work remains.

5 Conclusion

CPM is powerful management system that allows executives to assess and communicate strategy;

provide operational management with tools for developing effective plans, give people instructions,

and knowledge on how to perform their roles in implementing strategy. However, CPM system

may improve efficiency, yet it cannot ensure effectiveness of the executive as they are asked to

highly perform in order to deploy such system.

Combining targeted performance indicators of a Balanced Scorecard with the statistical rigor of

Six Sigma was effectively used to give focus for Syrian organisation on the achievement of their

strategic goals through successful Corporate Performance Management system which keeps them

going forward instead of backward.

13 Source: Syrian Arab News Agency (SANA), 28 July 2005.


APPENDIX A: BACKGROUND OF SIX SIGMA

The father of Six Sigma was the late Bill Smith, a senior engineer and scientist in Motorola. Not

long afterwards, in the mid-1990s, Jack Welsh, the CEO of General Electric (GE), initiated the

implementation of Six Sigma in the company so that the quality improvement efforts were aligned

to the needs of the business. This approach to implementing Six Sigma involves the use of

statistical and no statistical tools within a structured environment for the purpose of creating

knowledge that leads to higher-quality products in less time than the competition14.

The Six Sigma DMAIC, (Define, Measure, Analyses, Improve, Control), methodology is a

roadmap for problem solving and product or process improvement. Presented here is a tale that

summarises the steps within each phase of DMAIC, as well as possible tools to use in the course of

Six Sigma improvement process to achieve the DMAIC goals and outputs.

While the DMAIC roadmap presented may appear linear and explicitly defined, it should be noted

that an iterative approach is often necessary. For instance, you may find that once you have

collected data in the Measure phase, you can return to the project charter, (Define phase) to refine

the problem statement. As another example, after analysing the data, (Analyse phase), you may

find that you did not gather enough information to isolate the root cause of the problem. At this

point, you may iterate back to the Measure phase for further data collection.

Although the following table shows a broad selection of tools, it is not exhaustive of all the options.

Further, a tool listed here in association with one phase of DMAIC may find a suitable application

in another. It’s important to use tools that are appropriate to a particular process and yield

meaningful results, rather than to go through the motion of using all the tools simply for the sake of

“checking the box.”


D Define Phase: Define the process, its goals and customer (internal and external) requirements

DMAIC PHASE STEPS Define customers and customer requirements

Develop problem statement, goals and business case

Identify process owner and process team

Define resources

Evaluate key organisational support or opposition

Develop project plan and milestones

Develop high level process map

TOOLS USED Project charter

Process flowchart

SIPOC diagram

Stakeholder analysis

DMAIC work breakdown structure

CTQ (critical to quality) definitions

Voice of the customer (VOC) gathering

Define

Review

M Measure Phase: Measure the process to determine current performance; quantify the problem

DMAIC PHASE STEPS Define defect, opportunity, unit and metrics

Create detailed process map

Develop data collection plan

Validate the measurement system

Collect the data

Determine process capability and sigma baseline

TOOLS USED Process flowchart

Data collection plan/example

Benchmarking

Measurement system analysis

Voice of the customer (VOC) gathering

Process sigma calculation

Measure

Review

A Analyse Phase: Analyse and determine the root cause(s) of the defects

DMAIC PHASE STEPS Define performance objectives

Identify value/non-value added process steps

Identify sources of variation

Determine root cause(s)

Determine vital few causes of defects

TOOLS USED Histogram

Pareto chart

Time series/Run chart

Scatter plot

Regression analysis

Cause and effect/Fishbone diagram

Process map review and analysis

Statistical analysis

Hypothesis testing

Non-normal data analysis

Analyse

Review

14


I Improve Phase: Improve the process by eliminating defects and variation

DMAIC PHASE STEPS Perform design of experiments

Develop potential solutions

Define operating tolerances of potential system

Assess failure modes of potential solutions

Validate potential improvement by pilot studies

Correct/Re-evaluate potential solution

TOOLS USED Brainstorming

Mistake proofing

Design of experiments (DOE)

Quality function deployment (QFD)

Failure modes and effects analysis (FMEA)

Improve

Review

C Control Phase: Control future process performance

DMAIC PHASE STEPS Define and validate monitoring and control system

Develop standards and procedures

Implement statistical process control

Determine process capability

Develop transfer plan; finalise documentation

Verify benefits, cost savings/ avoidance, profit growth

Communicate to business

TOOLS USED Process sigma calculation

Control charts (variable and attribute)

Cost savings calculations

Control plan

Control

Review

The following chart illustrates the Six Sigma implementation roadmap:



APPENDIX B: WHERE THE PERFORMANCE GOES

This chart shows the average performance loss implied by the important ratings that managers gave

to specific breakdowns in the planning and execution process:15

15 Source: Harvard Business Review magazine, USA, July / August 2005.


APPENDIX C: SAMPLE OF KEY PERFORMANCE INDICATORS


ABBREVIATIONS

AI Artificial intelligence

CPM Corporate performance management

CRM Customer relationship management

CTQ Critical to quality

DMAIC Define-measure-analyse-improve-control

DOE Design of experiments

DSS Decision support system

ERP Enterprise resource planning

FMEA Failure mode and effects analysis

FMEA Failure modes and effects analysis

IT Information technology

KPIs Key performance indicators

OLAP On-line analytical processing

ROI Return on investment

SIPOC Supplier, input, process, output and customer

SLEPT Sociological, legal, economic, political, and technological

SPC Statistical process control

TQM Total quality management

VOC Voice of customer

σ Sigma, population standard deviation


GLOSSARY

Balanced Scorecard: Is often organised around the four distinct performance perspectives of financial, customer, internal business process and learning and growth (Kaplan and Norton 1996).

Benchmarking: To provide a standard against which something can be assessed.

Brainstorming: Consensus-building among experts about a problem or issue using group discussion.

Corporate Performance Management:

It is an umbrella term to describe the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise.

Dashboards: They translate data into a rich, graphical presentation using gauges, maps, charts, and other graphics to show multiple results together. Dynamic dashboards.

Decision Support System:

An information and planning system that provides the ability to interrogate computers on an ad hoc basis, analyse information and predict the impact of decisions before they are made.

Design of Experiments (DOE)

It is a powerful statistical technique introduce by Ronald A. Fisher in England in the 1920s to study the effect of multiple variables simultaneously.

DMAIC: The Six Sigma problem-solving framework for improving business processes. It is an acronym for Define opportunity, Measure performance, Analyse opportunity, Improve performance, and Control performance.


Failure mode and effects analysis (FMEA):

Analytical approach directed toward problem prevention through the prioritisation of potential problems and their resolution.

Key Performance Indicators:

A set of quantifiable measures that a company or industry uses to measure or compare performance. These indicators help companies measure their ability to meet their strategic and operational goals. The key performance indicators vary from one company to another depending on their priorities.

Knowledge-centred activity (KCA):

A term used that means striving to obtain knowledge wisely and utilise it wisely.

Metrics: A system of parameters or ways of quantitative assessment of a process that is to be measured, along with the processes to carry out such measurement. Metrics define what is to be measured.

On-Line Analytical Processing:

Decision support software that allows the user to quickly analyse information that has been summarised into multidimensional views and hierarchies. OLAP tools enable users to drill down into masses of data and statistics in order to get vital information.

Sigma: The Greek letter (σ) that is often used to describe the standard deviation of population (Statistics).

SIPOC: The SIPOC method is an excellent tool to expand the understanding of the information and its courses in process flow.

Six Sigma: A term coined by Motorola that emphasise process improvement methodology that provides a systematic approach to the elimination of defects that affect something important to the customer.


Stakeholders: Customers, suppliers, employees, producers, shareholders, lenders and community.

TRIZ: TRIZ (theoria risheneyva isobretateslshehuh zadach) is a Russian acronym for theory of inventive problem solving. It is a tool that provides a dramatic breakthrough in almost all areas and accelerates the project team’s ability to solve problems.

Voice of Customer: Those aspects of service that are of importance to the customer are termed ‘Voice of Customer (VOC).

X's: Often referred to as Big X's, these are the factors or variables that will have the greatest impact on the Big Y's.

Y's: Often referred to a "Big Y's", these are the business results that matter. Big Y's represent measures directly linked to critical customer requirements.


REFERENCES

A) Books:

Breyfogle III, F.: IMPLEMENTING SIX SIGMA Smarter Solutions Using Statistical Methods, United State of America, 2005, 52 ff. Cf. Collins, J.: Good to Great, Random House, London, 2001, p. 9. Gupta, P.: THE SIX SIGMA PERFORMANCE HANDBOOK, A Statistical Guide to Optimising Results, New York/Main et al., 2005, p.9, pp. 161-165, 340 ff, 374f. Jobber, D.: Principles and Practice of Marketing, 4th edition, McGraw Hill International (UK) Ltd, London/Main et al., 2004, p. 50, p. 66. Kaplan, R. / Norton D.: TRANSLATING STRATEGY INTO ACTION Balanced Scorecard, Harvard Business School Press, United State of America, 1996, pp. 10-127, pp. 305-307. Karajewski, L. / Ritzman, L.: OPERATIONS MANAGEMENT Strategy and Analysis, Sixth Edition, Prentice-Hall International Inc., New Jersey, 2002, p. 67, p. 242, Ohmae, K.: THE MIND OF THE STRATEGIST The Art of Japanese Business, McGraw-Hill Inc., New York/Main et al., 1982, 42 f. Cf. Slater, R.: Jack Welch on LEADERSHIP, New York, 2004. Stewart, G.: Successful Sales Management, Great Britain, Prentice Hall, 2000, p.54 Vause, B.: Guide to Analysing Companies, Third Edition, Profile Books Ltd, London, 2002, pp. 147-193. B) Articles in Magazines:

Kaplan, R. / Norton, D.: THE BALANCE SCORECARD Measure That Drive Performance, in: Harvard Business Review, July-August/2005, pp. 172-180. Mankins, M. / Steel, R.: TURNING GREAT STRATEGY INTO GREAT PERFORMANCE, in: Harvard Business Review, July-August/2005, pp. 65-72.


Schmidt, E.: A new Standard, in: iSixSigma Magazine, Volume 1, Number 2, May/June 2005, pp. 20-24. Waxer, C.: SIX SIGMA BASIC Six Sigma Organisational Structure, in: iSixSigma Magazine, Volume 1, Number 2, March/April 2005, pp. 14-15. C) Websites:

www.ameinfo.com/48604.html, 12/9/2005 www.answers.com, 20/08/2005 www.bscol.com, 07/09/2005 www.businessintelligence.com/ex/asp/code.133/xe/article.htm, 15/08/2005 www.citect.com, 07/08/2005 www.cognos.com/products/scorecarding/scorecards/cmm.html, 15/08/2005 www.distributive.com/balancedscorecard_software_factsheet.html, 15/08/2005 www.hbr.org, 10/09/2005 www.isixsigma.com, 30/08/2005 www.isixsigma.com/library/content/c031028a.asp#about#about, 20/08/2005 www.isssp.com, 14/09/2005 www.kellen.net/bpm.htm, 16/09/2005 www.motorola.com/content/0,,3074-5804,00.html, 17/09/2005 www.performancesoft.com, 01/08/2005 www.riskinstitute.ch/145360.htm, 15/08/2005 www.sap.com, 12/09/2005 www.sas.com, 12/09/2005 www.sun.com, 10/08/2005

Corporate Performance Management

Business

performance methodologies

emba project paper

cpm roadmap

syrian cpm

cpm pitfalls

husam khanji appendix

high performance results

husam khanji preface