Business Book Review – “Handbook of Corporate Performance Management” – by Mike and Pippa Bourne

Measuring corporate performance has become a hot topics for the boardrooms lately. There is a strange opinion stream that underlines that the correct management tools can actually add value – as opposed to the strategy purists which think that only the 5 P’s of marketing can add value to a company. I myself am often confused, even in practice, since the proofs for each side of the argument are plenty. After all, what is the purpose of a complex management structure beyond controlling and optimizing the business? Is it also to create value by designing, implementing and monitoring a chosen strategy?
“Handbook of Corporate Performance Management” takes this side exactly. A company can add value for the shareholders by shrewdly choosing one type of strategy and implementing it in a proper manner. In this direction, “Handbook of Corporate Performance Management” takes the logical process approach, or that of the scientific management. (This is actually expected from such an academic book on the company performance, right?).
Don’t be misled by the appellative handbook – this is not the usual 1,000 pages tome that we are used with from Finance. You will not fall asleep only reading the summary, on the contrary. “Handbook of Corporate Performance Management” is concise and written on a succinct manner, without making quality compromises. I would have not called it a handbook, but rather a quick reference manual, but well this was not my choice. “Handbook of Corporate Performance Management” goes beyond a list of do’s and don’ts, so I guess that the name reflects an internal struggle too from the editors to correctly position it on the market.
My favorite chapter was “Creating a culture of high performance”, since I am a strong believer in the power of the empowerment. It was capturing many interesting facts, which often are on the companies’ policies but not followed (so well worth reminding) – be it that you need a strong recruitment policy or that you need to create a culture fit with your objectives. I think that many entrepreneurs would have an easier time growing their businesses if they would spend some time in advance thinking about this topic (rather than offering all the employees share packages, especially in the IT sector where corporate culture seems to matter more and more).
All in all, an interesting side-lecture if you want to take a break from the heavy-figures finance books. Again, a nice job from Wiley Professional which has published this book.
Summary:
Preface xi
Acknowledgements xiii
Introduction xv
1. Performance and the Role of Measurement 1
1.1 Introduction 1
1.2 What is good performance? 1
1.3 Whose perspective? 1
1.4 Making comparisons 2
1.5 Present success and future sustainability 3
1.6 How is performance delivered? 3
1.7 The roles of a performance measurement system 5
1.8 The focus of measurement 7
1.9 The role of management and leadership 9
1.10 In summary 10
Further reading 10
2. Practical Tools for Measuring Performance 13
2.1 Introduction 13
2.2 Elements of a performance measurement system 13
2.3 The Balanced Scorecard 15
2.4 The Performance Prism 19
2.5 Objectives and success maps 20
2.6 Designing measures 24
2.7 Summary 30
Further reading 31
3. Designing the System 33
3.1 Introduction 33
3.2 A four phase life cycle 33
3.3 Design 34
3.4 How is this done in practice? 34
3.5 The debate 35
3.6 Developing the success map 37
3.7 Developing the measures 39
3.8 The next stage 40
Further reading 40
4. Managing Implementation 41
4.1 Introduction 41
4.2 Phases of implementation 41
4.3 Why does implementation succeed or fail? 41
4.4 Hurdles and blockers 45
4.5 Steps to successful implementation 46
4.6 Conclusion 48
Further reading 48
5. Assessing and Managing Change 51
5.1 Introduction 51
5.2 Change in context 51
5.3 Assessing resistance to change 53
5.4 Return on management 54
5.5 Assessing likelihood of implementation 55
5.6 Conclusion 58
Further reading 58
6. Target Setting 59
6.1 Introduction 59
6.2 Why do you set targets? 59
6.3 Ten common problems 60
6.4 The target setting wheel 62
6.5 Closing remark 65
Further reading 65
7. Linking Rewards to Performance 67
7.1 Introduction 67
7.2 Pitfalls 67
7.3 Linking rewards to performance 71
7.4 Examples 75
7.5 Summary 78
Further reading 78
8. Managing with Measures – Statistical Process Control 81
8.1 Introduction 81
8.2 Variation and our reaction 81
8.3 Statistical process control 83
8.4 Performance and performance improvement 91
Further reading 92
9. Using Measures – Performance Reviews 93
9.1 Introduction 93
9.2 The Performance planning value chain 93
9.3 Performance reviews 99
Further reading 104
10. Using Measures to Manage – Challenging Strategy 105
10.1 Introduction 105
10.2 Company examples 105
10.3 Testing success maps in practice 109
10.4 Testing in theory and practice 113
10.5 Behavioural issues 117
10.6 Conclusion 118
Further reading 118
11. Keeping Your Measurement Process up to Date 119
11.1 Introduction 119
11.2 Keeping the process up to date 119
11.3 When do you update targets? 119
11.4 Revising measures 122
11.5 Reviewing the measures in line with your success map 123
11.6 Reflecting on your strategy 124
11.7 Challenging strategy 125
11.8 Overcoming barriers to updating your system 126
11.9 Summary 133
Further reading 133
12. Measuring Performance of People 135
12.1 Introduction 135
12.2 Essential elements for high performance 135
12.3 Measuring employee satisfaction and engagement 136
12.4 Performance appraisals 141
12.5 HR performance measures 145
12.6 Acting on results 147
Further reading and sources of information 147
13. Measuring Customers 149
13.1 Introduction 149
13.2 What are you measuring? 149
13.3 Using customer feedback 157
13.4 Summary 160
Further reading 161
14. Measuring Process Performance 163
14.1 Introduction 163
14.2 A process framework 163
14.3 Process measurement 164
14.4 Key process measures 165
14.5 Summary 169
Further reading 169
15. Measuring Competence and Resource Development 171
15.1 Introduction 171
15.2 Defi ning terms 171
15.3 Why measure resource and competence development? 172
15.4 A framework for displaying the relationship between resources and competences 176
15.5 Conclusion 183
Further reading 184
16. Measuring Financial Performance 185
16.1 Introduction 185
16.2 A shareholder perspective 186
16.3 Key shareholder ratios 189
16.4 Accounting ratios 191
16.5 Management ratios 194
16.6 Conclusion 196
Further reading 196
17. Measuring Sustainability 197
17.1 Introduction 197
17.2 What are ‘sustainability’ and ‘corporate responsibility’? 197
17.3 What are the benefits? 199
17.4 Building sustainability into your business 201
17.5 Conclusion 206
Further reading and sources of information 206
18. Creating a Culture of High Performance 209
18.1 Introduction 209
18.2 Creating the right environment 209
18.3 Creating the right culture 210
18.4 Recruiting the right people 212
18.5 What motivates? 214
18.6 Dealing with underperformers 215
18.7 Understanding your influence 216
18.8 Direction setting and engagement 217
18.9 Communication 218
18.10 Conclusion 219
Further reading 219
19. Leadership Vignettes 221
19.1 Introduction 221
19.2 Paul Woodward – Chief Executive, Sue Ryder Care 221
19.3 PY Gerbeau – Chief Executive, X-Leisure 223
19.4 Richard Boot OBE – IRC Global Executive Search Partners 225
19.5 David Child 227
19.6 Baroness Sally Greengross 229
19.7 Charles Carter 231
19.8 Nigel Bond – CEO, Domino Printing Sciences 232
19.9 Mark Lever – CEO, National Autistic Society 236
19.10 Mike Ophield 239
19.11 Andy Wood – Chief Executive, Adnams plc 242
20. Bringing It All Together 245
20.1 Introduction 245
20.2 Performance measurement 245
20.3 Performance management 246
20.4 Performance leadership 248
Further reading 251

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