Performance Measurement

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Conclusion

After some discussion, the task force members agree to set minimum, moderate, and stretch targets for the metrics they've created. The team submits its ideas to the steering committee, which approves them with just a few changes. In particular, the committee suggests revising several targets to improve overall organizational performance. For instance, committee members point out that the revenues from new product introductions must constitute 20% of total revenues—not the 5% target set by the task force—to generate the significant increase in overall market share the company is aiming for.

The steering committee then combines Allen's task force's proposals with those of other units' task forces to develop a companywide performance measurement system. The system is implemented and revised over the coming year. The following year, Hainsworth & Smith begins to see measurable results in the form of increased share price, a modest boost in market share, new process efficiencies, and improvements in employees' knowledge sharing. Revising the company's approach to performance measurement has required much time and patience—but the effort has begun to pay dividends.