"Beyond the Balanced Scorecard: Refining the Search for Organizational Success Measures"

Alan Maltz, Aaron Shenhar, and Richard Reilly

Long Range Planning

2003, 36, pp. 187-204

After a review of the limitations of two major approaches to measuring organizational success (Kaplan and Norton's Balanced Scorecard and Shenhar and Dvir's Success Dimensions), the authors of this article propose a new performance model called the Dynamic Multi-dimensional Performance (DMP) framework. This model synthesizes previous empirical work on performance into five distinct success dimensions. Research has identified twelve potential measures across these dimensions. The five major dimensions are:

1. Financial Measures: These "represent the traditional approach to organizational success. In essence, it would involve measures such as sales, profits, or return on investment." The three primary measures identified in this article are: sales, profit margin, and revenue growth.
2. Customer/Market Measures: These "represent the relationship between an organization and its customers. Customer-centric companies are adept at understanding customer needs and wants, building products that meets these needs, and keeping them satisfied, resulting in high retention rates." The three primary measures identified in the article are: customer satisfaction index, customer retention rate, and service quality.
3. Process Measures: These "reflect the organizational efficiency and improvement view. Many of the influential business themes in the past decade have focused on process improvement—TQM, learning organizations, and team-based efforts." The two primary measures identified in the article are: time to market with new products/services and quality of New Product Development and Preventive Maintenance processes.
4. People Development Measures: These "recognize the critical role of stakeholders in organizational success. The level of employee skills, commitment to technological leadership, personnel development, staff slack resources are indicative of the essential role of employees in organizational success." The two primary measures identified in the article are: retention of top employees and quality of leadership development.
5. Preparing for the Future Measures: These "are clearly measures of foresight. This dimension must be viewed as a critical organizational issue and includes measures such as depth/quality of strategic planning, indicators of partnerships and alliances, anticipating and preparing for changes in the environment, and investments in new markets and technologies." The two primary measures identified in the article are: depth & quality of strategic planning and anticipating/preparing for unexpected changes in external environment.

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