Assessing Organizational Performance
Earlier, we discussed the importance of the control function and monitoring the firm's progress in meeting the goals and objectives contained in that plan. This section reviews the ways that a company assesses performance. Be sure to pay attention to the use of the Balanced Scorecard, which includes not only financial performance goals but operational goals as well.
Internal Business Process Measures
Internal business process measures of performance relate to organizational efficiency. These measures help answer the key question "What must we excel at?" Examples include the time it takes to manufacture the organization's goods or deliver a service. The time it takes to create a new product and bring it to market is another example of this type of measure.
Organizations such as Starbucks realize the importance of such efficiency measures for the long-term success of its organization, and Starbucks carefully examines its processes with the goal of decreasing order fulfillment time. In one recent example, Starbucks efficiency experts challenged their employees to assemble a Mr. Potato Head to understand how work could be done more quickly. The aim of this exercise was to help Starbucks employees in general match the speed of the firm's high performers, who boast an average time per order of twenty-five seconds.