Beyond Numbers!
Many of you may think that being finance professional, it would be a peccadillo (colloquially known as "sin") for me to scribe something like this but the reality lies in accepting and agreeing to the fact that there is so much more for finance professionals than just mere numbers (number crunching!) to an organization. Many a times KPI (Key Performance Indicators) usually represent financial measures ignoring the "important" non-financial crunch – which I feel is an equally essential sauce (remember…..its all in the sauce!). I strongly believe that organizations (both profit & not-for-profit sector) should adopt a more holistic approach to performance measurement & management wherein KPIs include non-financial performance measures like customer dissatisfaction, ethical trading, supplier relationships, people / employee satisfaction index, workforce diversity, environmental parameters, community contributions, major incident rate, total waste & recycling rates etc…
Today, I feel there is a shift (not too sure whether it’s a quantum shift!) from treating financial measures as the foundation for performance measures, to being only one of several measures used by corporates to evaluate their performance. There is also a possibility that staff (many-a-times) play sport (does it reflect their sportiveness or lack of it??) to maximize financial measures rendering the whole performance evaluation exercise futile. Companies worldwide are transforming themselves for a world where competition is based more on information, and on ability to exploit intangible assets, than on their ability to invest in, and manage, tangible assets. Concept of Balanced Scorecard (Robert Kaplan & David Norton) was introduced to complement financial measures with those related to: customers; internal business processes; and learning. Many corporates have used this as cornerstone of a new strategic performance management system. Well, the key point is to discover how human, organizational and intellectual assets combine in creating VALUE.
Today, I feel there is a shift (not too sure whether it’s a quantum shift!) from treating financial measures as the foundation for performance measures, to being only one of several measures used by corporates to evaluate their performance. There is also a possibility that staff (many-a-times) play sport (does it reflect their sportiveness or lack of it??) to maximize financial measures rendering the whole performance evaluation exercise futile. Companies worldwide are transforming themselves for a world where competition is based more on information, and on ability to exploit intangible assets, than on their ability to invest in, and manage, tangible assets. Concept of Balanced Scorecard (Robert Kaplan & David Norton) was introduced to complement financial measures with those related to: customers; internal business processes; and learning. Many corporates have used this as cornerstone of a new strategic performance management system. Well, the key point is to discover how human, organizational and intellectual assets combine in creating VALUE.
posted by Sriram at 2:56 PM
2 Comments:
Great stuff Sriram
I have always said that ‘finance folks’ have much more to offer than simply counting beans and frankly being seen by everyone else as an obstruction. More power to your argument. I hope your finance colleagues listen to you
At some time in the future when you are a Chief Finance Officer please make sure you teach all the up and coming accountants that they need to see the whole picture and contribute to it rather than ‘lock themselves away’ in the finance function counting beans and producing complex spread sheets.
Keep saying what you are saying now Sriram - yours is a fantastic but growing minority opinion in the world of finance but it is wonderfully refreshing to hear you say this.
8:55 PM
Trevor,
Yes, I have always whistle-blown my philosophy that accountants should crack their shell & see wats happening outside. They shouldn't remain a frog in the well. I am trying my best to champion this initiative and put it at center stage where the message is spread slowly and has a little trickle down effect! Well, am doing my best. With all your support & good wishes, I truly hope that this message will one day be understood in its right perspective and with utmost sportiveness.
9:52 AM
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