What is Performance Prism
The Performance Prism is a thinking tool which seeks to take account of five different perspectives that are related and help to build, design, operate and review an organization’s performance measurement systems in relevance to their functioning conditions and environment. These perspectives are:
Satisfaction of the Stakeholder:
Key stakeholders are the primary concern for an organization for it must deliver ‘Value’ to them because this is what they exist for. Stakeholders include, customers, investors, suppliers employees, pressure groups, regulators et cetera.
‘Value’ has to be defined differently for various stakeholder groups e.g typically customers will want reliable and quick delivery of high quality products while shareholders are bound to be more concerned with better returns on their invested capital.
Contribution from the Stakeholder
It should also be kept in mind that for every stakeholder there is a set of priorities as to what the organization and the stakeholders want and need from each other. There will exist a subtle and dynamic tension between these two. Stakeholders and their organizations have to believe that their relationships are actually reciprocal in nature.
Strategies
After a decision is made as to what the needs and wants of the stakeholders are, executives then have to decide the extent to which they will undertake prioritization of their satisfaction in the organizational strategies developed to deliver ‘value’ to the stakeholder (whilst ensuring the fulfillment of its own requirements also).
Processes
The developed strategy should be supported by processes that are designed to help in its successful achievement. Processes form the core which determines the success of the organization. They are essentially functional simultaneously in many areas and really are the guides for work-what is to be done, where it is to be done and how will its execution be.
Capabilities
An organization’s capabilities are defined as the combination of its infrastructure, technology and practices that together represent that organization’s ability to create value through its process operations for its stakeholders.
Written by: Matt
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Tagged as capabilities, different perspectives, dynamic tension, execution, extent, fulfillment, high quality products, investors, organizational strategies, performance measurement systems, pressure groups, priorities, prism, regulators, relationships, relevance, satisfaction, shareholders, stakeholder groups, stakeholders + Categorized as Business, Economy articles, Ladership & Management