Steve Downton, Downton Service Management Consultants Ltd, Noventum Group
Business managers often seem not to realise that what is measured determines the attitude and outlook of a business and that the fundamental purpose behind measuring performance is to influence behaviour, not generate paperwork. The focus should not be the production of reports because the resulting management actions even if carried out immediately will be a reaction to recover a situation, as most measurements provide a snapshot of what has passed.
There is now a positive trend amongst leading edge businesses to adopt measurement as a fundamental part of their strategy to effect change throughout the organisation. Understanding the impact of measurements on the fundamentals of a business has become increasingly important as more and more operations move away from a cost centre mentality, which tended to dictate the measures used, towards a profit centre attitude which allows for a greater flexibility and applicability of measures used. To achieve such a transformation, the first consideration is to recognise that when many service operations move away from a cost centre towards a profit centre, they are moving from the potentially limiting concept of cost control to a much more enlightened one of profit management. This difference has a profound effect on the way a business approaches investment and has become one of the cornerstones of a successful investment strategy.
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