They truly drive the business process and replace traditional accounting and variance reporting structures. As managers and academics have tried to remedy the inadequacies of current performance measurement systems, some have focused on making financial measures more relevant. But we should not have to choose between financial and operational measures. No single measure can provide a clear performance target or focus attention on the critical areas of the business. In short, we need a balanced presentation of both financial and operational measures.
Financial measures provide the results of actions already taken.
Operational measures complement the financial measures and drive future financial performance. The balanced approach also guards against sub-optimisation. By forcing us to consider all of the important operational measures together, we can see whether improvement in one area may have been achieved at the expense of another. Balanced and explicit measures are fundamental to the improvement of business performance and they drive process redesign. Many organisations today have a corporate mission which focuses on the customer.