Prepared by Management Department | | C ONTROL : T ECHNIQUES FOR E NHANCING O RGANIZATIONAL E FFECTIVENESS Week 15

Managing for productivity and results

Productivity  Productivity = output input  Productivity = goods + services labor + capital + material + energy “For a company and for a nation, productivity is a matter for survival” Jack Welch – former General Electric CEO “Productivity is produced by product market competition” William Lewis – founding director of the McKinsey Global Institute

Controlling for Productivity

Types of Control

6 reasons why control is needed CONTROL Helps an organization... CONTROL Helps an organization adapt to change & uncertainty discover irregularities & errors reduce costs, increase productivity, or add value detect opportunities deal with complexity decentralize decision making & facilitate teamworks

Steps in the control process

Measurement Management Techniques 1.Balanced Scorecard (BSC) 2.Strategy Map : visual representation of BSC 3.Others

Balanced Scorecard hall of fame for executing strategy achieving breakthrough results

The balanced scorecard

The Strategy Map

Measurement Management The dashboard puts me and more and more of our executives in a real-time touch with the business. The more eyes that see the results we obtaining every day, the higher the quality of the decisions we can make Ivan Seidenberg – CEO Verizon Communication You simply can’t manage anything you can’t measure Richard Quinn – VP of quality at Sears Merchandising Group Forget magic, industry leaders we surveyed simply have a greater handle on the world around them Survey of 203 executives in companies

Why measurement-managed firms succed 1. Top executives agree on strategy 2. Communication is clear 3. There is better focus on alignments 4. The organizational culture emphasizes teamwork and allow risk taking

Barrier to effective measurement 1. Objectives are fuzzy 2. Managers put too much trust in informal feedback systems 3. Employee resist new measurement system 4. Company focus too much on measuring activities instead of result

Types of workplace monitoring Source: American Management Association / ePolicy Institute Research, “2005 Electronic Monitoring & Surveillance Survey,” American Management Association.