Strategic performance measurement within an operations strategy context: a survey of Kenyan practices

Abstract

Every firm has a mission, vision of where it wants to be in the long run. Successful accomplishment of which calls for development of strategies to enable the firms focus their efforts in one direction - the mission. Information or competitive intelligence has emerged as a competitive weapon in the current marketplace. Information is essential in the setting agreed upon performance goals, allocating and prioritising resources and as indicators of areas that need management's corrective action. Having reliable information enables managers to effect positive change in organizational culture, systems, and processes. Performance measurement Systems when correctly developed provide such information. This research project sought to survey how leading Kenyan firms link their operations strategy to (strategic) performance measurement. Of concern also was whether or not strategic consensus exists between Chief Executive officers (CEOs) and Operations/manufacturing managers (OW:MM) in terms of what each considers being important performance objectives and measurement of the same. The survey was carried among participants of the Company Of the year Awards (myA) as representatives of best practitioners among Kenya's manufacturing and service companies. As a semi structured questionnaire was used as an interview guide to collect data. It was administered to both the CEO and OM top enable analysis of consensus The findings point to the fact that successful firms have fully recognised the importance of the operations function in both generating and supporting overall business performance excellence. They recognise the need to pursue all the operations strategy priorities (quality, cost, flexibility, time/ delivery speed and innovation) simultaneously as opposed to trading off one for the other. The differences in rankings are attributable to what constitutes order winners and order qualifiers in the industries and markets that the firms operate in. These firms have integrated the emerging nonfinancial performance measures into their performance measurement systems, however there is still strong emphasis on financial indicators and reports. They recognise the need for PMSs to answer such questions as, who are the key stakeholders and what do they want or need? What strategies do we have to put in place to satisfy the wants and needs of these key stakeholders? What critical processes do we require if we are to execute the strategies, what capabilities do we need to operate and enhance these processes and what contributions 00 we require from the stakeholders so as to maintain and develop these capabilities?