Paladino, B. 2007. 5 key principles of corporate performance management: How do Balanced Scorecard Hall of Fame, Malcolm Baldrige, Sterling, Fortune 100, APQC, and Forbes award winners drive value? Strategic Finance (June): 39-45.
Note by James R. Martin
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This is the first part of a three part article series adapted from Paladino's book Five Key Principles of Corporate Performance Management.1 The purpose of this article is to introduce the five key principles related to executing strategy and to provide three examples related to how award winning companies have used the first principle. The five principles are based on studies of award-winning enterprises, and extends the work on business genetics presented in a book by Charles Fine.2 In his book, Clockspeed Fine discussed four barriers to the successful implementation of a company's strategy. According to Paladino, the five principles outlined in this series of articles provide guidance that will enable an organization to rapidly and successfully implement their strategy through an integrated set of CPM stages. The principles include:
1. Establish and deploy a corporate performance management office and officer.
2. Refresh and communicate strategy.
3. Cascade and manage strategy.
4. Improve performance.
5. Manage and leverage knowledge.
The five principles and some related concepts are presented in the graphic below adapted from Paladino's illustration on page 41.
The main thrust of this article is to provide three examples related to how award winning companies have used the first principle. The companies include Bronson Methodist Hospital, Serono (a biotechnology company), and Universal Weather and Aviation. In the second article of the series Paladino provides examples of how companies use principles 2 and 3. The final article extends the examples to best practices in the area of principles 4 and 5.
1 Paladino, B. 2007. Five Key Principles of Corporate Performance Management. John Wiley and Sons. The other two articles in this series are: Paladino, B. 2007. 5 key principles of corporate performance management: Successful companies plan, communicate, and manage strategy well. Strategic Finance (July): 33-41; and Paladino, B. 2007. 5 key principles of corporate performance management: Award-winning companies use them to improve their performance and manage and leverage knowledge for success. Strategic Finance (August): 39-45.
2 Fine, C. H. 1999. Clockspeed: Winning Industry Control in the Age of Temporary Advantage. Basic Books. A more recent version is Fine, C. H. 2012. Clockspeed: Winning Industry Control in the Age of Temporary Advantage. ReadHowYouWant.
Other publications by Paladino:
Paladino, R. E. 2005. Balanced forecasts drive value. Strategic Finance (January): 37-42.
Paladino, B. 2008. Strategically managing risk in today's perilous markets. Strategic Finance (November): 26-33.
Paladino, B. 2010. Innovative Corporate Performance Management: Five Key Principles to Accelerate Results. John Wiley and Sons.
Paladino, B. 2011. Achieving innovative corporate performance management. Strategic Finance (March): 43-51.
Paladino, B. 2011. Achieving innovative corporate performance management. Strategic Finance (April): 43-53.