ADIDAS ZX FLUX MEN'S MESA WHEAT TORSION 11.5M RUNNING ATHLETIC SHOES SIZE 11.5M TORSION f1079d

ADIDAS ZX FLUX MEN'S MESA WHEAT TORSION 11.5M RUNNING ATHLETIC SHOES SIZE 11.5M TORSION f1079d

Knowledge@Wharton

ADIDAS ZX FLUX MEN'S MESA WHEAT TORSION 11.5M RUNNING ATHLETIC SHOES SIZE 11.5M TORSION f1079d

Dec 06, 2000

Adidas Originals Superstar Trainers in Vapour GreenAdidas Country - UK10 - Deadstock,ADIDAS HOMBRE Negro/Eléctrico/Nesime Zapatillas de Running con Cordones EstiloAdidas Speed Trainer 3.0 Training Shoe-Men's Size 10.5 Black DAMAGED,Mens adidas Originals Superstar Trainers Suede Casual Shoes Dark Grey RRP .95,New Adidas Adizero LJ Long Jump Track Field Spikes Shoes Sz 12.5 | BB4100| White,Adidas ACE 15.3 FG/AG Soccer Shoes Black Yellow orange B32846 S83243 10.5 11.5,ADIDAS Mens Originals Tubular Instinct S80085 Black Hightop Sneakers (MSRP $120),Adidas Techfit Hi-Top Black & White Zebra Cleats - Size 6,Adidas Mad Handle Men's Blue Black & White High Top Basketball Shoes (11),Size Adidas Originals Adilette Slide Men’s Sandals White Slippers Shoes,ADIDAS DURAMO SLIDE [Taille 51 53] Tongues hommes g15886 neuf et scellé,ADIDAS HOOPS MID JUNIOR KID Blu-25,New Adidas Voloomix Slides Sandals Black Red Beach Flip Flops Men size 11,ADIDAS 4 ELEMENTS 078883 HIP-HOP COLLECTION LIMITED EDITION TAN SNEAKERS SIZE 10adidas Fluidcloud M Black White Men Running Training Shoes Sneakers BB3326,Adidas Superstars Shell toe Trainers White (9EC),Adidas Originals - ZX FLUX - SCARPA CASUAL - art. S79931,Adidas Mens Samo Granite/LghSolidGrey/Satellite Walking Shoes Size 9 (347355),ADIDAS ORIGINALS ZX FLUX XENO REFLECTIVE BLACK UK SIZE 11.5 LIMITED EDITION,Adidas Q32962 T-ZX Mens Black Purple White Athletic Running Shoes Sz 9.5 RareAdidas Tubular men’s trainers in grey suede 8UK,Adidas Skateboarding - Adi-Adi-Ease Premiere - Skateschuhe, Turnschuhe,Adidas superstar 80s Black Leather Trainers Eu 40,Adidas Iniki Runner Boost Men's Shoes BB2099 BB2089 BB2100 BB2094 BB2101 BY9727,Adidas Men's ACE 17.4 FxG Soccer White/Yellow S77090 Sz 8 - 11,adidas Originals Superstar Weave Sneaker Pink S75176 UK6.5 EU40Adidas Neo mens trainers size (white,gray,red),Adidas Originals Tubular Viral Trainers Blue,adidas Franchise CTS - Grey - Mens,

Item specifics

Condition: Pre-owned :
An item that has been used or worn previously. See the seller’s listing for full details and description of any imperfections.See all condition definitions- opens in a new window or tab
Seller Notes: GOOD NewCONDITION
Model:

ZX FLUX

Shoe Height: Low Top
Country/Region of Manufacture: Vietnam Upper Material: Mesh
Style: Running Shoes Color:

Brown

Product Line: ZX, adidas ZX Flux Euro Size: EUR 46
Width: Medium (D, M) Closure: Lace Up
US Shoe Size (Men's): 11.5 Brand:

adidas

mic Listen to the podcast:

In an article on Oct. 16, 2000, in the Financial Times’ Mastering Management series, Wharton accounting professors Christopher Ittner and David Larcker suggest that financial data have limitations as a measure of company performance. The two note that other measures, such as quality, may be better at forecasting, but can be difficult to implement. Below is the text of their article.

Choosing performance measures is a challenge. Performance measurement systems play a key role in developing strategy, evaluating the achievement of organizational objectives and compensating managers. Yet many managers feel traditional financially oriented systems no longer work adequately. A recent survey of U.S. financial services companies found most were not satisfied with their measurement systems. They believed there was too much emphasis on financial measures such as earnings and accounting returns and little emphasis on drivers of value such as customer and employee satisfaction, innovation and quality.

In response, companies are implementing new performance measurement systems. A third of financial services companies, for example, made a major change in their performance measurement system during the past two years and 39% plan a major change within two years.

Inadequacies in financial performance measures have led to innovations ranging from non-financial indicators of “intangible assets” and “intellectual capital” to “balanced scorecards” of integrated financial and non-financial measures. This article discusses the advantages and disadvantages of non-financial performance measures and offers suggestions for implementation.

Advantages

Non-financial measures offer four clear advantages over measurement systems based on financial data. First of these is a closer link to long-term organizational strategies. Financial evaluation systems generally focus on annual or short-term performance against accounting yardsticks. They do not deal with progress relative to customer requirements or competitors, nor other non-financial objectives that may be important in achieving profitability, competitive strength and longer-term strategic goals. For example, new product development or expanding organizational capabilities may be important strategic goals, but may hinder short-term accounting performance.

By supplementing accounting measures with non-financial data about strategic performance and implementation of strategic plans, companies can communicate objectives and provide incentives for managers to address long-term strategy.

Second, critics of traditional measures argue that drivers of success in many industries are “intangible assets” such as intellectual capital and customer loyalty, rather than the “hard assets” allowed on to balance sheets. Although it is difficult to quantify intangible assets in financial terms, non-financial data can provide indirect, quantitative indicators of a firm’s intangible assets.

One study examined the ability of non-financial indicators of “intangible assets” to explain differences in US companies’ stock market values. It found that measures related to innovation, management capability, employee relations, quality and brand value explained a significant proportion of a company’s value, even allowing for accounting assets and liabilities. By excluding these intangible assets, financially oriented measurement can encourage managers to make poor, even harmful, decisions.

Third, non-financial measures can be better indicators of future financial performance. Even when the ultimate goal is maximizing financial performance, current financial measures may not capture long-term benefits from decisions made now. Consider, for example, investments in research and development or customer satisfaction programs. Under U.S. accounting rules, research and development expenditures and marketing costs must be charged for in the period they are incurred, so reducing profits. But successful research improves future profits if it can be brought to market.

Similarly, investments in customer satisfaction can improve subsequent economic performance by increasing revenues and loyalty of existing customers, attracting new customers and reducing transaction costs. Non-financial data can provide the missing link between these beneficial activities and financial results by providing forward-looking information on accounting or stock performance. For example, interim research results or customer indices may offer an indication of future cash flows that would not be captured otherwise.

Finally, the choice of measures should be based on providing information about managerial actions and the level of “noise” in the measures. Noise refers to changes in the performance measure that are beyond the control of the manager or organization, ranging from changes in the economy to luck (good or bad). Managers must be aware of how much success is due to their actions or they will not have the signals they need to maximize their effect on performance. Because many non-financial measures are less susceptible to external noise than accounting measures, their use may improve managers’ performance by providing more precise evaluation of their actions. This also lowers the risk imposed on managers when determining pay.

Disadvantages

Although there are many advantages to non-financial performance measures, they are not without drawbacks. Research has identified five primary limitations. Time and cost has been a problem for some companies. They have found the costs of a system that tracks a large number of financial and non-financial measures can be greater than its benefits. Development can consume considerable time and expense, not least of which is selling the system to skeptical employees who have learned to operate under existing rules. A greater number of diverse performance measures frequently requires significant investment in information systems to draw information from multiple (and often incompatible) databases.

Evaluating performance using multiple measures that can conflict in the short term can also be time-consuming. One bank that adopted a performance evaluation system using multiple accounting and non-financial measures saw the time required for area directors to evaluate branch managers increase from less than one day per quarter to six days.

Bureaucracies can cause the measurement process to degenerate into mechanistic exercises that add little to reaching strategic goals. For example, shortly after becoming the first US company to win Japan’s prestigious Deming Prize for quality improvement, Florida Power and Light found that employees believed the company’s quality improvement process placed too much emphasis on reporting, presenting and discussing a myriad of quality indicators. They felt this deprived them of time that could be better spent serving customers. The company responded by eliminating most quality reviews, reducing the number of indicators tracked and minimizing reports and meetings.

The second drawback is that, unlike accounting measures, non-financial data are measured in many ways, there is no common denominator. Evaluating performance or making trade-offs between attributes is difficult when some are denominated in time, some in quantities or percentages and some in arbitrary ways.

Many companies attempt to overcome this by rating each performance measure in terms of its strategic importance (from, say, not important to extremely important) and then evaluating overall performance based on a weighted average of the measures. Others assign arbitrary weightings to the various goals. One major car manufacturer, for example, structures executive bonuses so: 40% based on warranty repairs per 100 vehicles sold; 20% on customer satisfaction surveys; 20% on market share; and 20% on accounting performance (pre-tax earnings). However, like all subjective assessments, these methods can lead to considerable error.

Lack of causal links is a third issue. Many companies adopt non-financial measures without articulating the relations between the measures or verifying that they have a bearing on accounting and stock price performance. Unknown or unverified causal links create two problems when evaluating performance: incorrect measures focus attention on the wrong objectives and improvements cannot be linked to later outcomes. Xerox, for example, spent millions of dollars on customer surveys, under the assumption that improvements in satisfaction translated into better financial performance. Later analysis found no such association. As a result, Xerox shifted to a customer loyalty measure that was found to be a leading indicator of financial performance.

The lack of an explicit casual model of the relations between measures also contributes to difficulties in evaluating their relative importance. Without knowing the size and timing of associations among measures, companies find it difficult to make decisions or measure success based on them.

Fourth on the list of problems with non-financial measures is lack of statistical reliability – whether a measure actually represents what it purports to represent, rather than random “measurement error”. Many non-financial data such as satisfaction measures are based on surveys with few respondents and few questions. These measures generally exhibit poor statistical reliability, reducing their ability to discriminate superior performance or predict future financial results.

Finally, although financial measures are unlikely to capture fully the many dimensions of organizational performance, implementing an evaluation system with too many measures can lead to “measurement disintegration”. This occurs when an overabundance of measures dilutes the effect of the measurement process. Managers chase a variety of measures simultaneously, while achieving little gain in the main drivers of success.

Once managers have determined that the expected benefits from non-financial data outweigh the costs, three steps can be used to select and implement appropriate measures.

Understand Value Drivers

The starting point is understanding a company’s value drivers, the factors that create stakeholder value. Once known, these factors determine which measures contribute to long-term success and so how to translate corporate objectives into measures that guide managers’ actions.

While this seems intuitive, experience indicates that companies do a poor job determining and articulating these drivers. Managers tend to use one of three methods to identify value drivers, the most common being intuition. However, executives’ rankings of value drivers may not reflect their true importance. For example, many executives rate environmental performance and quality as relatively unimportant drivers of long-term financial performance. In contrast, statistical analyses indicate these dimensions are strongly associated with a company’s market value.

A second method is to use standard classifications such as financial, internal business process, customer, learning and growth categories. While these may be appropriate, other non-financial dimensions may be more important, depending on the organization’s strategy, competitive environment and objectives. Moreover, these categories do little to help determine weightings for each dimension.

Perhaps the most sophisticated method of determining value drivers is statistical analysis of the leading and lagging indicators of financial performance. The resulting “causal business model” can help determine which measures predict future financial performance and can assist in assigning weightings to measures based on the strength of the statistical relation. Unfortunately, relatively few companies develop such causal business models when selecting their performance measures.

Review Consistencies

Most companies track hundreds, if not thousands, of non-financial measures in their day-to-day operations. To avoid “reinventing the wheel”, an inventory of current measures should be made. Once measures have been documented, their value for performance measurement can be assessed. The issue at this stage is the extent to which current measures are aligned with the company’s strategies and value drivers. One method for assessing this alignment is “gap analysis”. Gap analysis requires managers to rank performance measures on at least two dimensions: their importance to strategic objectives and the importance currently placed on them.

Our survey of 148 US financial services companies — a joint research project sponsored by the Cap Gemini Ernst & Young Center for Business Innovation and the Wharton Research Program on Value Creation in Organizations – found significant “measurement gaps” for many non-financial measures. For example, 72% of companies said customer-related performance was an extremely important driver of long-term success, against 31% who chose short-term financial performance. However, the quality of short-term financial measurement is considerably better than measurement of customer satisfaction. Similar disparities exist for non-financial measures related to employee performance, operational results, quality, alliances, supplier relations, innovation, community and the environment. More important, stock market and long-term accounting performance are both higher when these measurement gaps are smaller.

Integrate Measures

Finally, after measures are chosen, they must become an integral part of reporting and performance evaluation if they are to affect employee behavior and organizational performance. This is not easy. Since the choice of performance measures has a substantial impact on employees’ careers and pay, controversy is bound to emerge no matter how appropriate the measures. Many companies have failed to benefit from non-financial performance measures through being reluctant to take this step.

Conclusion

Although non-financial measures are increasingly important in decision-making and performance evaluation, companies should not simply copy measures used by others. The choice of measures must be linked to factors such as corporate strategy, value drivers, organizational objectives and the competitive environment. In addition, companies should remember that performance measurement choice is a dynamic process – measures may be appropriate today, but the system needs to be continually reassessed as strategies and competitive environments evolve.

NEW adidas BHJ - White Running, Cross Training (Men's Multiple Sizes),
Adidas Cloudfoam Racer Mens Trainers US 8.5 REF 470*,

Citing Knowledge@Wharton

Close


For Personal use:

Please use the following citations to quote for personal use:

MLA

"Non-financial Performance Measures: What Works and What Doesn’t." Knowledge@Wharton. The Wharton School, University of Pennsylvania, 06 December, 2000. Web. 15 October, 2018 <

APA

Non-financial Performance Measures: What Works and What Doesn’t. Knowledge@Wharton (2000, December 06). Retrieved from

Chicago

"Non-financial Performance Measures: What Works and What Doesn’t" Knowledge@Wharton, December 06, 2000,
accessed October 15, 2018.


For Educational/Business use:

Please contact us for repurposing articles, podcasts, or videos using our content licensing contact form.

Additional Reading

  • By many measures, Comcast overpaid to acquire British pay TV firm Sky -- but if transformation is Comcast’s goal, the cost could be justified, experts say.

  • The buyer's journey does not begin with awareness, as is traditionally thought, but instead before the potential buyer is aware there is even a need, notes the author of this opinion piece.

  • Companies are refining their business intelligence gathering by capturing smart data and conducting analytics to yield the desired insights.

adidas Men's Rockadia m Trail Running Shoe, Core Black/Matte Silver/Carbon, 12 M,
VINTAGE unworn ADIDAS 019158 SANTIAGO Trainers /,

Log In or sign up to comment

Adidas Originals Gazelle Classic Retro Trainers,
Adidas NEW Originals Tubular Shadow Mens 11.5 46 Suede Running Shoes BY3576 kw,
adidas Messi 16.3 Astro Turf Trainers Mens US 12 /3 REF 898=,
  • Puma men's court breaker SD fashion sneaker smoked pearl size 10.5
  • SCARPE ADIDAS ORIGINALS CG4562 TUBULAR SHADOW CBLACK/FTWWHT/CBLACK MODA UOMO
  • Vans skating shoes atwood black/sudan/antique size 12 us new with box
  • Puma Women Basket Bow Puma White 367319 01 - BRAND NEW IN BOX!!
  • Adidas BUSENITZ White White Leather Skateboarding D69124 (326) Men's Shoes
  • Adidas Supernova Women's Size 8 Running Shoes CG4039 Aero Blue NEW
  • ASICS Women's GEL-Moya Running Shoe
  • CONVERSE PRO LEATHER 76 OX SZ 10.5 BLACK 157729C
  • Adidas Yeezy Boost 350 V2 Triple White - UK Sizes 7.5