The role of performance measurement in aligning operations with strategy: sustaining cognitive processes of internal alignment

Rethinking organizational performance management: a complexity theory perspective

Purpose

Traditional approaches to organizational performance management that emphasize objectivity, control and predictability are rapidly losing relevance in an environment characterized by increasing levels of complexity and dynamism. This paper draws on complexity theory to suggest a new paradigm for managing performance in organizations.

Design/methodology/approach

The paper draws on the common features of complex systems and the corresponding concept of emergence to revisit key themes in organizational performance management and propose a set of implications for research and practice.

Findings

Understanding organizations as complex systems and performance as an emergent property of such systems leads to a set of new research questions, the adoption of alternative methods and the formulation of novel propositions. It also has various implications for both academic research and managerial practice, from moving away from the traditional notion of organizational alignment to adopting a more explicit stakeholder-based view in the design and use of measurement systems.

Originality/value

The paper highlights the great potential of complexity theory for addressing contemporary issues in the field of organizational performance management and charting the landscape for its future development.

Organizing for permanent beta: performance measurement before vs performance monitoring after release of digital services

Purpose

Due to the complexity of digital services, companies are increasingly forced to offer their services “in permanent beta”, requiring continuous fine-tuning and updating. Complexity makes it extremely difficult to predict when and where the next service disruption will occur. The authors examine what this means for performance measurement in digital service supply chains.

Design/methodology/approach

The authors use a mixed-method research design that combines a longitudinal case study of a European digital TV service provider and a system dynamics simulation analysis of that service provider's digital service supply chain.

Findings

With increased levels of complexity, traditional performance measurement methods, focused on detection of software bugs before release, become fragile or futile. The authors find that monitoring the performance of the service after release, with fast mitigation when service incidents are discovered, appears to be superior. This involves organizational change when traditional methods, like quality assurance, become less important.

Research limitations/implications

The performance of digital services needs to be monitored by combining automated data collection about the status of the service with data interpretation using human expertise. Investing in human expertise is equally important as investing in automated processes.

Originality/value

The authors draw on unique empirical data collected from a digital service provider's struggle with performance measurement of its service over a period of nine years. The authors use simulations to show the impact of complexity on staff allocation.