Performance Prism

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The Performance Prism is a stakeholder-focused management framework designed to help organisations to decide what is most important to measure and manage, and how to integrate the results as part of a performance management system. Its stakeholder focus makes the Performance Prism relevant to contemporary strategic and operating environments in diverse commercial, public sector and charitable organisations.

The Performance Prism is a flexible modern management framework that provides a structured process. It builds on the best parts and seeks to address the shortcomings of earlier frameworks and their associated methodologies, such as the Balanced Scorecard (and the various reiterations made to its sub-sets by its authors over the last decade that attempt to patch some of its more obvious inadequacies), the work on shareholder value creation, and the various self-assessment frameworks, like the Malcolm Baldrige award criteria and the EFQM’s business excellence model.

Three fundamental premises underpin the Performance Prism concept. First, it is no longer acceptable (or even feasible) for organisations to focus just on the needs of one or two of their stakeholders – typically shareholders and customers – if they wish to survive and prosper in the long term. Second, an organisation’s strategies, processes and capabilities have to be aligned and integrated with one another if the organisation is to be best positioned to deliver real value to all of its crucial stakeholders. Third, organisations and their stakeholders need to recognise that their relationships are reciprocal – stakeholders have to contribute to organisations, as well as expect something from them; relationships are symbiotic and so there are interdependencies.

The Performance Prism consists of five inter-related perspectives on performance that pose some extremely important questions:

Stakeholder Satisfaction – Who are our key stakeholders and what do they want and need?

Stakeholder Contribution – What do we want and need from our stakeholders (on a reciprocal basis)?

Strategies – What strategies do we need to put in place to satisfy the wants and needs of our key stakeholders, while satisfying our own requirements too?

Processes – What processes do we need to put in place to enable us to execute our strategies?

Capabilities – What capabilities do we need to put in place to allow us to operate, maintain and enhance our processes?

Together these five perspectives provide a comprehensive and integrated framework for thinking about organisational performance in today’s working environment.

In this way, the Performance Prism helps to identify each of the critical components that need to be addressed, from a performance measurement and management point of view, in order to satisfy both the various stakeholders’ and the organisation’s wants and needs. Clearly, organisations must choose which crucial elements of these perspectives or facets of the Performance Prism framework they wish to focus their performance management attentions on at any given time during their evolution.

The Peformance Prism was developed by the Centre for Business Performance, Cranfield School of Management, www.performanceprism.com