3.3 BSC versus the Performance Pyramid
The Performance Pyramid was introduced together by Cross and Lynch (1992). It focuses on the linkage of organization’s strategy with its operations not over four levels, that seem to fit into one another in the achievement of objectives. According to Stefan (2004), the development of company’s Performance Pyramid starts with defining an overall corporate vision at the first level, that translated into specific business unit objectives. The second level is concerning the setting of short-term targets and long-term goals. The business operating system links top-level to day-to-day operational measures. The four key performance measures (quality, cycle time, delivery, waste) are applied at departments …show more content…
It emphasize that companies should focus on finding new market space instead of focusing on battling the competitors in existing market places. It incorporates the idea that says swim where the ocean is clear, blue and non-competitive. BOS can be defined as “a consistent pattern of strategic thinking behind the creation of new markets and industries where demand is created rather than fought for and the rule of competition is irrelevant” .This indicates that BOS philosophy depends on that companies should reduce their existing competition, which result in winners and losers. Instead, companies should depend on their innovation abilities to create new market strategies over the existing once. Kim and Mauborgone (2005) point out that there are six key risks impede the development of BOS strategies of the companies. Those are search risk, planning risk, scope risk, business model risk, organizational risk, and management risk. To overcome these risks, Kim and Mauborgone claim that companies should address six principles; reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome key organizational hurdles, and build execution into
The Performance Pyramid was introduced together by Cross and Lynch (1992). It focuses on the linkage of organization’s strategy with its operations not over four levels, that seem to fit into one another in the achievement of objectives. According to Stefan (2004), the development of company’s Performance Pyramid starts with defining an overall corporate vision at the first level, that translated into specific business unit objectives. The second level is concerning the setting of short-term targets and long-term goals. The business operating system links top-level to day-to-day operational measures. The four key performance measures (quality, cycle time, delivery, waste) are applied at departments …show more content…
It emphasize that companies should focus on finding new market space instead of focusing on battling the competitors in existing market places. It incorporates the idea that says swim where the ocean is clear, blue and non-competitive. BOS can be defined as “a consistent pattern of strategic thinking behind the creation of new markets and industries where demand is created rather than fought for and the rule of competition is irrelevant” .This indicates that BOS philosophy depends on that companies should reduce their existing competition, which result in winners and losers. Instead, companies should depend on their innovation abilities to create new market strategies over the existing once. Kim and Mauborgone (2005) point out that there are six key risks impede the development of BOS strategies of the companies. Those are search risk, planning risk, scope risk, business model risk, organizational risk, and management risk. To overcome these risks, Kim and Mauborgone claim that companies should address six principles; reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome key organizational hurdles, and build execution into