Performance Management Manifesto is an article by Robert G. Eccles regarding a new revolution in performance management, mainly relating to the loosening of the traditional financial-associated performance measurement and emphasis of other measures of performance. According to Eccles, the problem with the current method of performance measurement lies with the fact that financial figures act as the foundation for performance measurement. Eccles argues that this method is archaic and inaccurate, as it tends to measure “the consequences of yesterday’s decisions” rather than “indicating tomorrow’s performance.” Eccles believes that a well-round performance measurement consisting of factors outside of financial figures is a more holistic approach to performance measurement that will be of significant relevance in the future as well. Eccles’s main argument relates to the fact that financial data does not fully indicate business performance. Other factors, including quality, customer satisfaction, market share, competitive analysis, and innovation, often reflect a company’s economic growth and condition to a much fuller extent. Customer service and satisfaction, for example, is a definitive logical step in the development of quality measures. Even if the company is doing well financially, Eccles argues, a low quality measure and customer satisfaction will deter future business growth, which will bring down the company’s worth in the future.
In order to start a revolution in performance management, Eccles claims that five critical steps are necessary: developing an information architecture, putting the technology in place to support the information architecture, aligning incentives for managers and employees under the new system, drawing on outside resources for measures, and designing a process to ensure that the other four steps occur fluently and effectively. Many firms currently operate under officially gathering information solely about financial figures; much of other pertinent information is simply retained by individuals or discarded. Developing an information architecture logically makes sense if all other factors are to be considered as important as financial figures so that performance measurement in all key areas will be full of robust information. In that sense, developing technology to support the new architecture is imperative; without sufficient complexity in technology, any new information is bound to be lost or simply left abandoned amongst the myriad of information that is available. In order to push the revolution in performance measurement, aligning incentives is equally important. Without sufficient incentives, measuring new ways of performance will be left virtually untouched by individuals who believe that financial figures are the most important factors to consider. Utilizing outside resources is another key step because not all information is available to a firm or it may not be economically feasible to collect information from one firm. Most importantly, however, Eccles believes that the conviction of a key person such as the CEO or a member of senior management is necessary to fuel and continue to push the new methods of performance measurement. Without a key person or department pushing the movement, efforts for this revolution will not occur. Throughout Performance Measurement Manifesto, Eccles provides color on issues regarding the inefficient system of performance measurement and improvements that could take place. While some may argue that financially driven measurement is the only valid method, Eccles’s viewpoints are valid and logical. By utilizing Eccles’s new method, companies and firms will be able to further enhance their performance measurement, in both present time and in the future.