The last point stresses how important it is that performance measurement systems are dynamic so that they remain relevant and continue to reflect the issues important to any business. There are a number of models of performance measurement which can be used by management. This article considers the 'performance pyramid' of Lynch and Cross (1991)1. The model represents an acknowledgement by the writers that traditional performance measurement systems were falling short of meeting the needs of managers in a much changed business environment.
Lynch and Cross suggest a number of measures that go far beyond traditional financial measures such as profitability, cash flow and return on capital employed. The measures that they propose relate to business operating systems, and they address the driving forces that guide the strategic objectives of the organisation. Lynch and Cross propose that customer satisfaction, flexibility and productivity are the driving forces upon which company objectives are based. They suggest that the status of these driving forces can be monitored by various indicators which can be derived from lower level (departmental) measures of waste, delivery, quality and cycle time. The performance pyramid derives from the idea that an organisation operates at different levels each of which has a different focus. However, it is vital that these different levels support each other. Thus the pyramid links the business strategy with day-to-day operations.