The failure of performance management systems: performance measurement and project selection issues
15 September 2017
University of Antwerp - City Campus - Aula C.002 - Gebouw C, Prinsstraat 13 - 2000 Antwerp (route: UAntwerpen, Stadscampus
Jelle Van Camp
Prof. dr. Johan Braet
PhD defence Jelle Van Camp - Faculty of Applied Economics
Increased globalization catalyzes the displacement of primary and secondary activities to third world countries. This forces the former ‘western’ world to concentrate on the first stages of new business development: research, technology development, product development and innovation. As the human factor appears to be a majorly important element to keep competitive advantage, having ‘entrepreneurial skills’ are said to be pivotal in order to manage innovation and to face its inherently related risks.
In a first part, the main research question focusses on the (theoretical) promises and (practical) shortcomings of performance measurement systems (PMS) and their contribution to a management system with regards to supporting innovation. The dual approach of an encompassing literature study and interviews with practitioners returned a checklist of 36 failures of PMS attributed to three levels: metric, framework and management. This taxonomy presents a fil rouge for both academics and practitioners, when dealing with performance measurement.
In a second part, the entrepreneurial skills and human elements of new business developments and their selection are assessed. The exploratory research taps into the selection process and selection criteria as installed by business programs, incubators, business angels, venture capital firms and banks. Via different unit of analyses and multiple cases, general learning curves between these actors were discovered. Additionally, an elaborate business case within a renowned product development multinational was conducted. Although a quantitative model supporting project selection - based on objective data and exempt from human judgement – could not be constructed, this case allowed further validation of the previously identified checklist.
In sum, this dissertation can be seen as a call to arms to install a culture of measurement – with clear focus - within each organization (from start-up, to multinational, to government). The proposed checklist of 36 caveats paves the way for installing new or updating existing measurement systems. Only then is the decision maker able to make well informed decisions and safeguard the efficient selection of new products and new projects. Due to enhancements in ICT systems, data driven decision support systems will only gain momentum in the future.