The Five Key Principles of Corporate Performance Management

Five Key Principles of Corporate Performance
Management (CPM) – A Best Seller
Award Winning Executive Shares Leading Edge Research and

Case Study
Bob Paladino, CPA, MBA
Bob Paladino, Managing Partner

Bob Paladino & Associates, LLC
2543 Washington Road – Suite 910
Pittsburgh, PA 15241
978-857-6766 Fax 412-220-2454
Email: bobpaladino@paladinoassociates.com
Visit our website www.paladinoassociates.com Bob Paladino &
Associates, LLC
Introductions, About the Speaker
¾ Led Kaplan & Norton CPM /Balanced Scorecard Consulting
Practice
¾ Directed Crown Castle International’s CPM program as SVP
Global Performance in the CEO Office; Crown
¾ Won Kaplan & Norton’s Balanced Scorecard Hall of Fame Award
¾ Earned APQC’s Best Practice Partner Award
¾ WSJ Ranked Crown Top 20 Most Improved Company on
Shareholder Score Board
¾ Launched CPM Implementation Consulting & Training Firm

¾ Author – Five Key Principles of CPM
2 Bob Paladino &

© Copyright 2007 Bob Paladino & Associates, LLC Associates, LLC
Bob Paladino & Associates, LLC
The Firm - Services and Service Partners
Consulting and Training Services Service Partners

¾ American Productivity & Quality Center
¾ Strategic Planning
(APQC)
¾ Planning & Budgeting
¾ American Strategic Management Institute
¾ Balanced Scorecard (ASMI)
¾ Benchmarking ¾ Balanced Scorecard Collaborative (BSCol)

¾ Better Management Inc.
¾ Process Improvement
¾ Business Budget Roundtable (BBRT)
¾ Six Sigma Green Belt
¾ Center for Advanced Manufacturing -
¾ Knowledge Management International (CAM-I)
¾ Conference Board
¾ Harvard Business School (HBS) Press
¾ Institute of Management Accountants (IMA)
¾ Motorola University - Six Sigma
3 Bob Paladino &

Starting a New Executive Role….
In 2002, CEO Crown Castle International invited me to establish a Global
Performance Office to direct global CPM efforts…. I had many questions:
¾ What are best practices for this new function?
¾ How did winning companies organize themselves?
¾ What are their core competencies?
¾ How did they achieve frame-breaking results?
¾ Many more questions……. so it was time to study the winners
“Only the fool learns from his own mistakes, the wise man learns
from the mistakes of others.” - Otto von Bismarck
4 Bob Paladino &

...Against a Challenging Landscape….
¾ The Telecom meltdown had begun, Crown customers were starting to consolidate and
capital markets were contracting.
¾ Booz Allen Hamilton - reported “European and North American CEOs topped the list of
involuntary exits.”
¾ Fortune - “If making the Fortune 100 best lists is an enormous accomplishment,
consider how tough it is to repeat the feat every single year. Just 22 companies have
appeared on our list every year since its 1998 inception.” The turnover is staggering.
¾ Kaplan & Norton – “9 out of 10 Companies Fail to Implement Their Business Strategies”
¾ HR Magazine – “Executives are expected to demonstrate results faster than ever
before; CEO, CFO, COO, and CIO turnover has accelerated rapidly in the past few
years”
5 Bob Paladino &

…Posed the Question…..
“What do Malcolm Baldrige Quality Award, Global

Balanced Scorecard Hall of Fame Award, Sterling Award,
Deming Award, Fortune 100 Best Company Award and
APQC Award winning enterprises all have in common?”
“Man’s mind, stretched to a new idea, never goes back

to its original dimensions”
– Oliver Wendell Holmes
6 Bob Paladino &

...Commenced Research on Winning Organizations….
Participated with executives and leaders from dozens of leading organizations that
included Balanced Scorecard Hall of Fame, Baldrige, Sterling, Fortune, and
APQC Best Practice Partner Award winners; research projects and clients
included:
¾ Commercial Performance Management Consortia Best Practice Project
¾ Government Performance Management Consortia Best Practice Study Project
¾ Kaplan and Norton’s Office of Strategic Management Study (OSM) Group
¾ Customer Relationship Management (CRM) Consortia Best Practice Study
Project
¾ Knowledge Management (KM) Consortia Best Practice Study Project
¾ Best Practice Sharing Consortia Study Project
¾ Numerous high performing companies and divisions
7 Bob Paladino &

…. Gained Exposure to Top Leadership Thinking…
National Malcolm Baldrige Quality Award winners who have out performed
their peers in many performance categories including Medrad, Boeing,
Bronson Methodist, Motorola, and City of Coral Springs Florida (Sterling State
Award).
American Quality & Productivity Center (APQC) Best Practice Partner
Award winners including Hilton Hotels, TVA, Bank of America, Jet Blue,
Saturn, American Red Cross, Florida Department of Health, and LL Bean.
Global Balanced Scorecard Hall of Fame Award winners including U.S.
Army, Crown Castle International, Canon, Ricoh, Royal Canadian Mounted
Police (RCMP), Serono, Tennessee Valley Authority (TVA), and KeyCorp.
High Performing Enterprises including Marriott, Raytheon, Siemens, Sprint
Nextel, Anheuser Busch, First Energy, Hearst Publications, LB Foster,
Bonneville Power Administration (BPA), Federal Reserve Bank, and M7
Aerospace.
Book Royalties Will be Shared to Fund Tower of Voices Flight 93 Memorial
8 Bob Paladino &

…. Learned “5 Key Principle” Organizations Demonstrate
Consistent Winning with Multiple Recognitions.
Balanced APQC U.S. President Governor Deming Fortune
Scorecard Best Malcolm Sterling Award 100 Best
Global Hall Practice Baldrige Quality Companies
of Fame Award National Award to Work
Award Quality Award For Award
Enterprise (Kaplan &
(alphabetical order) Norton)
American Red Cross
Bronson Methodist Hospital 2 times 3 times
City of Coral Springs
Crown Castle International
Florida Dept of Health 2 times
Hearst Publications
(Houston Chronicle)
KeyCorp
LB Foster Company
Medrad
Raytheon
Ricoh 2 times
Serono International
Forbes
Sprint Nextel Award
Tennessee Valley Authority
“I'm against a homogenized society, because I want the cream to rise.” - Robert Frost
9 Bob Paladino &

The Winners Circle
Book Royalties Will be Shared to Fund Flight 93 Memorial

10 Bob Paladino &
A Great Deal of Interest in CPM
#1 of 1,621 Management & Leadership Titles
Royalties Will be Shared to Fund Flight 93 Memorial

11 Bob Paladino &
“Five Key Principles” Containing Over 30 Best Practices Provides the
Framework to Accelerate Performance
12 Bob Paladino &

Principle 1: Establish and Deploy CPM Office and Officer–
Bronson Book Case Study
“Paladino [Bob] effectively leverages his considerable knowledge and experience as a

management consultant and chief performance officer at Crown Castle to produce a
compelling case for a Corporate Performance Management office. The CPM office becomes the
focal point for translating strategic intent to operational actions. The concept is enriched by
the book’s excellent examples from both private and public sector organizations.”
- Dr. Robert S. Kaplan, Harvard Business School; Co-Developer of Balanced Scorecard,

Strategy Focused Organization, and Activity-Based Costing
13 Bob Paladino &

About Bronson Methodist Hospital
¾ Bronson stands out in the Health Care Sector ¾ Bronson Methodist Hospital is a non-profit
with numerous awards: medical center:
¾ Malcolm Baldrige National Quality Award (2005) ¾ The hospital is the flagship organization in the
¾ Michigan Quality Leadership Award (2001, 2005) Bronson Healthcare Group.
¾ 100 Top Hospitals Award (2005). ¾ Generates $751 million in gross patient revenues.
¾ Governor’s Award of Excellence for Improving ¾ Bronson’s 3,200 employees and 780 medical staff
Care in Hospital Setting (2004, 2005) manage more than 77,000 emergency visits and
¾ Governor’s Award of Excellence for Improving 21,000 admitted patients each year.
Preventive Care in the Ambulatory Care Setting ¾ Providing inpatient and outpatient care from a 28-
(2005) acre urban campus in downtown Kalamazoo,
¾ FORTUNE magazine's "100 Best Companies to Michigan.
Work For" (2004, 2005, 2006) ¾ Established in 1900, Bronson is a 343-bed state-
¾ Working Mother’s “100 Best Companies for of-the-art, all-private room facility designed as a
Working Mothers” (2003, 2004, 2005) peaceful, healing environment.
¾ VHA Leadership Award for Operational ¾ Michele Serbenski, Executive Director,

Excellence (2005, 2006) Corporate Effectiveness & Customer
¾ To learn more go to the website Satisfaction is acknowledged for her
www.bronsonhealth.com contributions to the book case.
Adapted from “Five Key Principles of Corporate Performance Management” Bob Paladino , Wiley Publishing 2007, All Rights Reserved
14 Bob Paladino &

About Bronson Methodist Hospital
¾ The Bronson culture is built on a focus and passion

for excellence. Its mission to provide excellent
healthcare services. This statement reflects what
Bronson does and why it exists.
¾ The mission, values, commitment to patient care
excellence, and philosophy of nursing excellence
provide the foundation that supports the
organizational strategy, which is illustrated in the
vision to be a national leader in healthcare quality
and the three Cs of corporate strategies (exhibit )
¾ Bronson’s commitment to excellence begins with
the visionary leadership provided by President and
CEO, Frank J. Sardone. “Continuously raise the
bar” is Sardone’s leadership mantra and a concept
that has moved Bronson steadily forward in
achievement of its vision to be a national leader in
healthcare quality.
“We make a living by what we get, we make a life by what we give.”

- Sir Winston Churchill
15 Bob Paladino &

Principle 1: Establish and Deploy CPM Office and Officer
Best Practice Highlights
¾ Executive Sponsorship. Bronson sponsored CPM Officer at a high level

¾ Organizational Level and Reporting Relationship. CPM Office Executive reports to a
CEO direct report
¾ CPM Office Staff. Small senior team experienced in change programs, full time roles
¾ Leadership, Influence Factors. Able to organize large scale virtual teams to drive
results in one of more CPM methods (Plan, Do, Check, Act)
¾ Ownership of CPM Processes and Methods. Established centralized CPM oversight
with senior executives. Executive team owns and directs the Strategic Management
Model process enterprise wide
¾ Collaborative Maturity. Experienced in working horizontally and vertically through the
organization
(A more complete list and examples of best practices exists in the book)
16 Bob Paladino &

Principle 2: Refresh & Communicate Strategy
FIVE PRINCIPLES presents guidance for the design, development, and

implementation of a strategic planning and control system. Such a system leads
toward better strategic decisions, competitive advantage, and increased
profitability. Drawing on his profuse knowledge and extensive practical
experience, Bob Paladino conveys a lively coverage of essential ideas and
examples of ways to improve performance.
-Charles T. Horngren, Professor Emeritus, Stanford University, father of Cost

Accounting
17 Bob Paladino &

Principle 2: Refresh & Communicate Strategy-
Step by Step
¾ The vision and mission failed promises were it not for the top-level commitment of
Bronson staff, who believe in the values and demonstrate them every day to patients.
¾ Bronson’s success depends on the ability to achieve the three Cs (below)
“It's not enough that we do our best; sometimes we have to do what's required.”
- Sir Winston Churchill
18 Bob Paladino &

Strategic Management Model
¾ Strategic planning at Bronson is a continuous process driven by the mission, values,

and vision. Based on Baldrige feedback, the planning process was reevaluated and
enhanced, integrating the strategic, financial, human resource, staffing, and education
plans into a very robust strategic management model (SMM).
¾ The key steps of the SMM and the time frame for executing each step are shown
below.
19 Bob Paladino &

Short and Long Term Goals, Plans, KPIs
20 Bob Paladino &

Best Practices Highlights
¾ Strategic Planning. Bronson personnel conduct strategic planning to understand changing market
conditions including competitor, supplier, rivals, potential entrants, and substitutes in the
marketplace. SMM includes a comprehensive SWOT analysis.
¾ Strategic Planning. Bronson has effectively linked its philosophy, mission, strategies, and annual
plan with its BSC goals and measures, which are cascaded throughout the company. Bronson links
strategic, operational, and people plans.
¾ Strategic Plan. Bronson produces a comprehensive strategic plan that is updated continuously
throughout the year.
¾ Core and Adjacent Products and Services. Bronson defines and determines core, adjacent, and
new services to focus on highest probabilities for success.
¾ Link Strategic Planning and Budgeting Processes. Bronson links strategic planning to the
budgeting process to provide for a seamless continuum.
¾ Communications Plan. Bronson communicates strategy throughout the organization using a
comprehensive communications plan.
¾ (A more complete list and examples of best practices exists in the book)
21 Bob Paladino &

Principle 3: Cascade and Manage Strategy
“Bob Paladino’s observations and principles are firmly rooted in the

Kaplan/Norton Strategy Focused Organization (SFO) methodology. Bob is to be
congratulated for his creative extension of these principles and for the illustrative
cases provided. He has successfully walked the tightrope of theory and practice
– a good read.”
- David P. Norton, Co-Inventor Balanced Scorecard and Strategy Focused

Organization Concepts, Boston, Massachusetts
22 Bob Paladino &

Principle 3: Cascade & Manage Strategy-
Cascading Scorecard Objectives and Measures
¾ The executive team developed an enhanced strategic plan cascade shown below (left) in an effort to
strengthen alignment across the organization.
¾ The annual strategic plan, with specific tactics and action plans aligned by the three Cs, is deployed
to the organization through this robust cascade Cardiologists cascade below (right) for example.
“When you can measure what you are speaking about, and express it in numbers, you
know something about it; but when you cannot measure it, when you cannot express it
in numbers, your knowledge is of a meager and unsatisfactory kind. - Lord Kelvin
23 Bob Paladino &

Principle 3: Cascade & Manage Strategy- Staff Performance
Management System, Alignment to Strategic Objectives
¾ The Staff Performance Management System

(SPMS) is designed to support organization-
wide expectations of high performance work
by all staff.
¾ It is the primary mechanism for the

achievement of action plans.
¾ Seventy percent of individual leader

performance is based on achievement of the
strategic objectives as measured by the
organizational scorecard.
¾ The remaining 30 percent is based on

individual goals that must also support the
strategic plan.
24 Bob Paladino &

Principle 3: Cascade and Manage Strategy
Best Practice Highlights
¾ Partner with Business Owners. Partner with business owners including line and staff leadership team
members to gain support and influence as partners to help them achieve results.
¾ Develop level 1 Balanced Scorecard. Developed an executive level BSC, the highest level in the
organization.
¾ Leverage Proven BSC or Comparable Methods. Leveraged proven BSC methods including use of the
four perspectives and appropriate number of measures.
¾ Cascade BSC to Lower Levels. Cascaded the BSC to the lowest levels of the organization including to the
individual employee level.
¾ Align Support Services. Aligned support services to the corporate BSC objectives and measures.
¾ Align Teams and Individual Employees. Defined personal BSCs for teams and/or individuals that align
with higher level and support services BSCs.
¾ Link Compensation. Align rewards, recognition, and compensation programs to the balanced scorecard.
¾ Manage Using Measures. Effectively managed the business using BSC meeting management techniques
focused on exception based management. Manage BSC meetings to address the appropriate mix of
strategic and operational issues; link these issues with Principle 4 Business Improvement.
25 Bob Paladino &

Principle 4: Improve Performance
“Lots of organizations are measuring performance, but few succeed in effectively

managing performance. This timely book contains time tested insight from
leading companies and provides a ‘how-to’ guide for jumpstarting performance
improvement initiatives in your organization.”
-Carl DeMaio, President and Founder The Performance Institute and American
Strategic Management Institute (ASMI)
26 Bob Paladino &

Plan, Do, Check, Act (PDCA) Performance Improvement System
¾ Through daily use of the PDCA

model, Bronson achieves
improvement, learning and
innovation.
¾ The Focus PDCA model for

improvement creates the
mechanism for improvement of
key processes and continuous
organizational learning.
“Measurement without the opportunity to improve is harassment!”

- E. Deming (father of quality)
27 Bob Paladino &

Improving the Customer Experience: Listening and Learning Methods
¾ Understanding customers and their

requirements is essential to achieving
success.
¾ The Customer Research Program (CRP) and
its listening and learning methods are kept
current through the PDCA model.
¾ Bronson utilizes both qualitative and
quantitative listening and learning methods
for annual strategic planning as well as
monthly reviews by the CASE Strategic
oversight teams and the executive team, to
determine customer requirements.
“The measure of success is not whether you have a problem to deal with, but whether
it’s the same problem you had last year.”- J. F. Dulles
28 Bob Paladino &

Improving Customer Relationships, Managing and Resolving Complaints
¾ All employees are empowered and

expected to resolve patient complaints
24x7.
¾ Employees are oriented, trained, and
coached to proactively handle
complaints using the service recovery
process.
¾ The process includes specific steps to
acknowledge, apologize, and amend.
¾ The individual who receives the
complaint assumes responsibility for
investigation, follow-up and resolution,
according to the detailed steps in the
patient complaint management process
29 Bob Paladino &

Best Practice Highlights:
¾ Prioritize Improvement Projects. Identify and prioritize strategic and operational initiatives to
improve organization’s performance along financial, customer or constituent, process and people
dimensions.
¾ Leverage Customer Facing Processes . Develop and exercise customer/patient processes to
understand and recalibrate processes around changing customer needs. Gather customer and
competitor intelligence through the use of regular customer survey, focus groups, call centers,
quality function deployment, and related methods and approaches.
¾ Leverage Process Improvement Methods. Design and maintain an ongoing process improvement
and problem-solving program based on PDCA, root case, and failure modes effects analysis
methods and tools to identify and eliminate root causes of issues.
¾ Realize Value from Benchmarking Processes. Leverage benchmarking and comparative methods
to identify and regularly improve core and support processes.
¾ Create a Performance Improvement Culture. Create a virtual community of practice of
practitioners to coordinate and optimize improvement efforts enterprise-wide..
30 Bob Paladino &

Principle 5: Manage and Leverage Knowledge
“Read this book if you want a practical guide—based on real experience—to take
your organization to higher levels of performance.”
-Carla O’Dell, President American Productivity and Quality Center (APQC)
Global Expert on Knowledge Management
31 Bob Paladino &

Principle 5: Manage and Leverage Knowledge,
Knowledge Management – A Holistic View
¾ Bronson makes needed data and information ¾ Wireless-enabled laptops and other devices
both available and accessible to staff, are available for checkout to patients, family
suppliers, partners, and patients through the members, or physicians so they can remain
state-of-the-art IMS. productive and connected while on our
¾ Validation of data availability and campus.
accessibility are key elements of the ¾ Email is provided to all staff, and is
processes that support the IMS. accessible from hospital PCs (including
¾ Bronson maintains a computer network of general-purpose “surf stations” for staff that
digitally available data for all stakeholders. do not use PCs as part of their day-to-day
¾ Access to the network is obtained through jobs), and is also available via the Bronson
locally attached workstations, wireless- wireless network and the Internet.
enabled devices, and the public Internet. ¾ Interactive kiosks, integrated with the public
Bronson website, assist patients and visitors
with facility maps, service directories, and
other information useful while in our facilities.
“By three methods we may learn wisdom. First, by reflection, which is noblest; second,
by imitation, which is easiest; and third, by experience, which is bitterest.”
- Confucious
32 Bob Paladino &

Effective Skill Sharing and Communications
¾ Communication and skill sharing

are recognized as being critical to
organizational success.
¾ A systematic process to facilitate
and ensure effective
communication, skill sharing, and
knowledge transfer has been
developed, incorporating formal
and informal mechanisms
33 Bob Paladino &

Best Practice Highlights:
¾ Develop KM Processes. Establish and leverage best practice identification, gathering, and sharing
processes and technology solutions
¾ Leverage Technology . Partner with the IT function to launch and maintain KM systems.
¾ Link KM with Improve Performance Process. Link best practice or knowledge management
processes with Principle 4 Improve Performance processes to capture solutions and innovations.
¾ Share Best Practices with Strategic Planning. Share best practices with strategic planning
processes to better understand core competencies and possible strategic advantages.
¾ Maintain a Virtual KM Network. Establish and maintain virtual network of KM experts throughout
the enterprise to optimize knowledge and to keep processes evergreen.
““Although the last, not least. “ - William Shakespeare
34 Bob Paladino &

Five Key Principles of CPM Bridge the Divide and Provide for
Strategy Execution
“Bob Paladino has taken a balanced approach of taking all attributes of high performing businesses and turning
them from theory to practical application. His book also discusses a step by step approach by using case studies
which, if followed, will help organizations get to the maturity level in a timely manner”.
-Ashok G. Vadgama, President Center for Advanced Management Institute (CAM-I)”
Contact us for Training and Consulting Expertise
35 Bob Paladino &

About the Speaker
¾ Firm provides Corporate Performance Management (CPM) consulting

services to Fortune 1000 companies.
¾ Hall of Fame winning clients; who have been profiled in recent best-selling
books; Harvard Business Review; Forbes; & Fortune magazines.
¾ Served as VP & Global Consulting Practice Leader for Drs. Kaplan & Norton
at the Balanced Scorecard Collaborative in affiliation with Harvard Business
School; led winning programs for Balanced Scorecard Hall of Fame Award
and APQC’s Best Practice Award.
¾ Quoted and published extensively in leading journals; among highest rated
speakers at industry and trade events
¾ CPA; dual MBA (Finance & Management) from The Wharton Graduate
School of Business at the University of Pennsylvania; member of the AICPA
and MSCPA.
Managing Partner, Bob Paladino & Associates, LLC
bobpaladino@paladinoassociates.com 978-857-6766
Visit our website: www.paladinoassociates.com
36 Bob Paladino &


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Five Key Principles of Corporate Performance

Management (CPM) – A Best Seller

Award Winning Executive Shares Leading Edge Research and

Bob Paladino, Managing Partner

¾ Launched CPM Implementation Consulting & Training Firm

2 Bob Paladino &

Consulting and Training Services Service Partners

¾ Benchmarking ¾ Balanced Scorecard Collaborative (BSCol)

3 Bob Paladino &

¾ What are best practices for this new function?

¾ How did winning companies organize themselves?

¾ What are their core competencies?

¾ How did they achieve frame-breaking results?

¾ Many more questions……. so it was time to study the winners

4 Bob Paladino &

5 Bob Paladino &

“What do Malcolm Baldrige Quality Award, Global

“Man’s mind, stretched to a new idea, never goes back

6 Bob Paladino &

7 Bob Paladino &

Book Royalties Will be Shared to Fund Tower of Voices Flight 93 Memorial

8 Bob Paladino &

9 Bob Paladino &

Book Royalties Will be Shared to Fund Flight 93 Memorial

Royalties Will be Shared to Fund Flight 93 Memorial

12 Bob Paladino &

“Paladino [Bob] effectively leverages his considerable knowledge and experience as a

- Dr. Robert S. Kaplan, Harvard Business School; Co-Developer of Balanced Scorecard,

13 Bob Paladino &

¾ FORTUNE magazine's "100 Best Companies to Michigan.

Working Mothers” (2003, 2004, 2005) peaceful, healing environment.

¾ VHA Leadership Award for Operational ¾ Michele Serbenski, Executive Director,

14 Bob Paladino &

¾ The Bronson culture is built on a focus and passion

“We make a living by what we get, we make a life by what we give.”

15 Bob Paladino &

¾ Executive Sponsorship. Bronson sponsored CPM Officer at a high level

16 Bob Paladino &

FIVE PRINCIPLES presents guidance for the design, development, and

-Charles T. Horngren, Professor Emeritus, Stanford University, father of Cost

17 Bob Paladino &

¾ Bronson’s success depends on the ability to achieve the three Cs (below)

18 Bob Paladino &

¾ Strategic planning at Bronson is a continuous process driven by the mission, values,

19 Bob Paladino &

20 Bob Paladino &

21 Bob Paladino &

“Bob Paladino’s observations and principles are firmly rooted in the

- David P. Norton, Co-Inventor Balanced Scorecard and Strategy Focused

22 Bob Paladino &

23 Bob Paladino &

¾ The Staff Performance Management System

¾ It is the primary mechanism for the

¾ Seventy percent of individual leader

¾ The remaining 30 percent is based on

24 Bob Paladino &

25 Bob Paladino &

“Lots of organizations are measuring performance, but few succeed in effectively

26 Bob Paladino &

¾ Through daily use of the PDCA

¾ The Focus PDCA model for

“Measurement without the opportunity to improve is harassment!”

27 Bob Paladino &

¾ Understanding customers and their