Leveraging measurement systems to drive enterprise transformation: Two case studies from the U.S. aerospace industry

  • Authors:

  • Ricardo Valerdi;Craig Blackburn

  • Affiliations:

  • (Correspd. Tel.: +1 617 253 8583/ Fax: +1 617 258 7845/ E-mail: rvalerdi@mit.edu) Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, USA;Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, USA

  • Venue:
  • Information-Knowledge-Systems Management
  • Year:
  • 2010

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Abstract

The focus of this paper is to depict the role of measurement systems in driving enterprise behavior and guiding enterprise transformation. Although enterprise transformation and performance measurement are separate areas of study, few have made the connection to determine the role of measurement systems in transformation. To provide insight into this role, a brief review of performance measurement literature is considered followed by two detailed case studies that illustrate their connection. Both case studies come from ACME Aerospace, a large contractor engaged primarily with the United States Department of Defense, but provide differing perspectives. In particular, one portrays one business units' reactive transformation effort that relied on a bottom-up measurement system, whereas the second portrays how corporate leadership sets measurement strategy to drive behavior in a more proactive sense. In these case studies, three common themes are evident regarding the role of metrics and measurement systems in transformation: (1) the need for using metrics and measurement systems for driving the right behavior; (2) the need for the presence of formal and informal infrastructure for adoption and sustainment; and (3) the need for support from top management. After reviewing these two case studies, enterprise analysis techniques are employed in a discussion aimed at understanding the relationship between measurement systems and enterprises with the ultimate goal of changing behavior to enable transformation.