The Corporate Performance Management Practitioner

 

There are a number of reference books available that provide definitions for the hundreds of potential measures that could be rolled into a CPM project, but Steven M. Braggâ??s Business Ratios and Formulas is one of the best.

 

I particularly like the straightforward format he uses for each formula:

1. Description - Why is this measure important?
2. Formula - How is this measure calculated?
3. Example - How is this measure used in a “real world” scenario?
4. Cautions - How can this measure be misused and what are its limitations?

 

He provides a number of useful examples of this format on his website.

 

Certainly most readers have heard the old platitude “Figures Lie and Liars Figure”. As CPM practitioners, we must be aware of how numbers can be misused. The Cautions section of each metric is great for minimizing sub-optimal optimization. (How is that for sounding like a consultant!). I do not recall any other measure definition book having the equivalent to the  Cautions section.

 

This book goes beyond most in exploring measures beyond traditional Financial measures. There are Theory of Constraint measures, marketing effectiveness measures, departmental efficiency measures, and a great deal more. The measures for the accounting and engineering departments are excellent.

 

My only criticism of this book it is that each measure is presented completely independent of all other measures. While this makes perfect sense given that the book is designed to be a measure definition reference, it would be helpful to see how these measures are interrelated.

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