Carmine Bianchi Full Professor in Business & Public Management University of Palermo

1. Enhancing Planning & Control Systems to Foster Sustainable Growth University of Palermo (Italy) Carmine Bianchi Full Professor in Business & Public Management University of Palermo Scientific Coordinator of CED4 System Dynamics Group bianchi@unipa.it - www.ced4.it

2. Agenda • Organizational growth, Strategy and Performance • Measuring organizational growth • Strategic resources, Performance and Growth • Fostering Growth Sustainability • Managing Organizational Growth: a DBSC approach • Conclusions

3. Organizational Growth, Strategy and Performance • Growth = Aptitude of an organization to attain a set of results leading to its long-term success and continuity. • Strategy = Constitution, development/improvement or change of a set ‘structures’ (strategic resources) to affect the relationships of an institution with its environment, i.e. to impact on organizational performance. • Performance = the result of decisions on the constitution and deployment of strategic resources.

4. Measuring Organizational Growth • Quantitative vs. Qualitative (Growth vs. Development) • Structural vs. Operational Organizational strategic resources Accumulation rate Depletion rate

5. Strategic Resources, Performance, and Growth (1 of 2) Capacity Depletion rate Accumulation rate Perceived Delivery Delay Liquidity Change in perceived delivery delay Cash flows Sales Orders Backlog Accumulation rate Depletion rate

6. Strategic Resources, Performance, and Growth (2 of 2) • Tipping point in managing strategic resources to affect organizational performance  Capability of policy makers to: • identify those strategic resources which most determine the success in the environment where an organization or different organizations operate; • insure that the endowment of such resources is satisfactory over time; • keep a proper balance between the different relevant strategic resources.

7. Framing Growth Sustainability (1 of 2) External Social performance Competitive performance Financial performance Short –term performance Internal Strategic Business Areas / Government Functions Performance Funcional Areas performance Long–term performance Time

8. Framing Growth Sustainability (2 of 2) Multi-organization system: territory or industry performance Shared strategic resources INTERINSTITUTIONAL LEVEL Accumulation rate Depletion rate Organizational strategic resources INSTITUTIONAL LEVEL Accumulation rate Depletion rate Single organization system: Financial, Competitive and Social performance

9. Managing Organizational Growth: a Dynamic BSC approach • Are conventional P&C systems able to properly support organizational policy and decision makers to manage growth? • Is it possible to outline a general conceptual framework to assess growth sustainability and manage performance in any kind of organization?

10. Supporting P&C systems to foster performance improvement through a Dynamic BSC approach • An objective view • An instrumental view • A subjective view

11. ACTIVITIES PROCESSES To the external client To the internal client Supporting P&C systems to foster performance improvement through a Dynamic BSC approach -Objective View “PRODUCTS”

12. STRATEGIC RESURCES PERFORMANCE DRIVERS Supporting P&C systems to foster performance improvement through a Dynamic BSC approach- Instrumental View Capacity Equity Image Liquidity Cash flows Sales revenues Income Sales orders Change in organizational image Delivery delay END RESULTS

13. GOALS & OBJECTIVES ACTIVITIES & PROCESSES (ACTIONS) Supporting P&C systems to foster performance improvement through a Dynamic BSC approach – Subjective View PERFORMANCE DRIVERS & END-RESULTS

14. ACTIVITIES & PROCESSES (Actions) Policy Levers OBJECTIVES STRATEGIC RESOURCES PERFORMANCE DRIVERS & END-RESULTS Supporting P&C systems to foster performance improvement through a Dynamic BSC approach– Synthesis “PRODUCTS”

15. Conclusions • Organizational Growth management/measurement is not a simple task: organizations today operate in dynamic complex systems • The design of proper P&C systems can greatly contribute to support and empower decision makers in this role • Traditional P&C systems are inadequate: they lack of focus on strategic complex issues (e.g. intangibles, inertial phenomena, non-linearities) • Dynamic BSCs can greatly support decision makers in this task.

16. Thanks! bianchi@unipa.it www.ced4.it