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.
