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Chapter 12. Your Communication Base: Val... > Financial and Performance Comparison...

Financial and Performance Comparisons

Financial value themes (and financial value statements) are based on the principle of drawing a causal relationship between one point on the finance-to-performance spectrum depicted at the bottom of figure 12-2 and another point on the same spectrum. Any two points on the spectrum can be used to draw a causal relationship. The higher or broader measure will be referred to as the financial measure. The smaller or more detailed measure will be referred to as the performance measure. The use of broader versus more specific measures gives us the flexibility to use the most appropriate terms depending on whom we are communicating with.

For example, if you are communicating with the CFO about the financial value depicted in figure 12-2, you could use CPM as your financial measure and materials as your performance measure because materials is a smaller, more detailed measure than CPM is. It is not always necessary to go down to the Individual measure to contrast finance with performance. Conversely, if you were communicating with a 1st/Ops manager about financial value in figure 12-2, you could use materials as the financial measure most relevant to the 1st/Ops manager and rework rate as your smaller, more detailed performance measure.


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