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Demand Driven Performance by Chad Smith, Debra Smith

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CHAPTER 6
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Efficiency, Flow, and the right Measures
The “Right” Measures
“What are the right measures?” This is a common first question. As mentioned before, the primary “right” financial measure is return on investment performance. A company cannot claim to have improved if it does not have an improvement in ROI. It is also the only measurement that makes net profit relative to the effort invested. If the net earnings are reported as $50 million for the prior period, it is only “good” in relation to the invested capital to get those earnings. It is a happy day for a small services company; not happy days at Microsoft, Boeing, or Unilever. An organization’s ...

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