Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.

Are You Still Using a First Generation Performance Framework?

What is a “first” or “second” generation Performance Management and Measurement framework?

Let’s begin by defining these concepts.

First generation Performance Management and Measurement frameworks derive Key Performance Indicators (KPIs) from strategy.  These include well known and established frameworks, such as Balanced Scorecard (BSC) and EFQM Excellence Model.

These first generation frameworks have led organizations to increase the number and range of performance measure, but do not add the value that could be achieved.   These frameworks have significant weaknesses in the way that these KPIs are identified, integrated, communicated and acted upon.

On other hand, a second generation Performance Management and Measurement frameworks derives KPIs from stakeholder and organizational needs.  This concept was developed by Andrew Jack, when he observed the management and employee dissatisfaction with existing Performance Measurement and Management frameworks.  To address these issues, Andrew Jack developed the second generation framework, Value Mapping.

Value Mapping focuses on driving true value for the organization, by deriving measures tied to Value Drivers and Value Outcomes:

  • Value Drivers are things that drive Value Creation.
  • Value Outcomes are the desired outcomes for the stakeholders.

The Value Mapping framework utilizes a pictorial way of integrating the most useful performance measures, which helps employees to reconnect themselves to their performance.  It identifies the most important value required by the stakeholders and then develops a strategy to integrate it.  Value Mapping also focuses on effective communication and assets that can create greater value to drive performance.


From the Value Mapping process visual above, we see the components of this model are:

  • Value Needs Assessment
  • Review of Strategy and Objectives
  • Mapping and Integration of Objectives
  • Predicted Value Outcome Mapping
  • Value Drivers Assessment
  • Value Driver Mapping
  • Measures Development and Refinement
  • Communication, Planning, and Allocation of Energy/Resources
  • Value Outcome Assessment and Reporting Value

All organizations should be value-focused.  This is the basis to Value Mapping.  The Value Mapping model is an approach to value creation that uses the language of value to identify and structure performance measures.

Before we can review and develop our KPIs, we need to understand the Value Outcomes that we are trying to create, which are influenced by the needs of our stakeholders.

Value Mapping, specifically, helps management and employees reconnect with performance measures and performance management.  Value Mapping identifies the most important stakeholder needs and uses these to measure value outcomes, as well as to develop an integrated strategy. Value Mapping approach also places great emphasis on the effective communication of the activities and assets that create value, the value drivers, and the measures of their performance.  It is an approach that can help to structure the reporting of value for all people concerned in the success of the organization.

Are you a management consultant?  You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

Interested in gaining more understanding on how to implement Value Mapping?  You can learn more and download an editable PowerPoint about Value Mapping here on the Flevy documents marketplace.

About David Tang

David Tang is an entrepreneur and management consultant. His current focus is Flevy, the marketplace for premium business documents (e.g. business frameworks, presentation templates, financial models). Prior to Flevy, David worked as a management consultant for 8 years. His consulting experience spans corporate strategy, marketing, operations, change management, and IT; both domestic and international (EMEA + APAC). Industries served include Media & Entertainment, Telecommunications, Consumer Products/Retail, High-Tech, Life Sciences, and Business Services. You can connect with David here on LinkedIn.

, , , , , ,

Complimentary Business Training Guides

Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]   This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]
We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]   We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function






The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most articles have been contributed for management consultants and industry executives with over 20 years of experience. If you would like to contribute an article, please email our editor David Tang at [email protected].

Flevy (https://flevy.com) is the marketplace for premium business documents, such as management frameworks, presentation templates, and financial models. Our documents are of the same caliber produced by top tier consulting firms, like McKinsey, Bain, Accenture, BCG, and Deloitte. Learn more about Flevy here.

Connect with Flevy:


About Flevy.com   /   Terms   /   Privacy Policy
© 2020. Flevy LLC. All Rights Reserved.