A time-proven management assumption claims that you can not manage what you can not measure. Regrettably, a number of companies still resort to only financial indicators for the assessment of their activities, limitations of which are widely known and criticised.
Financial indicators are based on historical information and reflect only one aspect of the implementation of the company's operational strategy.
Whereas other essential elements, such as clients, stakeholders, process efficiency, growth and development, employees, are left behind the system of performance assessment and management, although, usually they are the driving forces for the company’s success (financial as well) in the future.
One-sided orientation towards financial indicators prevents the company from understanding factors which determine its operating results and timely responding to a changing environment. It also fails to ensure the quality of management solutions and the strategy-focused motivation system.
Challenges faced by organisations