January 16, 2009, Newsletter Issue #88: How Performance Intensive Is Your Business?

Tip of the Week

The book “The Performance Manager,” Mosimann, et al, cited work by the McKinsey Quarterly that identified three characteristics of business performance:

Transformational – activity involved with extracting/converting materials into finished goods.Transactional – processing materials from basic form to applied products.Tacit – procedural activities, such as retail sales or performing services, requiring tacit or experience for success.Among the observations made regarding these interesting categories of business, the authors note that there have been more economic gains in tacit work activities. Is this possibly an effect of technology? Then they note that investment continues to be heavier in transactional activities. Is this a result of the decades old trend of shedding labor in favor of automation or off shoring? Finally, it is suggested that it was harder to sustain a competitive edge in both transactional and transformational business. Does this follow the adage of: if it’s easy to do, everyone does it? These observations seem to raise interesting indicators of how intensity of work performance can help classify your business.

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