When setting priorities it is helpful to distinguish between absolute and relative performance. Absolute performance sets the minimum requirements — are you in the red or black, are you growing or contracting? Relative performance, expressed in percentile rankings, tells you where you have the most room for improvement and sets an upper bound on what is reasonable for you, given how well you’re already performing in comparison with other companies.
How well or poorly companies are doing on absolute and relative performance says a great deal about where they are likeliest to achieve significant improvement.
Author: Michael E. Raynor
Source: Harvard Business Review
Subjects: Achievement, Management, Measurement