Application of a systems approach to sustainable development performance measurement

Abstract

PurposeThe purpose of this paper is to demonstrate how a systems approach can be used to facilitate the development of an organizational performance measurement system.Design/methodology/approachBased on a review of the literature, the paper introduces the implications for applying a systems approach to organizational performance measurement. To demonstrate the transition from theory to practice, a case study is provided to show how a sustainable development performance measurement system was developed at a Canadian electric utility. The case study involved extensive consultation with over 25 experts.FindingsThe paper finds that a systems approach is useful in developing the process and that a set of formal systems criteria is useful in developing the structure and content of a performance measurement system. These concepts are highlighted throughout the case study example.Research limitations/implicationsThe case study section was based on findings from a single organization. Further work is required to validate the findings within other organizations.Practical implicationsThe paper shows how a robust sustainable development performance measurement system may be developed at an electric utility. The overarching emphasis on integration of the system with the case utility's mainstream initiatives demonstrates that a performance measurement system must build on what the organization already has in place. The systems‐based approach and formal systems criteria used in the paper may be transferable to other organizations.Originality/valueThe paper shows that a systems approach provides both the structure and flexibility needed to guide the design, implementation, and evolution of a sustainable development performance measurement system within existing organizational infrastructure.