A. Why is it important to understand the factors that impact cash flow?

Cash flow issues are notable issues in most companies that fail. Companies need to monitor their cash flow to meet current obligations. Monitoring cash flow indicates where cash comes from and how it is spent. Cash pays salaries, suppliers and taxes, therefore running out of cash by having it locked up in other assets (accounts receivables, inventories, etc) could stop an otherwise promising business endeavor. Cash flow statements can determine a business’s ability to pay interest and principal to creditors and dividends to shareholders.

A (i). How can the factors vary based on the waves of change?

The industrial change wave provided the impetus for controlling costs and the informational change wave provided more knowledge on drivers of costs. The next wave or judgment wave provides ideas on what to monitor. Each social change wave has with it a different perspective; therefore a different influence on the cash flow factors is possible.

B. Does a leader’s lens perspective impact the benchmarks he or she identifies as critical for the organization and the analysis of such benchmarks?

Certainly… the leader will have a perception of what benchmarks should be used to help manage the business. If their background is more related to the competitive perspective then their focus will be more on best practices and competing to set the benchmarks. If more systems oriented then the focus will be on how to measure and improve as compared to benchmarking activities.

C. Many organizations use the balanced scorecard approach… Why is it important to obtain different evaluations? Would you recommend this approach?

I would support this approach because each functional area will have their own perspective on how to reach goals outlined in the strategic plan and measured by the balanced scorecard. It relates to the 4 lens perspective we’ve discussed, each area will approach the topic differently. By allowing this type of process you allow each functional area to help interpret the plan, and of course this will improve commitment to the ideas. This gives accountability to each area for developing and meeting the metrics.