Short answer
Develop and implement KPIs that explicitly measure and manage compliance-related risks to foster a more resilient and successful business.
- Field
- Innovation & Markets
- Source
- Journal of Tourism and Services (2023)
- Method
- Quantitative research using Partial Least Squares Structural Equation Modelling (PLS-SEM).
- Evidence
- Strong effect
Integrating risk indicators into Key Performance Indicator (KPI) selection strengthens compliance and enhances sustainable business growth, particularly in regulated sectors. This innovation & markets research insight is drawn from a 2023 study published in Journal of Tourism and Services. Using Quantitative research using partial least squares structural equation modelling (pls-sem)., researchers explored how this design variable affects real-world outcomes. The key design takeaway: Develop and implement KPIs that explicitly measure and manage compliance-related risks to foster a more resilient and successful business.
Risk-Aware KPIs Drive Sustainable Business Excellence
Integrating risk indicators into Key Performance Indicator (KPI) selection strengthens compliance and enhances sustainable business growth, particularly in regulated sectors.
Journal of Tourism and Services · 2023
Key Findings
- 01A significant relationship exists between compliance procedures and risk factors.
- 02Strict adherence to rules correlates with proficient risk management.
- 03Risk-aware KPIs are significant in guiding financial entities towards sustained excellence and growth.
Application
Design takeaway
Develop and implement KPIs that explicitly measure and manage compliance-related risks to foster a more resilient and successful business.
How to apply
When designing performance management systems, incorporate risk assessment frameworks to identify and prioritize KPIs that address potential compliance failures and their impact.
Project actions
- 01When choosing KPIs for a design project, think about what could go wrong (risks) and how to measure that.
- 02Consider how your design choices might introduce new risks or mitigate existing ones.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Employs a robust statistical method (PLS-SEM) for model testing.
- +Addresses a current and pressing need for revised KPI methodologies in regulated industries.
Limitations
It can be challenging to accurately quantify risk and its direct impact on specific KPIs without extensive data.
Reliability & validity
The use of PLS-SEM suggests a focus on predictive and explanatory power, aiming for reliability in the model's relationships. Validity would depend on the accurate operationalization of 'compliance procedures' and 'risk factors'.
Think critically
To what extent can risk assessment alone predict business success, or are other factors equally, if not more, important?
Design Principles
"Integrate risk assessment into performance measurement for enhanced organizational resilience and sustainable growth."
For businesses, especially those in finance, understanding and quantifying the relationship between compliance procedures and risk is crucial for long-term viability. This approach moves beyond traditional performance metrics to a more dynamic and resilient business strategy.
What This Means for Your Design
Using KPIs that look at risks helps businesses follow rules better and grow more steadily.
How to use in your project
- 1.Reference this study when discussing the importance of risk management in your design process or when justifying your choice of performance metrics.
Add to My Project
Quick Cite
Paragraph starter
This research highlights the critical link between compliance risk and business performance, suggesting that 'risk-aware KPIs' are essential for sustainable growth. By integrating risk indicators into performance measurement, organizations can proactively manage potential issues and foster a more resilient operational framework, aligning with strategic objectives and market demands.
Source
Journal of Tourism and Services
Business KPIs Based on Compliance Risk Estimation
journal · 2023
View sourceQuestions About This Research
- What does the research say about risk-aware kpis drive sustainable business excellence?
- Develop and implement KPIs that explicitly measure and manage compliance-related risks to foster a more resilient and successful business. Evidence: Journal of Tourism and Services (2023).
- Why does "Risk-Aware KPIs Drive Sustainable Business Excellence" matter for design?
- For businesses, especially those in finance, understanding and quantifying the relationship between compliance procedures and risk is crucial for long-term viability. This approach moves beyond traditional performance metrics to a more dynamic and resilient business strategy.
- How can designers apply this research?
- Develop and implement KPIs that explicitly measure and manage compliance-related risks to foster a more resilient and successful business.
- What were the main findings?
- A significant relationship exists between compliance procedures and risk factors.. Strict adherence to rules correlates with proficient risk management.. Risk-aware KPIs are significant in guiding financial entities towards sustained excellence and growth.
- What research method was used?
- Quantitative research using Partial Least Squares Structural Equation Modelling (PLS-SEM)..
- How strong is the evidence?
- Evidence strength is rated Strong effect, based on a 2023 journal from Journal of Tourism and Services.
- What should I do differently in my next project?
- When designing performance management systems, incorporate risk assessment frameworks to identify and prioritize KPIs that address potential compliance failures and their impact.
- What are the limitations?
- The study's focus on the financial sector may limit generalizability to other industries without adaptation.