EVA, CVA and PVA-the quality metrics for the 1990´s

For maximum effectiveness, total quality management (TQM) paradigms must be aligned with strategic business directions and plans. However, to date, few entities have exhibited the powerful performance that comes with achievement of such alignment. While total quality approaches that emphasize such metrics as cost of quality and six sigma have had significant impacts in some companies, their roles are limited by the inability to find strong correlations between these measures and long or short-term business results. Relationships are masked by the confounding effects of all of the other changes-technological, economic, and competitive-that take place concurrent with TQM. This paper addresses key elements of the issue of forging a total quality approach that is aligned with an entity´s strategic intent. Key elements of this approach are new performance and quality metrics that provide instrumentation for the approach, in parameters that are aligned with the dimensions of business success. We describe the roles that such metrics play. We provide brief technical descriptions of three such “umbrella” metrics-economic value added(EVA), customer value added (CVA) and people value added (PVA) and discuss the experience to date with their implementation and operation