Frequently Asked Questions about the Methodology

This page contains the most common questions about the Methodology and may anticipate questions you have. See also the FAQ's about the International Executive Network and the 2002 Report.

If after reviewing these FAQ's you still have questions about the methodology, please Contact Us.

What is the objective of the methodology?
How stable is the methodology overall and for firms?
What are the fundamental capabilities measured with the methodology?
What is OMEC and how is it determined?
Which capability reflects the quality of performance measurement systems?
How does the MECA methodology differ from TQM?
How does the MECA methodology differ from PIMS?

Q: What is the objective of the methodology?
A: To measure the fundamental capabilities of corporate competitive fitness for the creation of long-term shareholder value.

Q: How stable is the methodology overall and for firms?
A: The MECA methodology tends to produce results that are quite stable. This is evidenced by the stability of the Overall OMEC ratings year-to-year.

One reason for stability is that firm ratings result from multiple executives within the organization, preferably from different functions and business units. Firm ratings are based on responses to a 182-item questionnaire on specific aspects of business. A second reason is that the nature of the questionnaire is to uncover firm evolutions early on such that shifts are identified before they result in big changes to the fundamental capabilities of a firm. This means that upward or downward movements in business capabilities should be visible before financial results are impacted. Third, because the survey is conducted confidentially, executives are more prone to answer honestly as opposed to being influenced by colleagues or more senior staff. For this reason, the results escape being a reflection of the latest events taking place within the firm i.e. product launch, restructuring, external or internal communications.

Q: What are the fundamental capabilities measured with the methodology?
A: Mission & Vision, Customer Orientation, Corporate Culture, Organization & Systems, Planning & Intelligence, Human Resources, Technical Resources, Innovation, Market Strategy, Marketing Operations, International, Performance. A 13th capability, E-Business, was introduced for the first time in 2001 but it is not used to calculate OMEC.

Q: What is OMEC and how is it determined?
A: The Overall Market Effectiveness Capability is the overall index of a firm based on the average ratings of the original 12 capabilities. OMEC ratings permit making comparisons between firms easily, but external factors not accounted for in OMEC help provide a more complex and more accurate picture. Regardless of whether a firm has achieved high or low ratings, an OMEC comparison can serve as a starting point from which to gain deeper understanding of the changes required to sustain and grow a firm.

Q: Which capability reflects the quality of performance measurement systems?
A: Performance measurement systems would come under "Organization and Systems" as one of the underlying indicators.

Q: How does the MECA methodology differ from TQM?
A: The MECA methodology differs from TQM in that it is a diagnostic monitoring tool designed to analyze an entire firm at regular intervals. TQM has a narrow focus on product and service quality, although it has been broadened to include more dimensions such as customer perspective. TQM is a change initiative that is usually undertaken to address a recognized need within a specified time period.

While both MECA and TQM focus on improving the internal and intangible assets of a firm, MECA assesses all market capabilities whereas TQM addresses specific aspects of a firm. Since the MECA methodology provides the initial assessment and ongoing measures to ensure positive impact of change, it can be used in conjunction with TQM.

Using the MECA methodology before and after a TQM initiative would give insight into the success of the initiative and where improvements may still be required. A combined approach would monitor the impact of change initiatives available to executives: reorganization, asset restructuring, market orientation programs or information technology enhancements.

Q: How does the MECA methodology differ from PIMS?
A: The most notable difference between MECA and PIMS is that PIMS focuses on product strategy whereas the objective of MECA is to create long-term shareholder value. The second difference is that PIMS surveys are administered at the Product or Business Unit level, whereas MECA can be applied for an entire firm, business unit, location, country, etc. The third difference is that while PIMS seeks to uncover causes for variations in ROI amongst products, MECA is a diagnostic to help executives determine the balance of capabilities required to generate long-term shareholder value.

While both MECA and PIMS are based on systematic survey methodologies, MECA uses a multiple-respondent approach whereas PIMS uses a single-respondent approach. Both provide benchmarks and comparisons between firms and industries.