Ricerc@Sapienza

Any research on strategies for reaching business excellence aims at revealing the appropriate course of actions any executive should consider. Thus, discussions take place on how effective a performance measurement system can be estimated, or/and validated. Relevant questions can be raised, like: can one find an adequate measure (i) on the performance result due to whatever level of investment, and (ii) on the timing of such investments? We argue that extreme value statistics provide the answer. We demonstrate that the level and timing of investments allow to be forecasting small and medium size enterprises (SME) performance, — at financial crisis times. The ”investment level” is taken as the yearly total tangible asset (TTA). The financial/economic performance indicators defining ”growth” are the sales or total assets variations; ”profitability” is defined from returns on investments or returns on sales. Companies on the Italian Stock Exchange STAR Market serve as example. It is found from the distributions extreme values that outlier companies (with positive performance) are those with the lowest but growing TTA. In contrast, the SME with low TTA, but which did not increase its TTA, before the crisis, became a ”negative outlier”. The outcome of these statistical findings should suggest strategies to SME board members.