Business Performance
Management
There’s confusion...
– Let’s get some measures!
• Death by a thousand measures; measurement
becomes the core business
– Let’s set some targets!
• Conflict: Cut costs but increase customer
contact; Dysfunction: wrong behaviours are
rewarded
– What we need is discipline; tell everyone what to do!
• Confusion: ―last month all you wanted was
utilisation, now all you want is sales
— what’s
going
on?‖
Good measurement helps you
manage because it tells you...
• What’s going to happen (in advance!)
• What action you need to take
• Whether that action was effective
Performance management is a process
What do I want to
achieve?
Objectives
How do I propose to
achieve it?
Strategy
What do I have to get
right?
Critical Success Factors
How do I know I succeeded? Who
do I reward
?
Measures and
accountabilities
There needs to be a link from
objectives to accountabilities
Business Performance
Linkages
Wade & Recardo (2001:50)
5
Strategic Planning
Organisational
Performance
Financial
Reporting
Operational
Reporting
Customer
Reporting
HR Practices
Technology
Organisational Alignment Model
Theory of
Business
Strategy
Corporate
Scorecard
Gap
Analysis
Business
Plan
Process
Activity
Measures
Performance
Profile
Compensation
Feedback
Wade & Recardo (2001:47)
6
Measurement links the 3 areas
of Management in any business
How we manage
the work we do
How we manage
people
How we manage
capital investment
GLUE
How we measure
progress
Business Excellence
The European Foundation for Quality Management Framework
8
Leadership
Key
Performance
Results
People
Partnerships
and
Resources
Policy and
strategy
Society
results
Customer
results
People
results
Results
Enablers
Innovation and Learning
Processes
Business Performance
Management in Context
GOALS
• Improving how
managers think and act
• Effective deployment of
resources for results
Decision
Support
Process
Improvement
Problem
Analysis
Performance
Measurement
Implementing
Promoting
Providing
Supporting
9
Organisational Architecture
10
Adapted from Wade & Recardo (2001:62)
Strategy
HR
Practices
Communication
Performance
Measures
Technology
Process
Culture
Levels of Performance
Management
Level/Outcomes
Objectives
Design
Measurement
Perspective
Organisation
• The overarching
strategy
• The value migration
• Organisational
alignment
• The business plan
• Strategy-driven
functions
• EVA or CVA value of
functions
• Permeability of
boundaries
• ABC/ABM-driven
• Financial
• Customer
• Organisational
• Operations
• Growth and
innovation
Process
• Conformance to
customer standards
• Process owner
• Inputs
• Outputs
• Service level
agreements
• Boundary crossings
• Cost
• Cycle time
• Quantity
• Quality
• Conformance to
standards
Job
• Report cards
• Easy access
• Motivation
• selection
• Process maps
• Function charts
• Task analysis
• Activities
• Outcomes
• Target measures
• Data sources
11
The five key components of
Performance Management
12
Understand your model for
success
Identify performance measures
for success
Cascade the performance
measures and their application
Establish performance reporting
for relevant measures
Coach, incentivise and reward
success with a transparent
approach