Sunday, June 9, 2019

Three Measurement Principles to Accelerate Stellar Business Performance

At its core, performance management is about creating a work environment that helps the company meet its business goals. 

Enterprise Performance management is a holistic management discipline involving development, enablement, and enhancement. One of the biggest pitfalls for performance measurement is about measuring the “part” with ignorance of the “whole.” Thus, outcome-based measurement practices are important to focus on the performance of the entire organization by taking a multidimensional approach to connect all important dots with multifaceted perspectives. In practice, the more meaningful and important the thing you want to assess, the harder it is to measure objectively. Here are three measurement principles to accelerate steller business performance.

Ensure strategic focus: At the strategic level, organizations concern about long term business results, competency building, customer satisfaction or employee engagement. The purpose of managing performance is about setting performance metrics to evaluate the status of strategy management, making objective assessments of the business result, and understanding performance measurement contextually. It’s important to define the right performance measurements, track them and know what to do with them, understand the performance improvement. The effective approach to keep track of the achievement of strategic goals is to cascade those down throughout the organization to a more specific level of tactical tasks of business function and the individual’s work goals. The good measures motivate teams to achieve more but the bad measurement perhaps encourages silo thinking and distracts the business management from achieving the ultimate goals. The most dangerous part of performance measurement is to emphasize the part but ignore the whole when the performance system is connected with the motivation system on an operational level, but disconnected from the strategy management.

Raise everybody's level of accountability: Lack of accountability is often one of the biggest obstacles to getting things done or cause change inertia in the business. To accelerate steller business performance, it’s important to tie individual performance to the profits of the entire company and enforce accountability. Help staffs understand the priorities, perspectives, and strengths of people from other parts of the organization. If you ensure the individuals have the autonomy within their tasks, you will be able to address performance on an equal partnership base. One of the great reason to do the performance management process is to work with employees to improve their performance regardless of the current level so that they can better contribute to organizational goals. Other reasons involve making sure managers get the information they need to manage effectively. With the well-defined measurement, performance accountability can be harnessed by motivating your employees to achieve higher than expected results and building the culture of learning, trust, and professionalism.

Drive innovation that is relevant to the bigger picture: To harness innovation, the innovation performance measurement should focus on the business goals and desired behaviors. The problem for innovation measurement is often that the business innovation initiative is not well defined. It’s the common knowledge that innovation requires the highest risk-taking at a strategic value chain, including investment and asset management. Without well-defined goals, you won’t have an effective plan and enough time to generate tangible business results. The innovation performance depends on the quality of the ideas entering it and the organizational mechanics that evaluate and implement the ideas. Normally organizations look for KPIs measuring business results generated by innovation efforts. But it takes quite some time for a new innovation drive to produce those measures. Innovation performance could be measured in terms of its ability to convert the ideas that enter the “innovation pipeline” into the desired output, propositions, or process improvement, etc. For example, the process performance indicator demonstrates the growing capability of the organization to deliver more innovation with business impact in the future. It’s also important to drive innovation that is relevant to the bigger picture. The well-defined innovation performance measurement should enable the business building innovation competency and develop an innovative culture.

Corporate performance management is not just about managing numbers with metrics, At its core, performance management is about creating a work environment that helps the company meet its business goals. All company’s performance is directly related to the decisions people make every day, from executives to the frontline, across functional areas and geographical locations. The corporate performance management needs to do a similar adjustment to ensure the individual performance are assessed objectively and the corporate performance is evaluated holistically to ensure the business as the whole to achieve the stellar performance.


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