During these times of increased economic turbulence, performance management plays a predominant role in a company’s efforts to analyze results critically and, as a consequence, to achieve improved performance.
Ensuring the continual improvement of economic, financial, operational, customer-satisfaction and market results, regarding suppliers of products/services, the wider society, and employees, via the development of management best practices, is crucial and has proven to be one of the biggest challenges for companies, regardless of size, industry or even time in the market.
The real challenge — more than standardizing processes or centralizing data in sophisticated, integrated management systems — is to internalize within company culture (the beliefs and values shared by the members of the company) the practice of utilizing captured data to benefit the business and transform information into knowledge, i.e., business intelligence.
Therefore, metrics are needed to determine what and how to measure. These metrics will include KPIs, or Key Performance Indicators.
These carefully crafted indicators will support “critical performance meetings.” It is recommended that the company conduct monthly meetings, lasting approximately four hours, to analyze results, identify trends, and try to identify performance-improving actions.
Ideally, the monitoring of overall company performance, at least from a strategic point of view, will be conducted with no more than 36 indicators.
Constant monitoring of improved performance across multiple performance management cycles will turn a results-oriented organization into one that, guided by results specifications, robustly integrates its business systems.
It is critical to ensure that none of the aforementioned categories of results is excluded from measurements.
In this way you will guarantee the complete management of the company’s overall results.
Of course, in order to determine whether a result is in line with business goals, it will be essential to compare it with previously established goals.
In case you are wondering how to set goals… that is subject of the upcoming “Management Tips.”