BPP Newsletter: September 2008
2009 Planning
Welcome to the quarterly ezine from Business Performance Perspectives Ltd. My aim is to keep you up to date with developments in business performance management and business etiquette. In this ezine I am focusing on business performance. With four months to year end many businesses are really concentrating on hitting strategic targets for 2008 as well as planning for 2009. Hopefully the content of this ezine will provide some food for thought in your strategic planning and implementation.
In this issue:
- Strategy to Action
- 2009 Planning
- Irish Business Manners Survey 2008
Strategy to Action:
At this point in the year many businesses are reviewing the first three quarters of 2008 and planning for the last quarter of the year.
If you are not hitting the targets that you set in January; one of the reasons might be your performance management (PM) system. Many businesses spend weeks preparing strategic plans but the failure arises in the execution of those plans.
According to Kaplan and Norton, the authors of the Balanced Scorecard 'Less than 10% of strategies effectively formulated are effectively executed' and 'in the majority of failures - we estimate in 70% of cases the real problem isn't bad strategy it is bad execution'. A 2004 report in the Economist magazine found that 57 percent of firms were unsuccessful at executing strategic initiatives over a three year period to 2004, according to their senior operating executives.
The failure to hit targets sometimes occurs because employees don't understand or are not aware of the company strategy. If your employees are not aware or are not accountable for strategic plans, how can they succeed?
If strategy implementation is of importance to you, it is worthwhile to take a few minutes to complete a performance management review. This diagnostic sets out the key elements of a performance management system. It allows you to rate where your business currently is for each element and where you would like to be.
This review will highlight for you the areas that are not working within your business at present. This is a very useful business tool for planning for 2009.
Please click here for the performance management diagnostic tool.
2009 Planning
PM can be broken down into two main activities, setting business goals and driving those goals into action.
There are many benefits of PM and the two that I believe that are of most importance are:
1. Results Focus:
A common misconception amongst managers is that behaviors and activities are the same as results. Sometimes an employee may appear extremely busy, but not be contributing at all toward the goals of the business. Every person working in a business needs to buy in to the goals of the business and know how they impact on those goals. Each employee should have a small number of key performance indicators that are linked to company strategy. These indicators should be monitored monthly to ensure early resolution of issues and the celebration of success.
2. Alignment:
PM identifies company goals, results needed to achieve those goals, measures of effectiveness or efficiency (outcomes) toward the goals, and means (drivers) to achieve the goals. PM ensures that everyone in the business is aligned to the achievement of company goals and clearly understands the activities needed to achieve those goals.
I have set out below a step by step process that I use when working with companies on performance management. I hope that it is of help in your 2009 planning process.
- Agree direction and top-line goals with the management team.
- Review of 2008 activities and outputs.
- Clarify the vision and strategy for 2009.
- Agree top leadership sponsorship for activities and buy in to all of the top-line goals.
- Agree key milestones and review dates for 2009.
- Translate strategy into operational terms
- Develop of the performance scorecard for the business.
- Share scorecard with management in the business to get buy-in and input.
- Clarify who in the business owns each strategic goal and KPIs.
- Align the company to the strategy
- All brand, sales and support functions aligned to the strategy.
- Motivate to make strategy everyone’s job
- Align personal goals and incentives to the performance scorecard.
- Monitor to make strategy an ongoing process
- Implement a monthly performance management process including meetings and reports.
- Implement a quarterly performance management process including meetings and a feed into ongoing strategic planning.
For more information on how we can support the development and implementation of your strategic plans please email Pamela@bpp.ie.
Irish Business Manners Survey 2008:
In October we will be undertaking our annual survey of Irish business manners. If there is an area of business etiquette that you would like to include in the survey, feel free to email your thoughts or comments to me at Pamela@bpp.ie.
Feedback
I would be delighted to receive your feedback on any aspect of this e-zine. Please email BPP on info@bpp.ie.