Enabling a High-Performance Organization
What does it take to achieve a performance culture that drives growth and profitability? We explore the key characteristics an enterprise needs for success.
by Adrian Sakundiak
Managing and improving overall corporate performance can be challenging at the best of times. In a recessionary economy, this can prove to be an insurmountable task. Revenue may be flat or shrinking and your cost structure may be increasing. This results in pressure on your bottom line and on profitability. As a key business leader, you must instil a culture of high performance and take action now! Business Intelligence is the technology enabler to support improved corporate performance. With clear sightlines to trends, history, and patterns of performance, you will be more confident making key business decisions and organizational changes.
There are several key characteristics of a "performance culture." First, organizations focused on performance understand and treat information as an asset and believe that sharing this valuable information throughout the organization within reason can be a competitive advantage. We sometimes find one or two employees in the organization who are the "information hoarders," those that lock down key corporate data on their laptops, acting as gatekeepers to that data. Transparency and open communication foster the development of new ideas to improve performance.
For example, thoughtful analysis might spot a trend in historical data that could predict a negative future performance when there is time for a course correction. In addition, when information is considered a corporate asset, executives throughout the organization find they can spend more time discussing and analyzing what matters most to their business -- those key indicators that truly drive performance -- because information is treated as a corporate asset and shared accordingly to execute a business strategy.
A second characteristic of a performance culture is accountability. High performance cannot be enabled unless every team member within an organization has a level of personal accountability for achieving the results. A results-based company clearly identifies and communicates key company targets, goals and strategic priorities and holds every worker accountable to achieve these targets. Access to timely, accurate, and trusted information will drive accountability -- there will be nowhere to hide with timely information enabled through a business intelligence environment.
Alignment is the third characteristic of a high performing organization. Both vertically from top executives to front-line staff and horizontally between business units/divisions, all employees must be aligned to executing corporate strategy. Strategy maps are sometimes used to provide a macro view of the performance, aligning company objectives with the strategic planning process. You cannot manage what you cannot measure. The best practice alignment strategy starts at the top with the mission of the company and its related strategic objectives. Once the key performance indicators have been identified and prioritized, they cascade throughout the organization. For example, the president/CEO may focus on five key metrics that drives overall corporate performance and to which he/she is responsible to shareholders or the Board of Directors.
Each vice president will be responsible for metrics that align with and support the CEO's key indicators. As these key indicators trickle down, directors, managers, and front-line staff all have responsibility for their own metrics. A high-performing organization ensures alignment of these key indicators both vertically and horizontally throughout the organization to ensure laser-like focus on executing strategy.
In the absence of any (or complete) information, decisions are often based on gut feel, rule of thumb, intuition, or experience. Although companies need to leverage their experienced management team, they should balance experienced-based decision-making with a more structured and proven approach to evidence-based decision making. This may include understanding customer satisfaction, customer profitability (which customers to fire), customer retention all sliced and diced by time, location, customer type, contract, type of service/product, and so on. A good decision may be defined as one that moves an organization closer to achieving its corporate goals and objectives; measuring this progress toward the goal is key.
Business intelligence provides the speed, confidence, and agility to improve corporate decision making. With business intelligence, each user has the means to see how their decisions and actions impact overall company profitability, and have the ability to monitor the execution of stated strategic priorities through a scorecard which can measure actual performance to target and can display trends based on history. A scorecard helps "manage" performance, showing progress towards strategies, goals, and objectives by using key performance indicators. A dashboard helps "monitor" performance, consolidating and arranging measurements and sometimes scorecards on a single screen so key information can be monitored at a glance.
Dashboards may also include key reports that have drill-down capability to analyze detailed performance and highlighting needed course-corrections, all in a timely and trusted manner aligned to strategy. In addition to directly impacting costs, revenue, and ROI, an improved decision-making framework will reduce the risk of key knowledge or information leaving the organization through employee turnover. Routine or recurring management decisions can be improved by using Business Intelligence in ways that capitalize on the availability of information and the ability for repeatable decision processes where appropriate. Giving staff the means to make better decisions will result in an agile organization focused on driving improved performance.
Many organizations realize too late that their performance is suffering and that they will miss targets set and agreed to at the start of the year. Weeks after quarter-end or even worse, weeks after fiscal year-end, executives are trying to figure where things went wrong and why. Sometimes they never know the answer. A performance management culture eliminates the guessing and provides timely access to trusted information, all enabled through business intelligence. Proactive organizations recognize the need to solve business pain early before it results in negative performance. Some of this business pain may include:
- The need for a single version of truth data
- Desire to have an empowered and engaged workforce
- The desire to achieve operational excellence and process efficiency
- Need for integration and standardization of information, perhaps as a result of acquisition or organic growth
- Lack of evidence-based decision making (too many decisions made by "gut feel")
- IT may not be adequately meeting the information needs of the business
- A need to reduce the manual effort in data gathering/report preparation
- The need to respond faster to new business opportunities
- Lack of visibility into both leading and lagging performance indicators
- Need for common definitions, calculations, and business meaning for key metrics
Diagnosing your performance management capabilities begins with a business intelligence strategy. This includes assessing organizational readiness and maturity for business intelligence, an understanding of the current state decision making framework and data environment, identifying the ideal future state, best practice recommendations, and a road map to begin the journey to improved performance.
Summary
To achieve a performance culture that drives growth and profitability, organizations must treat data as an information asset, ensure that every employee is results-driven and held accountable for actions and decisions, have a clear, laser-like focus and alignment both vertically and horizontally throughout the organization, and use a decision-making framework that balances experience and intuition with evidence/data as part of the organizational DNA. Only then will a culture of performance management change the behaviour in ways that deliver improved results to your organization and a competitive advantage.
Adrian Sakundiak is a professional management consultant for Online Business Systems (http://www.obsglobal.com), and has worked at the CEO, CFO, and vice president levels in addition to serving as a board member. He holds an MBA and undergraduate degrees in economics and health administration. You can contact the author at [email protected]