Experience shows me that business leaders today are almost constantly testing and expanding on their company’s strategies. However, in many cases I have seen, they do not question and rework their company’s performance measures with the same level of enthusiasm.
Performance measures monitor a company’s progress against budgets and their strategic business plan. It also communicates with all key stakeholders what really matters, including underpinning of rewards against account-abilities and authority levels.
When strategy and management techniques run ahead of performance measures, there could well be adverse trends which will ultimately affect growth and profit.
When disciplined performance measures are closely aligned with current business plan strategies and objectives, I have found that this will provide a great deal of how-to in a set of disciplines which are fundamental to successful change with world best practice outcomes.
Businesses that want to move ahead by undertaking broad-based change must include regular reviews of their measurement KPI’s if they are to realise improved performance as part of their continuous improvement culture.
A balanced set of measures facilitates changes occurring in a business simply because it covers all aspects of the business – people development, product development, marketing, sales, PR, manufacturing and key stakeholder satisfaction.
I have found that regular reviews of KPI’s is not an action that most businesses willingly undertake. It is quite often a reactive measure which only occurs through top management becoming dissatisfied with the pace of improvement. It is then not unusual for operational managers to rebel against measures that no longer make sense or in fact challenge their individual performances.
If a CEO elects not to adjust the KPI’s, he/she may ultimately make the necessary changes impossible to achieve.
Again, my experience has been that a business with a goal-focused KPI measurement strategy is best placed to institutionalise targeted changes in the management process which galvanises wide spread management action.