Corporate Performance Management is about managing and monitoring corporate performance via the well-defined set of performance indicators. Corporate performance management is not just about managing numbers with metrics, but the number with context. The various activities are needed to manage performance— strategic and operational plans, metrics, day-to-day decisions. So, Enterprise Performance Management is critical, because new competitive challenges and active market changes underscore the strategic imperative of managing performance more than ever. But what’s exactly corporate performance management regarding for, and what’s it related to other key components of corporate management such as strategic management, risk management, information management, decision management, or talent management? Enterprise Performance Management methods include strategy maps, scorecards, customer profitability analysis using activity-based costing principles, customer intelligence, driver-based budgeting / rolling financial forecasts, process management, and quality management. Enterprise Performance Management integrates them as a large umbrella.
The purpose of the book “Performance Master: Take a Holistic Approach to Unlock Digital Performance “is to provide an in-depth understanding and share unique insight about how to take a holistic approach to measure and managing enterprise digital performance. Without measurements, it can be hard to tell whether attempted improvements achieve the expected results or not. It's fair to say that any organization didn't have a systematic approach to performance assessment and measurement at both strategic and operational level has a giant blind spot that is impairing their performance. A well-designed performance management system is a necessary foundation for continuous improvement. So, the logical scenario to manage performance includes the following steps:
Make a fair assessment and get objective perspectives on what you are trying to manage. Understanding what’s blocking achievements, targets and performance are paramount.
Select the right set of indicators of organizational improvement, innovation, and investment, really focus on key metrics that correlate to better business outcomes and measure them effectively.
Connect the multidisciplinary management dots to tell the full story with the business context, as performance management is not an isolated management discipline.
Design management scoreboards to assess the business performance progress to strategic goals whereas build dashboards to assess the organizational performance to operational goals.
Act on what the performance indicators are telling you is vital to sustaining business results and improving the overall organizational maturity.
Chapter 1 Digital Performance Assessment: Making an objective assessment is the first step in performance management. Corporate Performance Management is a management control from the strategy till the shop floor. Managing performance means evaluating performance and understanding results, setting metrics, fixing plans, and making decisions to ensure it happens. This also means:
-Translating the business strategy into operational terms.
-Aligning the organization to create synergies.
-Making the strategy everyone’s everyday job and a continual process.
-Mobilizing change through executive leadership anticipation, monitoring results and act.
Chapter 2 Digital Performance Indicator: "If you can't measure, you can't manage," the legendary management guru Peter Drucker once asserted. He was right, just not right enough. The fact of the matter is that it's a lot easier to get metrics wrong than right, and the damage caused by getting them wrong usually exceeds the potential benefit of getting them right. Choosing the right KPIs is crucial. The challenge is that people have their own take on KPIs. KPIs must be aligned with the corporate goals and objectives, but should also be directly relevant to the activities that businesses are attempting to manage. Selecting the right measure and measuring it right are both art and science. KPIs influence management behavior as well as business culture, and poorly designed or implemented KPIs can be very damaging the "culture of the team" and the quality of business execution.
Chapter 3: Digital Performance Dots Connection: Enterprise Performance Management is an integration of multiple management disciplines and the development of a set of performance management practices. The business management is, in essence, strategy management and performance management continuum. Hyper-connectivity is one of the most critical digital characteristics. It is important to connect the dots between performance management and other management disciplines, to understand that digital business development & transformation is the paradigm shift which takes a multidisciplinary approach. In modern socially responsible companies, it isn't just about WHAT (performance result) you have achieved, but also about WHY (the strategic vision) and HOW (the decision-action scenario), you have achieved it.
Chapter 4 Digital Performance Scoreboard and Dashboard: The balanced scorecard is the balanced scorecard model offers a way for a corporation to gain a wider perspective on its strategic decisions by considering the impact on finances, customers, internal processes and employee satisfaction. A business dashboard is "an easy to read, often single page, real-time user interface, showing a graphical presentation of the current status (snapshot) and historical trends of an organization’s key performance indicators to enable instantaneous and informed decisions to be made at a glance.
Chapter 5 Digital Performance Management Maturity: Digital businesses become overwhelmingly complex to run, different organizations take different approaches to pursue high-performance results. Enterprise Performance Management is more as decision management. Enterprise Performance Management is the integration of multiple methods to make better decisions and implement the strategy seamlessly. The company’s performance is directly related to the decisions people make every day—from executives to the frontline, across functional areas and regions. Performance management facilitates the flow of the right information to the right people at the right time to get answers to the right questions, to help and coordinate your strategy, tactics, and risks.
Metaphorically, Enterprise Performance Management (EPM) is the tree, Strategic/ Operations/Risk Management are the main branches: Strategic Management, Operations Management, Risk Management are all part of good EPM, in essence. A company benefits most when it executes Enterprise Performance Management (EPM) and Enterprise Risk Management (ERM) in a complementary fashion, as two elements are both critical for achieving the vision and mission of the company. Under EPM the management looks at what one wants to take place. The management team translates the company vision and mission into a strategy with objectives; then translates the strategy into operational plans to achieve the strategic objectives; then executes these plans and monitors actual performance, with the classic PDCA cycle (plan-do-check-act). Under Enterprise Risk Management (ERM), the management then looks at the things one essentially does not want to happen. The things that would prevent the execution of the strategy or operational plans from achieving the stated aims or that would even make the strategy and operational plans completely obsolete.
Metaphorically, if the enterprise is a vehicle, Enterprise Performance Management is like the gas pedal with speed scoreboard: Enterprise Risk Management is like brake, and governance is like a steering wheel, to keep the business in the right direction; while ‘EPM's "strategy map" component could be the GPS for direction setting. The motor might be the organization's assets and capacity (including its workforce). Predictive analytics might be what is seen through the windshield. The purpose of all such management disciplines and practices is to ensure the enterprise vehicle running at an optimal speed in the right direction.
Enterprise Performance Management is a multidisciplinary management discipline to run numbers in context, leverage data to tell stories, and get results related to business goals, and keep the business digital fit for the long term.
