Brand Website Framework
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Monday, August 2, 2010
Friday, April 16, 2010
Tuesday, April 13, 2010
Friday, February 5, 2010
Wednesday, April 29, 2009
Business Process Reengineering - Sample BRP Metrics for a Typical Manufacturer
I got bumped into this very useful framework.....worth having a look..
Sunday, April 5, 2009
What you cannot measure you cannot manage!
Heard the above yes? I bet you have. Question is – has an effective performance management system been implemented in your business? If the answer to this question is a negative one, then you would know what would be one of the top priorities should be. Without a doubt, it would be - implementing an intelligent performance management system in place that supports the organization's overall strategy, which provides management at all levels the decision support information.
Some common executive comments even in such economic conditions include...
• “Our leadership team does not agree or buy in to our key priorities.”
• “We are a collection of silos that do not collaborate.”
• “Recognition and rewards are not based on driving the change we need.”
• “We spend too much time and effort creating plans instead of getting value from the planning process”
• “Our data is of poor quality and we have disparate systems to report on performance.”
• “We do not know if our strategy is working until it is too late.”
Generally all organizations would have some decision support system and strategy implementation system in place. Some may have very sophisticated system in place, a few may have bare bones of it and many would fall in-between. If you have a working performance management and strategy implementation system in place that not only provides critical decision support information to the management but also plays a part in enhancing performance and productivity at all levels on an ongoing basis, then you may stop reading and wait till you receive the next instalment of actionable strategies to increase the performance and productivity.
So what is the suggestion here? Implement Balanced Scorecards. There is no other management system as effective and proven to convert strategy into action.
Let us look at the concept very briefly here.
Balanced Scorecards would help in
Aligning corporate strategy with daily operations
Making informed business decisions via defined reporting and analysis, to corporate best practices
Achieving the vision by building motivation
Bringing innovation / new product development
Adapting to changing technologies and markets
Attracting and retain talented people
Building a sustainable and progressive organization
What is Balanced Scorecards then? Kaplan and Norton started publicising the concept in early 90s and many of the largest companies in the world have adopted it as their core component of strategy implementation and performance management system in all industry segments.
The system uses four key perspectives and they are....
Customer – How will customer judge our products and services?
Financial –How do we create value for the business owners?
Internal Business Processes – How do we improve processes to improve quality, timeliness, functionally and profitability?
Learning & Growth – How to continually get smarter, innovative and improve?
For each of the above four perspectives, the suggested cycle of steps would be as follows.
1. Set Objectives
2. Decide Measurements
3. Set Targets for those measurements
4. Set Initiatives for those targets
5. Allocate Budgets for those initiatives
6. Make action plans to execute the initiatives
7. Link remuneration Incentives to the success of the initiatives.
8. Success is measured of those initiatives and based on the feedback, the strategies are refined.
9. Review of the strategies and realign the initiatives if needed
The implementation of balanced scorecards could be done either in stages i.e. implementation of group level scorecards first and then business unit/divisional level scorecards or it can be implemented at all levels in one go. However until the system in implemented at all levels, the desired outcomes would not be achieved.
Typical implementation could include usage of dashboards to monitor the ongoing performance and communicate the results.
The idea here is not to divulge into going deeper in the subject matter of Balanced Scorecards and I would be focusing on balanced scorecards separately to depict the implementation methodology and how to avoid typical pitfalls and errors for successful outcomes.
It is a substantial commitment, efforts and resources at all levels and especially at the executive level to get the Balanced Scorecards implemented, however in current economic conditions, it is imperative that an effective, collaborative and robust performance management and strategy implementation system in place, that can deliver ongoing improvements, improve return on investment and provide sustainable benefits.
Some common executive comments even in such economic conditions include...
• “Our leadership team does not agree or buy in to our key priorities.”
• “We are a collection of silos that do not collaborate.”
• “Recognition and rewards are not based on driving the change we need.”
• “We spend too much time and effort creating plans instead of getting value from the planning process”
• “Our data is of poor quality and we have disparate systems to report on performance.”
• “We do not know if our strategy is working until it is too late.”
Generally all organizations would have some decision support system and strategy implementation system in place. Some may have very sophisticated system in place, a few may have bare bones of it and many would fall in-between. If you have a working performance management and strategy implementation system in place that not only provides critical decision support information to the management but also plays a part in enhancing performance and productivity at all levels on an ongoing basis, then you may stop reading and wait till you receive the next instalment of actionable strategies to increase the performance and productivity.
So what is the suggestion here? Implement Balanced Scorecards. There is no other management system as effective and proven to convert strategy into action.
Let us look at the concept very briefly here.
Balanced Scorecards would help in
Aligning corporate strategy with daily operations
Making informed business decisions via defined reporting and analysis, to corporate best practices
Achieving the vision by building motivation
Bringing innovation / new product development
Adapting to changing technologies and markets
Attracting and retain talented people
Building a sustainable and progressive organization
What is Balanced Scorecards then? Kaplan and Norton started publicising the concept in early 90s and many of the largest companies in the world have adopted it as their core component of strategy implementation and performance management system in all industry segments.
The system uses four key perspectives and they are....
Customer – How will customer judge our products and services?
Financial –How do we create value for the business owners?
Internal Business Processes – How do we improve processes to improve quality, timeliness, functionally and profitability?
Learning & Growth – How to continually get smarter, innovative and improve?
For each of the above four perspectives, the suggested cycle of steps would be as follows.
1. Set Objectives
2. Decide Measurements
3. Set Targets for those measurements
4. Set Initiatives for those targets
5. Allocate Budgets for those initiatives
6. Make action plans to execute the initiatives
7. Link remuneration Incentives to the success of the initiatives.
8. Success is measured of those initiatives and based on the feedback, the strategies are refined.
9. Review of the strategies and realign the initiatives if needed
The implementation of balanced scorecards could be done either in stages i.e. implementation of group level scorecards first and then business unit/divisional level scorecards or it can be implemented at all levels in one go. However until the system in implemented at all levels, the desired outcomes would not be achieved.
Typical implementation could include usage of dashboards to monitor the ongoing performance and communicate the results.
The idea here is not to divulge into going deeper in the subject matter of Balanced Scorecards and I would be focusing on balanced scorecards separately to depict the implementation methodology and how to avoid typical pitfalls and errors for successful outcomes.
It is a substantial commitment, efforts and resources at all levels and especially at the executive level to get the Balanced Scorecards implemented, however in current economic conditions, it is imperative that an effective, collaborative and robust performance management and strategy implementation system in place, that can deliver ongoing improvements, improve return on investment and provide sustainable benefits.
Sunday, November 30, 2008
Managing in the current economic climate
Most CFOs and CEOs would face the challenge of managing their organisation ‘successfully’ in the current economic climate.
It is not always easy and/or feasible to take especially the second approach when/if the top level jobs are on the line and the shareholders and financiers are unable to work with the management very well. However, when feasible, the second approach may be worth considering.
At the same time, there can also be a hybrid approach of the first and second approaches and that may be well suited for some organisations........
In the coming weeks, I would be tackling some of the measures the C level executives can adopt to take on the challenge of managing in the current economic climate.
‘The times are tough, meeting the covenants and agreed KPIs with banks are incresingly difficult and we are facing the cash-flow crunch’ is the most common feedback from CFOs and treasurers. CEOs are faced with questions about return on equity and value to the shareholders.
There are many approaches businesses take to manage such situations. There are two popular schools of thoughts or approaches with the CFOs and CEOs. One of them is ‘to cut costs’. In most cases, the largest cost an organisation incurs as far as the operating costs are concerned; is the personnel costs (typically between 45% to 92% depending on the industry, size and nature of the business). For businesses, this approach would mean, cutting the costs till they can, gaining a short term handle on the profitability measures through spending less on personnel costs (along with other measures) and then once the situation seems to be in control, start recruiting again.
Another approach that is employed is – ‘to increase productivity’. The approach would be to remain in a ‘hold’ position for most of the personnel costs, change to the top gear to increase the productivity ‘dramatically’, be honest with the banks, financiers and shareholders, have an effective cash-flow management plan in place and ride the storm. Not only that but be proactive, have a strategy in place to effectively continue generating higher profits and execute it with discipline.
Well which one is better? The answer is – it depends! It would depends on the state a particular business is in, depending on the stakeholders of the businesses,, it depends on how long the economic environment remains in a particular state, how good the management or the company can plan and execute strategies...and so forth and so on.
It is not always easy and/or feasible to take especially the second approach when/if the top level jobs are on the line and the shareholders and financiers are unable to work with the management very well. However, when feasible, the second approach may be worth considering.
Bringing innovative solutions to business problems, including the top line retention and/or growth, effective management of cash (remember, cash is the king!), better margin/pricing management, usage of technology to ramp up productivity where possible.... are some of the key steps under the second approach. When up-to 92 percent of business cost is labour, then even the marginal improvements in the labour productivity in the right areas can have a reasonable impact on the bottom line with it’s flow on effect on cash.
At the same time, there can also be a hybrid approach of the first and second approaches and that may be well suited for some organisations........
In the coming weeks, I would be tackling some of the measures the C level executives can adopt to take on the challenge of managing in the current economic climate.
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