One of the requirements necessary for the successful improvement of business performance is good strategy development and execution.
Business leaders and managers alike must learn from one of the famous Japanese proverb.
Strategy without execution is a daydream, execution without strategy is a nightmare.
In order to create value, drive growth and strengthen the company, management must make use of performance management tools that promote aligned execution toward common goals.
It is important that management to engage in discussions that establish successful ways of using tools such as the Balanced Scorecard, Strategy Maps, KPIs, Dashboards Business Intelligence and Business Analytics to improve performance and drive change throughout the organization.
An important point to note as well is that these tools must not be used in isolation. They must be integrated with the company’s enterprise risk management strategies if it is to successfully execute its strategies.
Today’s volatile and competitive business environment requires leaders to move beyond the numbers when they make strategic decisions.
They need to know what is happening across the organization, how, why and what will happen.
Getting this additional context about the qualitative information and the ability to see more detailed explanations is not always part and parcel of financial accounting, hence the need for management to start investing more in management accounting techniques as well as engaging in conversation with the various organizational stakeholders.
To obtain the full story of what is happening across the organization, management must make use of cascading and aligned scorecards and their use must start from the top if buy-in is to happen throughout the organization.
Adoption can either make or break an organization’s performance management initiative. If there is no people buy-in it becomes difficult to get them to start managing their performance.
It is therefore important for leaders to possess the abilities, skills and personalities necessary to drive adoption and buy-in and in turn create a culture of performance.
One way of creating this culture of performance involves developing training programs aimed at driving performance management capabilities across the organization.
Employees must know the true meaning of business performance management, how to manage it, how to build their own scorecards, how it is communicated and the impact of their performance on organizational objectives.
When new employees join the organization, they also must go through the same performance management training as existing employees.
Understanding of what is happening across the organization through the use of cascaded and aligned scorecards helps improve and increase performance visibility because managers will now have access to better numbers, information and explanations that can be trusted for better decision making processes.
This access to information reduces the management team’s reliance on gut feel when they make key strategic decisions.
As the volume, variety, velocity and veracity of data affecting the organization’s operations and bottom line continue to increase each day, it is important that managers move beyond gut feel.
They need to move to a fact-based and data-driven culture where facts are held in high regard.
Moving to this fact-based and data-driven culture requires management making a decision to invest in business intelligence and analytics tools.
These tools help understand what has happened, how, why and what will happen in the future. By knowing what will happen in the future, management will become proactive and successfully execute on organizational strategies.
Basing decisions on reliable facts enhances their planning and forecasting capabilities because they are able to understand why fluctuations exist and how best to deal with them.
Successful execution rests on the management team’s ability to develop good strategies and communicate them across the organization.
This is where Strategy Maps come handy. They help create visibility into operations, align goals and develop a clear line of sight from the top to the bottom and vice versa.
When employees understand the corporate strategy, their responsibilities and how they can actively manage their performance, the focus on intelligent execution will become part of their culture.
Improving business performance and driving change throughout the organization should not be done hastily.
Instead, management must take some baby steps and focus on those few metrics and initiatives that are critical for the organization to succeed.