PERFORMANCE Management: Leveraging competitive advantage

Most of the organizations believe in lateral thinking and take every possible measure that can give them competitive advantage. A market where stringent regulatory rules, changing market scenario, technology upgradation, investor pressures exists, there is a need to revamp the strategy and keep on improving the processes critical to the organization. Performance Management answers all the questions, which seem critical for the success of an organization.

It starts with strategy formulation keeping the corporate mission, vision and objectives in mind. The roadmap is clearly set and targets are set for each objective. The drivers accelerating the growth of an organization and those hampering the growth are defined. Measures are taken for each objective. The topics covered below like Scenario Planning, Risk Management are taken care of in the first step of Performance Management.

Once the objectives are defined and measures are taken, its important to communicate the same with the key people in the organization. The business units of the organization are made aware of these objective and the BU Head of each business unit sets operational plan for achieving these objectives. Key strategic initiatives and allocation of effective people lay to the foundation of successful implementation of the operational plan. Key performance indicators are set for each objective.

Once the operational plan is in process, it is essential to monitor the progress and chart the improvement in the processes. Performance gaps are analyzed and measures are taken to fill the gaps and achieve the best fitting the corporate objectives. A macro view of the organization helps in deciding the appropriate plan of action.

Last but not the least, feedback is necessary for a successful performance management plan. The success and failures achieved in the whole cycle of performance management should be documented and communicated across the organization so that the learning occurs and opinions could be taken for improvement of the processes.

An effective tool to measure Performance Management is Kaplan and Norton’s Balanced Score Card, which takes four perspectives into consideration critical to the organization keeping the objectives in mind.

a.Learning and Growth perspective
b.Business process perspective
c.Customer perspective
d.Financial perspective