Does your Performance Management System do the job its name implies or is it just for used for monitoring?

Many organizations now have a Performance Management tool they use to plan their business and manage the outcomes. But how effective are they and do they do the job?

imageTo answer that we must first look at that premise and how Performance Management tools should be used.

Isn’t a key aspect in using the transparency and predictive nature of a good Performance Management system in changing how we manage, and are we doing that?.

And isn’t the operative word in Performance Management, “management” and not just monitoring and is this a missing? .

The truth is many don’t work the way they were envisaged and become just a budgeting and monitoring tool .

Corrective change certainly does need monitoring tools but change for growth and sustainability is never achieved just using Performance Management to monitor. Planning and making strategic change to paradigms takes analysis and predictive modelling.

In Performance Management tools these functions are under-used as they take effort, thought and often interactive planning to use. Just using the business Intelligence functions to get history and the forecasting tools for budget level planning and monitoring will show the issues current paradigms. But that does not make decisions. That takes decision analysis and predicative effort too.

imageMaking decision is a continuous process of questioning what is and what is not and why. It may not only be about managing variances to plan.

By using a Performance Management tool for informed analysis of past decisions to then model predictions for ongoing decisions this helps to keep on top of the future and see the opportunities.

As a way of life the very nature of that processes changes too hence modelling must be creative to understand underperformance risks and make corrective and competitive decisions and or initial change.

Finance people as the traditional owners of Performance Management systems are well highly trained to be effective as the second chair leaders business. But if they are not well aligned to the frontline decision makers, they will not be effective to share in and contribute to the outcomes.

When the don’t the Performance Management tool becomes just use another IT tool for more efficient reporting and planning and will be even unlikely to take advantage of the monitoring tools.

Finance too have vested interest in managing the source of financial information to ensure it remains up to date and vital. Their involvement in the business as partner is equally vital to be sure the information is well used.

Just having a Performance Management tool to monitor the status quo will imagenot even work without Finance driving it.

They ensure the Management of business use it well to get the decision value the systems aims to deliver as they keep it current.

So it seems really just so simple to fix a Performance Management system.

Finance just need to take the lead and add the missing Management back into the mix so it will work?

In the jungle of business how does using a parking ticket advocate service equate to the law of comparative advantage?

Why would you pay perfectly good money for things you can do better yourself. If you are in business to answer honestly you must ask “Does a do it yourself (DIY) style take valuable time from your core schedule. 

One other downside you may need to consider is a do it yourself service has no direct reward. When you concentrate on your customers there is a direct and mutual exchange of benefit.  Giving yourself service gets a lower priority as the benefit is indirect. as no-one actually pays you for it. Just like the award winner builder who never gets his own house completed. Or like me as a past CFO and CPA, you would think I could do my own tax return. (I give that task to my CPA accountant)

 

It is not only about marginalizing unit costs but also related to the laws of comparative advantage.

 

For example why  would I trade my valuable time and not use a travel agent to book my travel tickets even though she tells me I can do it myself online much cheaper.  I say I prefer her service to mine. And when a simple thing like a parking infringement notice needs to be challenged, who best handled this?  You guessed -  a Larry type of specialist .

Call it old fashioned but it is about sticking to what we know and resisting the temptation to do non core things ourselves and limiting  our growth.  Then people like my travel agent can concentrate on me as her customers in the area she are is good so I can in turn concentrate on mine and we both grow.

Who needs the agro and distraction on doubtful on unfamiliar ground. Macro economic aside, at the touch level the benefit using and recognizing service advisors value is they handle things when motivated to give great service. That brings with it a commercial relationship icing on the cake that goes way beyond the straight service level. E.g by connecting other people it helps both our businesses.

That is a big bonus when you get it that  what goes around comes around sooner than later in the form referred benefits. My lawyer who I have invested in personally for my will, property settlements and lots of other commercial matters in my business life, know knows me intimately.   Hence he comes with the same benefits. He on the other hand is not a parking ticket specialist so I have no problem referring him to Larry to help his clients with that sort of skill. He likewise does the same by referring his clients and friends to me. Same with my Accountant and so it goes round.

So who is Larry you ask. Larry Berezin, a veteran retired New Jersey Lawyer, is now the Chief Operating Officer at New York Parking Ticket LLC I use his Organisation as an a case in point as he  makes that business look simple by sticking to the knitting. It also does very well because they understands these laws. Larry, like me, loves Guns and Roses Music