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?
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.
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.
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?