Between the King commissions and new legal requirements corporations are expected to comply with, it has never been harder or more stressful to be a corporate leader.
Not only does today`s executive team need to define the company`s vision and drive the business to achieve its goals, they also need to ensure the rest of the organisation has aligned itself to their goals and is working in unison to achieve them.
CPM requires the human touch, specifically the constant touch of people in management positions.
David McWilliam, MD, Cognos South Africa
The traditional way of doing this was via endless reams of reports from various departments and managers detailing progress in financial and other stated goals. As technology started playing a more vital role in business, managers were able to gain access to these reports electronically, or even via a dashboard interface on their desktops or laptops.
Unfortunately, access to information in electronic format may be more convenient, but it does not make sifting the dross from the nuggets of valuable information any easier. Data overload also does not make for good decision-making.
More recently, a new methodology to assist in managing the performance of corporations has evolved. Gartner has termed it corporate performance management (CPM). CPM is an umbrella term that describes the methodologies, metrics, processes and systems used to monitor and manage an enterprise`s business performance.
Put another way, Peter F Drucker, in an article titled The Coming of the New Organisation, said: "Executives and professional specialists need to think through what information is for them, what data they need: first, to know what they are doing; then, to be able to decide what they should be doing; and finally, to appraise how well they are doing."
Knowing what you should be doing, what you are doing and how well you are doing is the basic premise behind CPM and many companies have made software available to support these aims. In the real world, however, no CEO can simply order the implementation of CPM software and sit back while the application runs the company.
CPM requires the human touch, specifically the constant touch of people in management positions. In other words, management commitment to the purposes, ideals and objectives of CPM is the basis for successfully running a company.
But what does commitment mean in this circumstance? It not only means authorising the CPM project and its budget, but active involvement - read accountability - for the project as a whole. The first step in this process is defining where the company wants to go and what it needs to achieve to get there - something management has to drive.
Devilish detail
As happens for most corporate projects, the devil is in the detail. If the initial planning is a half-hearted attempt by a subordinate tasked with the job, the results will be failure and a substantial amount of money spent on software that`s useless (because nobody uses it) and a company that is in danger of going nowhere.
And one should always remember that CPM is a cycle; the main lessons a company learns in the planning, design, implementation and reporting phases is that it needs to go back to the beginning and apply this knowledge in the next round to further improve business processes and performance.
The more senior the position of the executive, the more important it is that he or she should be thinking about the company`s performance over the next month, quarter and year to ensure it is able to adapt to any market changes and challenges. A senior staff member in this position should not have to sift through last month`s data trying to figure out what went wrong.
CPM, as a process, provides the mechanisms for business leaders to translate their vision into definable goals without requiring them to forgo their strategic tasks in favour of non-value-adding work.
With software as an enabler, CPM assists in measurably improving the performance of the business in areas its leaders have identified. But it can only do so when these leaders have bought into and made themselves part of the process - in other words, once they have made themselves accountable for critical elements of the CPM project rather than merely delegating it to someone that does not carry the authority to make things happen.
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