Strategic Performance Management: Tools to Improve Organisational Performance

Leading companies know the importance of aligning their resources (such as people and processes) to strategic goals. They deliver greater value to their companies and its stakeholders by utilising their resources efficiently. To properly manage value, both outcomes and costs must be measured at the customer, client or product level – the level at which the organization chooses to measure its success. The biggest problem in managing organisational performance today is not in how the organisational performance is managed, but in how it is measured; most organisations are measuring the wrong things, the wrong way. It’s an undisputed premise of management that what cannot be measured cannot be managed or improved. Increased costs of delivering products and services to customers often result because of a lack of understanding of how much it really costs to deliver such products or services. In order to gain sustainable competitive advantage in any industry, whether it be Financial Services or in Telco’s or Oil and Gas, all organizations must take a critical look at how they are utilizing resources in delivering value to their stakeholders. Strategic Performance Management explores the vital link connecting strategic goals into performance targets that can be measured and managed. The course will teach you how to create a competitive organization, minimize operational risk and build a framework for performance management and control systems. The core tools that are covered aim to deliver on the theory and practice of Activity Based Management (ABM), Activity Based Costing (ABC) and Balanced Score Card (BSC) through short cases, and real-life stories. Practical guidance will be given in how to: Create a balanced scorecard for your organisation Make the most effective choices for your organisation that drive strategy and performance Minimise operational risk for an organisation Encourage innovation sensibly in an organisation Who should attend? This course has been designed specifically for CFO’s, COOs and CSO’s to who are responsible for designing systems that measure and improve performance, providing an opportunity for participants to update their knowledge and to deliver the most effective strategic support for their organisation. CFO’s Heads of Finance Chief Operating Officer’s Chief Strategy Officers Financial Controllers General Managers Business Process Engineers/ Managers/Directors
Day 1 What to measure, strategic priorities for any organisation, and BSC as a tool to map out the right things to measure from a financial, process, customer and employee perspectives Focus on those elusive non-financial measures of success which out rank some of the most obvious financial indicators Introduce the key performance indicators that are commonly tracked for major organisations in the relevant sectors represented by the class, and involve class in the discussion on why and how they are important to measure, and manage Introduce and discuss best practices in reporting the key performance indicators, and involve the class in the discussion on what and how are implemented in their organisations Introduce emerging practices in this area: strategic dash boards and the 360 degree view of what’s important - the right measures for strategic success, and have each participant map out theirs! Conclude: in order to gain sustainable competitive advantage, organisations must take a critical look at how they are utilising resources in delivering value to their stakeholders Day 2 How to measure, how are resources deployed, utilised and outcomes measured, and are resources allocated based on a strategic outcomes or priorities? Focus on resource allocation practices such strategic planning and Budgeting to identify methods such as Zero Based Budgeting (ZBB) and Activity Based Budgeting (ABB) to eliminate those initiatives and activities that are on the fringes of the core organisational priorities Introduce and discuss ZBB and ABB techniques for optimally allocating resources to strategic priorities and involve the class in the discussion on their practices, and how they can be modified Introduce measures for resources - time and costs – resource drivers and activity drivers of objects or priorities that necessitate or demand (!) time and money Introduce and discuss Activity Based Management and ABC method with examples drawn from the relevant sectors represented in class Demonstrate how ABC saves time and money, and allows a focus on value adding activities of the firm, and involve the class in the discussion on identifying drivers of time and costs in their setting Introduce and discuss emerging practices such as time driven ABC Conclude: the products or services that make demands on resources should be assigned costs precisely based on usage of resources, rather than on some arbitrary basis, which is the root cause of the poorly designed costing systems to measure success of strategic outcomes Day 3 How to manage strategic success, and how cost efficiencies translate to profits and measures of success, both quantitative and qualitative Case study: illustration of how BSC, ABM and ABC together work in real, business settings, and invite the class to debate and discuss the ideas, merits and demerits of the case, and explore limitations in practice. (An HBR Case or an Ivy League Case) Illustrate and discuss with class how ABC driven systems eliminate waste, inefficiencies and redundancies and enable a focus on delivering value. Discuss measures of value Introduce and discuss how ABC when implemented right influences strategy – demonstrate with mini case examples drawn from instructor’s own experience and others, how profit margins and therefore pricing, and marketing strategies associated with products or services change Illustrate how organisations of similar size and complexity to the class representation utilise these tools for effective strategic performance management Conclude: BSC, ABM together with ABC, which focuses on measuring things the ‘right way’, organisations can benefit immensely from measuring the ‘right things’, the ‘right way’