Drive Compensation This would seem to be self-evident, basing managerial rewards on results, but only 25% of managers in global companies have rewards linked to strategies. Part of the issue is not knowing how to measure for success beyond limited financial measures, and part of it is a reluctance at the senior management level to judge each other lest they be judged.
Measure Process and Outcome
If all you do is measure output, then by the time you see that something is wrong it is too late to fix it. The damage is already done.
If you were measuring process along with product, then you would be able to spot the deviation in the process chain and repair it before it impacts output. Nor should you merely measure the process at random times and places. Instead measure the process all along, from requirement until the resource need is fulfilled. Another example of measuring process is a threat from a competitor.
If you are only measuring the success of a product in the marketplace, you will be caught by surprise when a competitor eats your lunch. And the surprise turns even worse when you realize your competitor is using your own intellectual property against you.
If you had measured the competitive landscape all along you would have gotten clues that a competing product was in the works and you could have moved to prevent or mitigate the threat. Measure the entire process from defining the threat to your ongoing responses and theirs.
To manage performance successfully, you must quantify how well the activities within a process perform. In future columns, we’ll outline additional Corporate Performance Management topics, including: why proper CPM is so rarely done well, and critical factors to think about when setting up your CPM system.
Roberto Goldammer is chief client officer and regional managing director for Neoris. He is responsible for managing global sales and delivery processes, ensuring consistency in execution and a positive return on investment (ROI) for clients across diverse cultures and business environments.