Under performance

Senior managers now appear to appreciate that if they are to achieve their strategic plans, they should adopt a more balanced approach to measuring performance by considering financial and non-financial performance measures. Considerable attention is presently being given by a number of so-called leading edge companies to developing a more comprehensive and integrated set of criteria for judging and guiding corporate and segmental performance, largely prompted by Kaplan & Norton’s concept of the Balanced Scorecard.

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While in-house development of performance management systems has worked for some companies often it is far better to seek external advise as a means of introducing best practice adopted in other companies and to benefit from the wide experience of external advisors. In the UK a number of consultancy firms offer such a service, however, some consultancy firms wish to sell an off the shelf solution which may lead to disastrous consequences.

An alternative to using consultancy firms is to seek advise from genuinely independent institutions, such as The Centre for Director Education, based at Leeds Business School which has extensive experience in guiding managers through complex performance management issues and offers robust solutions to business under-performance.

Interest

Interest among directors and managers in performance management as a tool for delivering strategic objectives is well-established in the management literature. However, this interest has been heightened in recent years by several factors.

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First, the rise of the Total Quality Management movement drew the attention of managers to the importance of focusing on the customer and to providing quality products and services as a means of maintaining competitive advantage.

Second, Johnson & Kaplan’s work on the alleged failings of conventional management accounting drew attention to over-dependence on financial numbers by managers schooled in the Dupont and similar systems. Many commentators have argued that the traditional financial and accounting measures, reputedly used by a large number of companies, provide an inadequate and insensitive tool for decision making as they were developed for regulatory and financial reporting requirements rather than to run businesses. Moreover these measures are designed to report on the stewardship of the money entrusted to management rather than on the strategic direction of the business.

The Route to Business Excellence

You have defined your vision of Business Excellence – the products and services to be provided, the service levels to support them, the appropriate organisation and skills, the benefits to be realised, the financial results to be achieved – and now you need to bring it to fruition.

At Campion Willcocks we have been helping our clients meet the challenges of change for more than three decades. As expertly managing change becomes more and more the determining factor for success in achieving business excellence, many organisations are seeking to understand and acquire the requisite skills and experience.

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Our expertise in managing change has evolved from our vast experience in project management. Not construction projects with physical components and visible structures where fit is obvious and progress tangible. We specialise in projects encompassing mergers and integration, organisational development, culture change, service improvement, process re-engineering and systems implementation. It is possible to bring project management disciplines to these environments, combining both ‘hard’ and ‘soft’ skills to achieve results. While no brief article can do this topic justice, we have distilled a few pointers and highlighted some issues from our involvement in hundreds of projects:

Planning and managing the plan
Managing risks and issues
Monitoring dependencies and resolving contention
Including the human aspects
Maintaining the business case and benefits
Roles and responsibilities
In-house vs outsourcing
There are strong elements of common sense about much of this. It is the ability to combine it with methods, tools and the experience to plan, manage and motivate that make for excellence in project management.

Our mission is to ensure the success of your business change initiatives or the projects you have undertaken for your clients, making the achievement of your business excellence goals more certain.

Management

Malcolm Wheatley’s advice for project managers is no less pointed and makes disturbing reading for anyone who thinks that incompetence and mismanagement is the sole preserve of the public sector. He describes six phases. “At first, the project starts well, with Enthusiasm. Then follows Panic, as the magnitude of the task dawns. Then there’s Disillusionment, as the inevitable hard work and doubt take their toll. Then, the fourth stage:

Success Against All The Odds. This is followed by the fifth stage, The Search for the Guilty, with the process being completed by the sixth and final stage – The Casting of Glory on the Uninvolved.”

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David Lawson a facilities management expert and contributor to Property Week reckons that a key to business excellence lies with your unseen allies – the army of service contractors who look after your buildings. FM, he says, “is the glue that holds businesses together and like any good adhesive it should be invisible. But FM has become far more obvious in the last decade. It jumped to prominence in the recession as companies sought to cut costs and even when profits returned, increased competition, high interest rates and a strong pound have forced further appraisal.

“This May, Business Excellence is bigger than ever, reflecting a wealth of feedback from CBI member companies, a strong body of advice from business analysts, consultants and business schools. And, of course, we have continued to attract contributions from popular and highly-regarded business journalists.

Process

The people part of the equation is as important as processes. Leadership is a vital issue but no less important is communicating the vision throughout the company. The difference between a strategic and an ad hoc approach to training is the difference between business excellence and a business “getting by”, believes Margaret Murray, director of training at the CBI.

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But if shareholder confidence in the dot.com has taken a knock then e-commerce is continuing to bring business benefits through faster communications, quick access to market information and online trading portals. e-Procurement, and e-learning are starting to impact on corporate thinking. The DTI’s e-business unit, UK Online has conducted a survey which shows that 1.7 million small and medium sized enterprises (SMEs) are now connected, a 1.1 million increase over 1999, a figure that dramatically exceeds the Government’s original target of getting 1.5 million small firms online by the year 2002.

We continue to attract contributions of business journalists who offer pithy advice and report on best practice. Martin J Bailey, for example has some useful lessons for directors in his excellent article on health and safety which in the light of Railtrack’s recent track record are timely. He says: “UK plc is waking up to the fact that good health and safety regimes can cut costs by reducing liability claims and insurance premiums and increase profits by improving workforce morale.”

Introduction

Barely two months after the budget and with an election looming, corporate Britain could be forgiven for wishing a curse on all politicians. Complicated tax and benefits regime and reams of red tape and bureaucracy have given business a lot to complain about.

Strict fiscal control is prudent on one level but the missed opportunities for investment in transport infrastructure and public services such as schools and hospitals could have provided a much needed boost to companies – and not just those involved in construction or service provision. Continued public investment would do much to prevent a slide into recession and would restore confidence.

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As a Sunday Business analyst has reported, the tax burden on business has been rising steadily. “Tax as a share of GDP – the total output of the economy – has now risen by some 2.5 percentage points since Labour swept to victory in May 1997, equivalent to an additional burden on business of approximately £25 billion.”

Business Excellence continues to exercise minds in the boardroom. High on the agenda are corporate governance, shareholder relations, post merger rationalisation, and naturally, e-commerce and IT strategy.

As David Taylor president of IT directors’ association, CERTUS tells us, “If you do what we have always done, you will get what we have always got. It is staggering how many of us, at a leadership, personal and corporate level, continue to do exactly the same as we have always done, and complain when we achieve exactly the same results.”