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Take control of your
                                  business performance
                                  Navigating blind is no longer an option




Corporate leadership teams often feel their control on their business slipping. For instance, the
leader of a major oil and gas company’s IT organization told us he felt he was losing control of
the organization. Although the organization believed it was delivering value to its stakeholders,
customers were increasingly complaining about poor service. Moreover, dissatisfaction among
stakeholders with financial performance was rife.



                                                           How can managers regain control?
The problem stemmed from a range of factors, such
as the absence of clear or meaningful performance          Following the old adage ‘one can’t manage what
indicators, a lack of framework to prioritize actions      one can’t measure,’ the first step to regaining control
effectively, and misalignment between stakeholders’        of performance is to design the right performance
expectations and organizational goals and objectives.      management framework. Value-based performance
                                                           management frameworks can help managers assess
The sense of diminishing control is common at any          their organization’s health. Once in place, they serve
management level. With the ‘r-word’ on everyone’s lips,    as catalysts for change, or even as a routemap for the
regaining control is paramount. It is especially crucial   leadership team’s transformation programs.
to show confidence to stakeholders, customers, and
employees. Navigating blind is no longer an option.




Thought Leadership
Figure 1:   Performance management cycle

     Assess the current performance                                                                                           Design the future scorecard:
     management framework:                                                                                                    Design conceptual dashboard,
                                                                                1                            2
     Review KPIs currently in place,                                                                                          identify and select future KPIs to
     assess organization objectives.                                                                                          include in the dashboard, create
     Output: Gap analysis                                                                                                     value-driver tree. Output: Pilot
                                                                                                                              temporary dashboard, KPIs map


     Train and educate: Enable the team                                                                                       Benchmark for realistic
                                                               6                                                              goal-setting: Identify external and
     to make informed decisions using the
                                                                                                                 3
                                                                                  Communicate
     scorecard. Output: Organization ready                                                                                    internal benchmarks and set realistic
     to use the dashboard                                                                                                     objectives. Output: Benchmark analysis,
                                                                                                                              targets for all KPIs


     Engage key stakeholders:                                                                                                 Implement the scorecard:

                                                                            5
     Communicate continuously over time,                                                                                      Select a more robust and permanent
                                                                                                        4
     establish performance management roles                                                                                   platform, eg SharePoint and design
     and responsibilities. Output: Governance                                                                                 reporting mechanisms required. Output:
     structure, change plan                                                                                                   Automated dashboard ready for use




    Figure 2:   KPI review and prioritization matrix

         Phase II (focus)                                                                                                                 Phase I (immediate)
                                          Customer                                                                                                     Budget
                                                                            Customer              Cost to
                                         satisfaction                                                                                                 adherence
                                                                             uptime                serve
                                                                                      Performance
                                                                                                                                     Risk
                                                                                       vs service
                                                                                                                                  management
                                                                                       contracts
                                                              Process
                                                                                                                                                       Safety
                                   Value to                                                                       Employee
                                                            improvement                                                           Capacity
                                                                                                                                                     compliance
                                  customers                                                                      engagement
                                                           and innovation

                                                                                                                                          Training and
                                                                                                                         Talent
           Vendor                                                                                    Project                               knowledge
                                                                                                                      management
         management                                                                                performance                            management
                                                                                                                        process
                                                                                       Customer
                                                                                                                    Cash
            Revenue                                                                                                                          Shareholder value
                                                                                        demand
                                                                                                                 management
             impact                                                                                                                          Customer value
                                                                                      management
                                                                                                                                             People and capabilities
                                                                                                                                             Operational excellence
         Phase IV
                                                                                                                                                           Phase III
         Lower priority metrics
         Not ready                                                                                                                                               Ready


    Figure 3:   Sourcing executive dashboard
                                                                                                                                Key messages:
                           Business resilency                                           Financial                               1. The Brazil Data Center is now online.
                                                                                                                                   Disaster Recovery testing for applications
                     OVERALL SCORE                                                OVERALL SCORE
                                                                                                                                   is proceeding as per schedule.
                     Business continuity risk mitigation                          Savings target adherence
                                                                                                                                2. The incident volume has increased by
                     Disaster recovery plan adherence                             Additional savings
                                                                                                                                   over 70%, but the response times have
                     Data center hardening                                        Variable cost model
                                                                                                                                   remained steady without any increase in
                                                                                  Per unit cost of service
                                                                                                                                   staffing/costs.
                                                                                                                                3. Savings targets have exceeded target
                                                           Overall efficiency
                                                                                                                                   by 7% and are on track to meet the
                                                                                                                                   annual CBA target for the year.
                                                                Service
                                                                                                                                4. The first customer satisfaction survey
                                                                                                                                   has had an overall positive score of
                                                        OVERALL SCORE
                                                                                                                                   75%. Life, P&C and Corp – all companies
                                                        Service level adherence
                                                                                                                                   have rated services at more than 70%
                                                        Customer satisfaction
                                                                                                                                   satisfaction. We are targeting to improve
                                                        Service provisioning
                                                                                                                                   this measure to 80% by next survey.




                     People                                                           Flexibility                                         Transformation
             OVERALL SCORE                                                          OVERALL SCORE                                         OVERALL SCORE




2
Designing and implementing these management               After agreeing on the design principles, existing metrics
frameworks involve the following activities as            should be reviewed against criteria based on corporate
highlighted in Figure 1:                                  objectives, as illustrated in Figure 2. The assumption
                                                          here is that the organization already has a performance
• Assessing the current performance management
                                                          management framework and does not want to ‘reinvent
 framework, if any
                                                          the wheel.’ Identifying the positive metrics and the
• Designing the future scorecard                          potential gaps will help build the future scorecard,
                                                          leveraging existing strengths of the framework in place.
• Benchmarking internally and externally for realistic
 goal-setting
                                                          Designing the future scorecard applies the learning
• Implementing the scorecard on temporary and/or
                                                          from the initial analysis by building it into a structure
 permanent IT platforms
                                                          called the value-driver tree. It drives consistency
                                                          and completeness by mapping all metrics onto their
• Educating key stakeholders for buy-in and sustainable
                                                          respective segments and linking them into one coherent
 use and improvement of the tool
                                                          system. This process will drive out metric areas where
• Driving sustainable performance improvements using
                                                          the organization lacks maturity and focus, or reveal
 the framework.
                                                          better ways to obtaining needed data not yet available.

Assessing the current performance management
                                                          At the same time there is an opportunity to ensure
framework requires a collaborative analysis with
                                                          alignment with corporate or business goals. Finally, a
the business. This will ensure objectives are reviewed
                                                          system for highlighting levels of performance is added,
and metrics assessed against them. At this step,
                                                          which includes an agreement on visual aspects such as
an agreement should be reached on design
                                                          color-coding and trend depiction, and inclusion in the
principles, taking into account corporate and
                                                          model as a dashboard. Levels of scoring are equated
organizational objectives.
                                                          with colors that will sharpen the organization’s focus
                                                          on performance improvement. Figure 3 provides an
                                                          example of a high-level design.




                                                                                                                      3
Figure 4:     Charting the normalized results drives target-setting and best practice initiatives to improve performance

                  Average time to answer – seconds                                Longest time to answer – seconds                            Average time to answer – seconds

             Q1                                                            Q1                                                         Q1

             Q2                                                            Q2                                                         Q2

             Q3                                                            Q3                                                        COA

             Q4                                                            Q4                                                         Q3

            COA                                                            COA                                                        Q4




            Customer satisfaction survey by customer type                              Abandonment rate                                   Inbound agent call wrap-up time – minutes
                   (regular, key, new customers)
                                                                            Q1                                                       Q1
             Q1

                                                                            Q2                                                       Q2
             Q2
                                                                            Q3                                                       Q3
             Q3
                                                                           COA                                                       Q4

                                                                            Q4                                                       COA
             Q4




    Normalized data is compared to the target company and is used to define stretched, market-based target and objectives to aim for to improve overall
    performance. Best practices of the better performing companies are identified for implementation by the target company and initiatives created to enable
    those stretched targets to be achieved and to move from second to first quartile performance.


    Figure 5:     Example performance management framework

                                                       Above expectations             Meets expectations              Below expectations



                          Value to customers                                                                          Value to shareholders
                                                                 2.2                                                                                                   1.5
                          Time spent on IT issues                2.0                                                  Actual costs vs budgets/targets                  2.0
                          Field force satisfaction               2.0                                                  Cost reduction over time                         1.0
                          Managing field force demand            2.7                                                  Account payable performance                      1.5
                                                                                  Sourcing effectiveness
                                                                                               2.1
                          Team capability                                                                             Vendors and service performance
                                                                 3.0                                                                                                   1.6
                                                                                                                      Performance against SLAs                         2.0
                          Team performance                       3.0
                                                                                                                      Internal vendor performance survey               1.5
                          Team satisfaction                      3.0
                                                                                                                      Performance against contract                     1.5
                          Team capacity                          3.0
                                                                                                                      Projects performance                             1.5




    Figure 6:     The change framework includes both driving and releasing

                                                Making it essential                  Making it ready                    Making it happen                         Making it stick
                                                        Build case                   Communicate case                       Review case                          Ensure relevance
     Build and communicate a
     compelling case for change                       Model benefits                    Plan realization                   Track benefits                         Drive realization
     Design and drive
                                                     Design program                     Develop plans                         Mobilize                         Capture knowledge
     the program
                                                                                                                           Implement and
                                              Define future organization         Detailed organization design                                                 Fine tune organization
                                                                                                                          test organization
     Design and structure                                                                                                  Implement and
                                               Define future processes             Detailed process design                                                     Fine tune processes
     the business                                                                                                          test processes

                                            Define system requirements                 Design systems                Implement and test systems                 Fine tune systems

     Enable change leadership                         Build purpose                   Develop capability                   Coach leaders                          Develop leaders
                                                                                    Engage and manage
     Engage and enable people                    Identify stakeholders                                               Build knowledge and skills             Use knowledge and skills
                                                                                       stakeholders
     Align with the                                                                                                                                              Gather views and
                                                     Assess readiness              Define change required                 Release energy
     organizational culture                                                                                                                                      refresh approach

       Driving        Releasing




4
However, depending on the maturity of the organization
Benchmarking internally and externally for realistic             and the state of system and data availability, more
goal-setting helps to determine current performance              robust and sophisticated platforms can be investigated
levels against a panel of peers and to establish                 such as SharePoint or Business Objects. The scorecard
targets against which scores are measured to                     should be implemented quickly and pragmatically,
improve performance.                                             with automated linkages to data preferred to manually
                                                                 gathering and populating spreadsheets. Extensive
Benchmarking data is available from companies that               testing and refinement must occur prior to launch.
specialize in such studies and appropriate data that
aligns with the scorecard being developed needs to               Educating key stakeholders in the objectives, purpose
be sourced. The benchmarking process should                      and function of the scorecard is vital to a successful
include a comprehensive set of normalization factors             implementation. A well structured change framework will
to ensure that comparisons are fair, that the appropriate        ensure that the required business change is successfully
level of attainable stretch is built into the targets, and       implemented. Key scorecard management roles need
that the process is repeatable as the scorecard matures          to be defined to ensure smooth operation and reporting.
over time. An example is provided in Figure 4.                   All staff will have to be trained and the team will need to
                                                                 develop training materials and a suitable course.
Implementing the scorecard on temporary and
permanent IT platforms is the next logical step once             Since business performance is being managed
the model and its data sources have been confirmed               through this process, the effectiveness of training
and finalized. Typically the initial model is built in readily   will also need to be tracked throughout. A well informed
available tools such as MS Excel or MS Access.                   stakeholder group is a critical success factor of such an
                                                                 implementation, especially since the logical outcome
                                                                 of such an initiative is that compensation and rewards
                                                                 will eventually be linked to performance measures the
                                                                 scorecard reports.




                                                                                                                               5
Figure 7:   Stretching goals and targets




                                                                                                                            Final performance
                                                                                                                            targets
Performance




                                                                                              Intermediate
                                                                                              performance
                                                                                              targets
                                                    Intermediate
                                                    performance
                                                    targets



                                                                                  Time




              Figure 8:   Scorecard management process
                                                                                                                                           Focus
                                                                                                                                          metrics
               Update scorecard                                                                                                       list (monthly)
                                      Review weightings     List all consistent
                  with latest
                                         and targets         upward trends
                 metric data


                                                           List metrics below
                                                                                                                                         Revised
                                                                  50%
                                                                                                                List recurring
                                                                                           Identify top YES                            targets and
                                                                                                                   greens
                                                                                         5-10 metrics for                              weights list
              Suggestions/guidelines:                                                                          (three months)
                                                                                           discussion?
                                                             List metrics red
              • Focus on top 5-10 metrics
                                                                and down
                at each SLT meeting
              • Revise metrics quarterly                                                                        Review targets
                                                                                                                                           Add or
                                                                                                              to see if they need
              • Revise targets whenever necessary                                                                                         remove
                                                             List metrics red                                    to be revised
                to remove recurring green                                                                                                  metrics
                                                                  and flat
                                                                                                                                      list (quarterly)
              • Revise weighting annually.




   6
Turning the framework into an effective                           individuals’ cascade with clear line of sight to strategic
communication tool will help spur organizational and              objectives. The linking of business performance to
behavioral change, the area where such programs most              incentives with periods and parameters of performance
frequently fail. In developing and communicating a clear          is the desired outcome, but this is a sensitive area
case for change, leaders must be engaged at every                 which requires clear communication. It is important
stage of the process.                                             to define and communicate the management process
                                                                  exhaustively of how the scorecard will be managed
A comprehensive stakeholder management and                        and how rewards will be calculated and awarded,
communication plan aligned to the change framework                who qualifies and what the schedule for payouts will
must be actively used to familiarize stakeholders with            be. The scorecard itself should be sufficiently stable
the scorecard. Implementation of the scorecard is most            so that it delivers consistent results before any linkage
effective when it is cascaded into the organization and           to rewards or incentives is considered.
driven with the support of key stakeholders.
                                                                  Take back control of your business performance
Driving improved performance using the framework                  now and establish a well-designed performance
must be the ultimate aim of any performance scorecard             management framework to align with and achieve
implementation. As stressed in the communication                  excellent performance. To do so, adopt a structured
process, the objectives, purpose, and operation need              approach. You will immediately begin to reap the
to be communicated and understood at the lowest levels            rewards that improved performance brings.
of the organization.


A reliable process to confirm that understanding needs
to be in place before proceeding fully. It is vital that clear,
single accountability for information that links metrics to




                                                                                                                               7
Corporate headquarters
123 Buckingham Palace Road
London SW1W 9SR
United Kingdom
Tel:    +44 20 7730 9000
Fax: +44 20 7333 5050
E-mail: info@paconsulting.com

United States headquarters
4601 N Fairfax Drive
Suite 600
Arlington, VA 22203
Tel:    +1 571 227 9000
Fax: +1 571 227 9001
E-mail: info-us@paconsulting.com

United States offices in:
Boston, MA
Tel:    +1 617 225 2700
Fax:    +1 617 225 2631

Chicago, IL
Tel:    +1 312 566 9752
Fax:    +1 312 566 9753

Denver, CO
Tel:    +1 720 566 9920
Fax:    +1 720 566 9680

Houston, TX
Tel:   +1 713 353 3976
Fax:   +1 713 353 8887

Los Angeles, CA
Tel:   +1 213 689 1515
Fax:   +1 213 621 3082

Madison, WI
Tel:   +1 608 443 2700
Fax:   +1 608 661 5181

New York, NY
Tel:   +1 212 973 5900
Fax:   +1 212 973 5959

Princeton, NJ
Tel:    +1 609 806 0800
Fax:    +1 609 936 8811

San Francisco, CA
Tel:   +1 415 955 2619
Fax:   +1 415 397 6309

Washington, DC
Tel:   +1 571 227 9000
Fax:   +1 571 227 9001


www.paconsulting.com/us

PA Consulting Group is a
leading management, systems
and technology consulting firm,
operating worldwide in more than
35 countries.

Principal national offices in
Argentina, China, Denmark,
Germany, India, Ireland,
Malaysia, Netherlands,
New Zealand, Norway,
Sweden, United Arab Emirates,
United Kingdom, United States

© PA Knowledge Limited 2008.
  All rights reserved.
00632-7

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Take Control Of Your Business Performance

  • 1. Take control of your business performance Navigating blind is no longer an option Corporate leadership teams often feel their control on their business slipping. For instance, the leader of a major oil and gas company’s IT organization told us he felt he was losing control of the organization. Although the organization believed it was delivering value to its stakeholders, customers were increasingly complaining about poor service. Moreover, dissatisfaction among stakeholders with financial performance was rife. How can managers regain control? The problem stemmed from a range of factors, such as the absence of clear or meaningful performance Following the old adage ‘one can’t manage what indicators, a lack of framework to prioritize actions one can’t measure,’ the first step to regaining control effectively, and misalignment between stakeholders’ of performance is to design the right performance expectations and organizational goals and objectives. management framework. Value-based performance management frameworks can help managers assess The sense of diminishing control is common at any their organization’s health. Once in place, they serve management level. With the ‘r-word’ on everyone’s lips, as catalysts for change, or even as a routemap for the regaining control is paramount. It is especially crucial leadership team’s transformation programs. to show confidence to stakeholders, customers, and employees. Navigating blind is no longer an option. Thought Leadership
  • 2. Figure 1: Performance management cycle Assess the current performance Design the future scorecard: management framework: Design conceptual dashboard, 1 2 Review KPIs currently in place, identify and select future KPIs to assess organization objectives. include in the dashboard, create Output: Gap analysis value-driver tree. Output: Pilot temporary dashboard, KPIs map Train and educate: Enable the team Benchmark for realistic 6 goal-setting: Identify external and to make informed decisions using the 3 Communicate scorecard. Output: Organization ready internal benchmarks and set realistic to use the dashboard objectives. Output: Benchmark analysis, targets for all KPIs Engage key stakeholders: Implement the scorecard: 5 Communicate continuously over time, Select a more robust and permanent 4 establish performance management roles platform, eg SharePoint and design and responsibilities. Output: Governance reporting mechanisms required. Output: structure, change plan Automated dashboard ready for use Figure 2: KPI review and prioritization matrix Phase II (focus) Phase I (immediate) Customer Budget Customer Cost to satisfaction adherence uptime serve Performance Risk vs service management contracts Process Safety Value to Employee improvement Capacity compliance customers engagement and innovation Training and Talent Vendor Project knowledge management management performance management process Customer Cash Revenue Shareholder value demand management impact Customer value management People and capabilities Operational excellence Phase IV Phase III Lower priority metrics Not ready Ready Figure 3: Sourcing executive dashboard Key messages: Business resilency Financial 1. The Brazil Data Center is now online. Disaster Recovery testing for applications OVERALL SCORE OVERALL SCORE is proceeding as per schedule. Business continuity risk mitigation Savings target adherence 2. The incident volume has increased by Disaster recovery plan adherence Additional savings over 70%, but the response times have Data center hardening Variable cost model remained steady without any increase in Per unit cost of service staffing/costs. 3. Savings targets have exceeded target Overall efficiency by 7% and are on track to meet the annual CBA target for the year. Service 4. The first customer satisfaction survey has had an overall positive score of OVERALL SCORE 75%. Life, P&C and Corp – all companies Service level adherence have rated services at more than 70% Customer satisfaction satisfaction. We are targeting to improve Service provisioning this measure to 80% by next survey. People Flexibility Transformation OVERALL SCORE OVERALL SCORE OVERALL SCORE 2
  • 3. Designing and implementing these management After agreeing on the design principles, existing metrics frameworks involve the following activities as should be reviewed against criteria based on corporate highlighted in Figure 1: objectives, as illustrated in Figure 2. The assumption here is that the organization already has a performance • Assessing the current performance management management framework and does not want to ‘reinvent framework, if any the wheel.’ Identifying the positive metrics and the • Designing the future scorecard potential gaps will help build the future scorecard, leveraging existing strengths of the framework in place. • Benchmarking internally and externally for realistic goal-setting Designing the future scorecard applies the learning • Implementing the scorecard on temporary and/or from the initial analysis by building it into a structure permanent IT platforms called the value-driver tree. It drives consistency and completeness by mapping all metrics onto their • Educating key stakeholders for buy-in and sustainable respective segments and linking them into one coherent use and improvement of the tool system. This process will drive out metric areas where • Driving sustainable performance improvements using the organization lacks maturity and focus, or reveal the framework. better ways to obtaining needed data not yet available. Assessing the current performance management At the same time there is an opportunity to ensure framework requires a collaborative analysis with alignment with corporate or business goals. Finally, a the business. This will ensure objectives are reviewed system for highlighting levels of performance is added, and metrics assessed against them. At this step, which includes an agreement on visual aspects such as an agreement should be reached on design color-coding and trend depiction, and inclusion in the principles, taking into account corporate and model as a dashboard. Levels of scoring are equated organizational objectives. with colors that will sharpen the organization’s focus on performance improvement. Figure 3 provides an example of a high-level design. 3
  • 4. Figure 4: Charting the normalized results drives target-setting and best practice initiatives to improve performance Average time to answer – seconds Longest time to answer – seconds Average time to answer – seconds Q1 Q1 Q1 Q2 Q2 Q2 Q3 Q3 COA Q4 Q4 Q3 COA COA Q4 Customer satisfaction survey by customer type Abandonment rate Inbound agent call wrap-up time – minutes (regular, key, new customers) Q1 Q1 Q1 Q2 Q2 Q2 Q3 Q3 Q3 COA Q4 Q4 COA Q4 Normalized data is compared to the target company and is used to define stretched, market-based target and objectives to aim for to improve overall performance. Best practices of the better performing companies are identified for implementation by the target company and initiatives created to enable those stretched targets to be achieved and to move from second to first quartile performance. Figure 5: Example performance management framework Above expectations Meets expectations Below expectations Value to customers Value to shareholders 2.2 1.5 Time spent on IT issues 2.0 Actual costs vs budgets/targets 2.0 Field force satisfaction 2.0 Cost reduction over time 1.0 Managing field force demand 2.7 Account payable performance 1.5 Sourcing effectiveness 2.1 Team capability Vendors and service performance 3.0 1.6 Performance against SLAs 2.0 Team performance 3.0 Internal vendor performance survey 1.5 Team satisfaction 3.0 Performance against contract 1.5 Team capacity 3.0 Projects performance 1.5 Figure 6: The change framework includes both driving and releasing Making it essential Making it ready Making it happen Making it stick Build case Communicate case Review case Ensure relevance Build and communicate a compelling case for change Model benefits Plan realization Track benefits Drive realization Design and drive Design program Develop plans Mobilize Capture knowledge the program Implement and Define future organization Detailed organization design Fine tune organization test organization Design and structure Implement and Define future processes Detailed process design Fine tune processes the business test processes Define system requirements Design systems Implement and test systems Fine tune systems Enable change leadership Build purpose Develop capability Coach leaders Develop leaders Engage and manage Engage and enable people Identify stakeholders Build knowledge and skills Use knowledge and skills stakeholders Align with the Gather views and Assess readiness Define change required Release energy organizational culture refresh approach Driving Releasing 4
  • 5. However, depending on the maturity of the organization Benchmarking internally and externally for realistic and the state of system and data availability, more goal-setting helps to determine current performance robust and sophisticated platforms can be investigated levels against a panel of peers and to establish such as SharePoint or Business Objects. The scorecard targets against which scores are measured to should be implemented quickly and pragmatically, improve performance. with automated linkages to data preferred to manually gathering and populating spreadsheets. Extensive Benchmarking data is available from companies that testing and refinement must occur prior to launch. specialize in such studies and appropriate data that aligns with the scorecard being developed needs to Educating key stakeholders in the objectives, purpose be sourced. The benchmarking process should and function of the scorecard is vital to a successful include a comprehensive set of normalization factors implementation. A well structured change framework will to ensure that comparisons are fair, that the appropriate ensure that the required business change is successfully level of attainable stretch is built into the targets, and implemented. Key scorecard management roles need that the process is repeatable as the scorecard matures to be defined to ensure smooth operation and reporting. over time. An example is provided in Figure 4. All staff will have to be trained and the team will need to develop training materials and a suitable course. Implementing the scorecard on temporary and permanent IT platforms is the next logical step once Since business performance is being managed the model and its data sources have been confirmed through this process, the effectiveness of training and finalized. Typically the initial model is built in readily will also need to be tracked throughout. A well informed available tools such as MS Excel or MS Access. stakeholder group is a critical success factor of such an implementation, especially since the logical outcome of such an initiative is that compensation and rewards will eventually be linked to performance measures the scorecard reports. 5
  • 6. Figure 7: Stretching goals and targets Final performance targets Performance Intermediate performance targets Intermediate performance targets Time Figure 8: Scorecard management process Focus metrics Update scorecard list (monthly) Review weightings List all consistent with latest and targets upward trends metric data List metrics below Revised 50% List recurring Identify top YES targets and greens 5-10 metrics for weights list Suggestions/guidelines: (three months) discussion? List metrics red • Focus on top 5-10 metrics and down at each SLT meeting • Revise metrics quarterly Review targets Add or to see if they need • Revise targets whenever necessary remove List metrics red to be revised to remove recurring green metrics and flat list (quarterly) • Revise weighting annually. 6
  • 7. Turning the framework into an effective individuals’ cascade with clear line of sight to strategic communication tool will help spur organizational and objectives. The linking of business performance to behavioral change, the area where such programs most incentives with periods and parameters of performance frequently fail. In developing and communicating a clear is the desired outcome, but this is a sensitive area case for change, leaders must be engaged at every which requires clear communication. It is important stage of the process. to define and communicate the management process exhaustively of how the scorecard will be managed A comprehensive stakeholder management and and how rewards will be calculated and awarded, communication plan aligned to the change framework who qualifies and what the schedule for payouts will must be actively used to familiarize stakeholders with be. The scorecard itself should be sufficiently stable the scorecard. Implementation of the scorecard is most so that it delivers consistent results before any linkage effective when it is cascaded into the organization and to rewards or incentives is considered. driven with the support of key stakeholders. Take back control of your business performance Driving improved performance using the framework now and establish a well-designed performance must be the ultimate aim of any performance scorecard management framework to align with and achieve implementation. As stressed in the communication excellent performance. To do so, adopt a structured process, the objectives, purpose, and operation need approach. You will immediately begin to reap the to be communicated and understood at the lowest levels rewards that improved performance brings. of the organization. A reliable process to confirm that understanding needs to be in place before proceeding fully. It is vital that clear, single accountability for information that links metrics to 7
  • 8. Corporate headquarters 123 Buckingham Palace Road London SW1W 9SR United Kingdom Tel: +44 20 7730 9000 Fax: +44 20 7333 5050 E-mail: info@paconsulting.com United States headquarters 4601 N Fairfax Drive Suite 600 Arlington, VA 22203 Tel: +1 571 227 9000 Fax: +1 571 227 9001 E-mail: info-us@paconsulting.com United States offices in: Boston, MA Tel: +1 617 225 2700 Fax: +1 617 225 2631 Chicago, IL Tel: +1 312 566 9752 Fax: +1 312 566 9753 Denver, CO Tel: +1 720 566 9920 Fax: +1 720 566 9680 Houston, TX Tel: +1 713 353 3976 Fax: +1 713 353 8887 Los Angeles, CA Tel: +1 213 689 1515 Fax: +1 213 621 3082 Madison, WI Tel: +1 608 443 2700 Fax: +1 608 661 5181 New York, NY Tel: +1 212 973 5900 Fax: +1 212 973 5959 Princeton, NJ Tel: +1 609 806 0800 Fax: +1 609 936 8811 San Francisco, CA Tel: +1 415 955 2619 Fax: +1 415 397 6309 Washington, DC Tel: +1 571 227 9000 Fax: +1 571 227 9001 www.paconsulting.com/us PA Consulting Group is a leading management, systems and technology consulting firm, operating worldwide in more than 35 countries. Principal national offices in Argentina, China, Denmark, Germany, India, Ireland, Malaysia, Netherlands, New Zealand, Norway, Sweden, United Arab Emirates, United Kingdom, United States © PA Knowledge Limited 2008. All rights reserved. 00632-7