It seems obvious that managers should be taking stock of whether their business is on track to meet its goals and targets. After all, making sure that a business is performing well is the job of any good manager.
But, putting in place a more structured system of Business Performance Management (BPM) is vital when it comes to giving your company a health check, to determine what your firm is already doing well and what could be done better to meet your business goals.
By collecting, assembling and analysing data from, and relevant to, your firm, you will be better placed to take the best course of action for your business.
The benefits of BPM are myriad, whether you are introducing the technique to fulfil industry obligations or voluntarily as a business-improvement method.
You should be able to identify ways of improving productivity and efficiency, along with pinpointing potential cost savings and generating new business. Well-executed BPM, supported by software tools, should also help future-proof your business by predicting outcomes.
A sea of data
Every company, no matter how small, has a whole ream of data, from sales figures to key performance indicators, distribution lists to shift patterns. But it is not just about how your firm collects data, but how it uses it to inform decisions.
A recent survey of 3,000 firms, by the Advanced Performance Institute (API), found that while some firms were applying BPM approaches effectively to gain useful insight, others said they were unhappy with the way they were measuring company performance.
All firms are likely to be using some form of analytics, even if they don’t have a formal BPM system in place. For example, you may use social media analytics to measure how many Facebook likes a post about a new product received or how many new Twitter followers your firm has.
The API puts businesses in seven categories, depending on how much data they had and how they were using it, from level one firms with no systems for collecting or reporting data to level seven companies who use performance data to make operational and strategic decisions and to understand what the future might hold.
The Google model
As you would expect from a company of such size and innovation, search engine giant Google would fall firmly into the highest level of performance management. Board members at the technology behemoth have identified strategic priorities along with questions linked to the company strategy which they want managers to regularly answer.
Google then uses a mix of more traditional key performance indicators along with innovative analytics. The firm uses its BPM data to particular effect in its HR department. Feedback scores, staff engagement and productivity information is used along with data from interviews and staff awards, enabling Google to tightly focus on the factors which set apart the good managers from the bad. The process has been so effective, that the firm has changed its recruitment process, its induction and training programmes as well as its performance management procedures.
It’s clear then, that BPM has all sorts of HR implications. Performance management, as opposed to its predecessor, performance measurement, should aid a business in its HR systems. Where training gaps are identified, programmes can be put in place to develop employees. Where employees are underperforming, you could pinpoint why along with gathering evidence if a dismissal becomes necessary. And, where there are problems with employee motivation and retention, you could identify problems or patterns that you need to change to make sure your business keeps its most talented staff.
As with any new initiative in a business, BPM works best where a firm engages well with employees. While the implementation will naturally come from the top down, there also needs to be buy-in further down the line. It’s important that BPM isn’t seen by employees as something used by management to keep tabs on staff.
A BPM strategy will only be successful if all employees understand the need, and the benefits of, measuring and managing performance throughout the company. Otherwise, your firm may struggle to collate the data you need. By communicating to all of your employees about how BPM is used to grow the company, you should eliminate any mistrust.
Done well, BPM should have a positive impact on employees individually and your business as a whole, allowing your workforce and your company to flourish.
Neil Atkinson is founder of HR outsourcing specialists Deminos.