Performance Management in a Tight Economy - Part 2

"It's a new world and you need a completely new set of objectives to deal with the new reality you are facing."

Performance Management in a Tight Economy - Part 2

So the economy is tough and all of your executive team missed their thresholds for last year’s Goals / KPIs / Objectives (Objectives). It is a new world and you need a completely new set of Objectives to deal with the new reality you are facing. You need to re-align your entire workforce to the new reality. You can’t wait 6 months for your new operating plan to take effect, you need action now. This White Paper describes how to deal with some of the issues you are facing, typical Objectives for this new business reality and methods to get fast traction for your new operating plan.

Review the Strategy

The first thing you need to do is review the strategy. This sounds obvious but often gets overlooked in the scramble to get operating results.

Today organisations are changing strategies that were long range like market share to short term survival objectives like preservation of cash. Projects that won’t generate cash within 12 months are being postponed. Market share strategies are being targeted to short term profitability and cash generation. The focus on long range product development changes to “sell what we have got today”.

In summary, longer term Strategic initiatives may still happen in the background but most organisations are taking a shorter term view with greater focus on short term cash preservation or cash generation.

What happens if there is no Strategy?

In the absence of a strategy, most CEO’s defer to an operating plan and call it “The Strategy”. Expectations that the Strategy is some elaborate and complex magical pearl of wisdom are often misplaced. In tough times, sometimes the Strategy is as simple as Operating Excellence – perfecting the things we already do today that made us successful in the past.

Prioritise High Value and High Impact initiatives

As a consequence of the Strategic Review you will identify certain long term strategic items that you may have to defer. The question then is how do you prioritize the remaining objectives? We have found a preferred method is to create a value/ impact model that is simple to execute so that all of your managers can understand. Following is a value/impact model that will help you prioritize the initiatives that should be prioritized and brought forward in time.

Prioritisation

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Performance Management in a Tight Economy - Part 2

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