A holistic approach to improving business performance
The demand today for improved performance and accountability has led to an increase in expectations around the term performance management leading to a variety of limited views as to what the term involves. To help organizations understand and improve performance, the research organization, CAM-I (the Consortium for Advanced Management – International), has recently developed a standardized and integrated framework for implementing performance management within any organization.
The CAM-I Performance Management Framework (PMF) is a holistic methodology that identifies key enablers that influence any organization`s business performance. Within the constraints of the organization’s readiness capability, the framework:
- pinpoints gaps in enabler maturity
- recommends specific improvement techniques
- shows how to measure improvement success
The cornerstone of the methodology is the concept of enablers and maturity. [Enablers are a logical grouping of core business capabilities that allow an enterprise to advance its level of maturity and agility in achieving its business goals]. Consider the example diagram below where the research identified 13 enablers that should be ranked and assessed for (A) actual and (N) needed maturity.
|non-systematic, non-periodic and reactive||stable and repetitive||internally efficient and continuously improving||externally efficient and dynamic|
|Business/Operational Management||M||A & N|
|Customer Relationship Management||H||A & N|
|Environmental Management||L||A & N|
|Financial Management||M||A & N|
|Human Capital Management||M||A||N|
|Information Management||H||A & N|
|Supply Chain Management||L||A & N|
Clearly, not every enabler in the list is critical for all organizations but the research indicates that they should all be taken into consideration – the ranking will determine the enablers that are key to the business strategy.
How many of your organizations would even consider Environmental Management, Innovation Management or Risk Management as areas affecting business performance?
In the same way, not all key enablers need to be at the highest level of maturity and, in order to maximize scarce resources, it is important to recognize where effort is actually required to improve performance. This quick assessment helps organizations to identify and focus on key enablers that have the biggest gaps in performance management capability (in the example Process Management is ranked High and has the biggest maturity gap – so the organization can now focus on improving this area to improve performance.
The framework continues the expert advice by identifying the most applicable management techniques (from the list below) to produce an improvement in the key enabler maturity. [Improvement Techniques are a list of business tools or solutions designed to improve all processes and systems in the organization in order to achieve higher levels of performance].
|Improvement Technique Category||Definition|
|Activity-Based Management||A discipline focusing on the costing management of activities within business processes, as the route to continuously improve the value received by customers|
|Balanced Scorecard||A concept of identifying the cause and effect activities of a company required to meet its objectives in terms of vision and strategy|
|Benchmarking||A systematic and continuous measurement process that is used to compare an organization with other organizations|
|Business Analytics||A set of strategies, processes, technologies and tools that integrate data and transform it into useful information|
|Business Process Reengineering||The radical redesign of a process, product, or service|
|Capacity Management||A process used to manage utilization of all assets to ensure that business requirements are met in a cost-effective manner|
|Lean/Six Sigma||A business improvement methodology that focuses on quality through speed (Lean) and eliminating defects (Six Sigma)|
|Target Costing||A market-driven costing system in which targets are set by considering customer requirements and competitive offerings|
|Value Chain||The sequence of business activities that add value to a product or service|
How many of your organizations are attempting to implement one of these techniques without a real understanding of how this is going to specifically improve business performance?
Finally, a balanced set of performance measures are selected to assess the improvement that has been obtained by implementing the recommend technique. [Performance Measurement is the practice of tracking quantifiable and relevant outcomes to provide an objective assessment of performance].
How many of your organizations have a list of “Key Performance Indicators” that are not focused, balanced or connected to the overall performance improvement initiatives of the organization?
The CAM-I PMF provides a holistic implementation framework that aims to evaluate and improve any organization’s business performance using one consistent methodology, regardless of size or industry.