Enterprise Performance Management (EPM) is an umbrella term used to describe the methodologies, metrics, processes, and systems that help enterprise companies monitor and manage their business’s performance.
Executives seeking deeper insights into business trends and potentially ambiguous opportunities utilize Performance Management. Sub-components of EPM include: Enterprise Planning, Performance Monitoring & Measurement, and Enterprise-Wide Reporting.
Benefits definitely outweigh the challenges in deploying an EPM capability. These benefits include:
- Enterprise-wide visibility
- Strategic “red-zone” monitoring
- Improved resource planning and allocation
- Agile decision-making
- Predictions for future performance
- Delivery of a broad spectrum of critical business data (Note: this data is generated through monitoring, analyzing, and controlling organizational performance.)
Failing to properly manage or dedicate your company to continuous improvement of your performance management capability can lead to undesirable outcomes. Organizations must be aware of common ways that performance management initiatives can be undermined, causing business performance to stall or decline, instead of thrive.
Here are 10 ways you could be undermining performance management and suggestions on ways to avoid these pitfalls:
1. You aren’t investing the time needed to define good performance metrics. – Time is the best investment you can make when it comes developing SMART (Specific, Measurable, Attainable, Realistic, and Timely) metrics. This step is crucial when implementing a sound performance management capability.
2. You neglect performance data quality – Data isn’t hard to find; however, properly managing that data is another story. Performance data stewardship requires informed management and oversight for modeling, preparing, maintaining standards, verifying quality, and communicating guidelines.
3. You don’t link metrics to strategic goals and financial performance outcomes – To increase visibility into your financial decisions, we recommend implementing a performance management framework that links financial and operational metrics. This framework helps companies allocate resources to specific goals based on the appropriate metrics. If you aren’t familiar with this framework, click here to get a quick rundown.
4. You are managing too many metrics – Creating and managing too many metrics can dilute and confuse the focus of your organization’s efforts. To save time and avoid inefficiencies, focus on what really matters most: the metrics that will truly impact your business decisions.
5. You fail to get organizational buy-in – Performance management requires buy-in from leadership, executive support, and your internal stakeholders. You need enterprise-wide collaboration and commitment to succeed. Without these supporters, resentment will develop when performance management is imposed sans input and approval.
6. You don’t demand accountability – People will not change their ways unless they are held accountable to their performance metrics. Every leader must become a performance manager for the areas they are held responsible.
7. You use metrics to punish, not empower – Managers who view metrics as a way to control rather than coach their staff may potentially harm employee morale and increase productivity issues. Instead of viewing increased insights provided by data and metrics as a way of controlling and disciplining staff, managers will be better served by using the metrics as a way of coaching and resolving performance issues.
8. You fixate on metrics, not actions – Organizations must focus on actions that will generate long-term results, not short-term performance improvement spikes. You must address the core issues, mitigate known risks, and improve company processes to create and foster a culture that responds positively to tracking.
9. Your performance management processes aren’t automated – Failure to bring the necessary automation into Excel-based or poorly automated data management and reporting processes can lead to productivity losses, data errors, and decision delays. You also may struggle with decreased collaboration and increased communication barriers. A lack of analytical insight will hurt the company. A comprehensive Performance Management Software can help companies work more effectively and efficiently to achieve strategic objectives.
10. You stop improving. – Continuous improvement is necessary for applying learned best practices and for adapting to changing environments. Ignoring lessons learned can stall your progress and hinder the efficacy of your performance management initiatives.
For more information on overcoming performance challenges, check out these additional resources:
“Ready, Set, GOAL! An Introduction to Performance Management Solutions”. Click here to register for this free webinar on Nov. 13, 2014, 2:00PM EST
Performance Management Solution Brief. Learn how to overcome performance challenges with Neubrain’s comprehensive, robust and easy to use new generation performance management software solution. Download now!