Extending Business Performance Management to all within the

Organization

Mehdi ALAOUI

Nov 2105

Business Performance Management

Everything should be made as simple as possible, but not

simpler

Albert Einstein

What do we want to address?Continuously

evolving Context

How do we

address it?

Business Process

Management and

Performance

Define and implement a

strategy

Focus on the people

Leaner: Simpler processes

Complex organisations and

flows

Fierce competition

Demanding customer s &

suppliers

Difficult global economy

What are we going to learn

• Performance Management needs a frame: Process Management

• Momentum must be led by top management: Lead by example

• Proactive attitude

• All the company need to be aligned: Integrated performance management systems rely on a comprehensive,

• Involvement and commitment of People is a key success factor

• Integrated set of Key Performance Indicators (KPIs) that manage performance throughout and across all levels of an organization

• Continuous improvement by increasing understanding of the coreissues driving the performance

• Company must be leaner to be stronger and faster

Agenda• Implementing a strategy successfully

• Translating a strategy into concrete individual actions

• Reporting for accountability and responsibility

• The evolving role of finance in the new environment

• Strategy definition– High level plan to achieve one

or more goals under conditions of uncertainty.

– A pattern in a stream of decisions (Henry Mintzberg)

– Strategy is about shaping thefuture (Max McKeown)

– Where to play and how to win, to maximize long-term value

• Corporate Strategy – Integrated view of the firm.

– Coordination and consistency

across the functions are

hallmarks of effective strategy.

– functional policies tailored to

each other and to its environment

– Long-term perspective.

We need a Strategy!

Implementing a strategy successfully

• A Vision

• Business Priorities

• Strategic

Challenges

Defining a Strategy

Implementing a strategy successfully

The steps :

�Strategic Plan: 2035

�Tactical plan: 3 year Plan

�Operational plan: Budget

�Key issues in translating strategy into action

Business Performance Management

• Process by which organizations align their resources, systems

and employees to strategic objectives and priorities

• Organizations need to get the best out of their people if they

are to survive and prosper in an increasingly competitive

world

• The most mature and successful implementations are those in

which BPM is introduced voluntarily by the company to

improve its decision-making and to generate new insights

and understanding that drive performance improvements

Business Process Management definition

Business Process Approach

Cu

sto

me

rN

EE

DS

Cu

sto

me

rSA

TIS

FAC

TIO

N

Define Market needs

Develop Product

Sell Product

Deliver Product

Service Product

Strategic Process

Core Processes

Support Processes

Finance HR EHS Quality Sourcing

BPM cycle & Continuous Improvement (6 Sigma)

Define Process

•Process definition & Modelling

•Obtain Client Requirements

•Aligned to Business Strategy

Measure & Execute

•Execute as defined

•Quantify Process Performance

Analyze

•Understand Performance

•Determine optimal improvement

•Establish improvement targets

Improve

•Validate the solution design

•Validate pilot solution

•Implement the improvement

Control

•Confirm the solution

•Standardize the process

Process Ownership

Process Execution & Monitoring

Eficiency &

Efectiveness

Strategic Objectives

Strategy Map

Performance Measures & Targets

Strategic Initiatives

Defining a Strategy

Vision &

Strategy

Financial“Financial

Performance”

InternalBusiness Process

“Efficiency”

OrganizationalCapacity

“Knowledge

and

Innovation”

Customer / Stakeholder

“Satisfaction”

From R.Kaplan and D. Norton “Using the Balanced Scorecard as Strategic

Management System” – Harvard Business Review 1996

Strategic Planning and Balanced Scorecard

Implementing a strategy

BSC

Translating theVision

(Clarifying the Vision /

Gaining Consensus)

Feedback and Leadning

Business Planning

( Setting targets / Aligining strategic

initiatives / Allocatingressources / establishingmilestones)

Communicatingand Linking

(Communicating and Educating / Setting

goals / Linkingrewards to

performance measures)

From R.Kaplan and D. Norton “Using the Balanced Scorecard as Strategic

Management System” – Harvard Business Review 1996

Managing Strategy: 4 Processes

BSC

Process KPIs

Operational KPIs

Agenda• Implementing a strategy successfully

• Translating a strategy into concrete individual actions

• Reporting for accountability and responsibility

• The evolving role of finance in the new environment

• Delivering value efficiently to the

customer

• Enabling people to lead and

contribute to their fullest potential

– Empower people

– Develop people

• Discovering better ways of working

– Problem solving culture

– Continuous improvement

– Less is More

• Connecting Strategy, goals and

meaningful purposes

– Aligned Organisation

– Less levels

The core idea is to

maximize customer value

while minimizing waste.

Simply, lean means

creating more value for

customers with fewer

resources.

LEAN CONCEPT

Individual Actions

• Executing a transformation such as Performance management requires dividing a large task into practical iterative steps that achieve measurable results and build momentum

• Once strategy is defined, once Business objectivesare defined, once BSC is defined, comes the

�Objectives define SMART (Stretching, Measurable, Agreed, Realistic, time bound) Aligned with Business objectives and BSC

�Performance cycle

�Bonus alignement

From the BSC to individual action

Individual Actions

• Communication

• KPI cascaded down to the whole

organisation and in line with daily tasks

• Everyone look in the same direction

The involvement of every player is critical

Individual Actions

Agenda• Implementing a strategy successfully

• Translating a strategy into concrete individual actions

• Reporting for accountability and responsibility

• The evolving role of finance in the new environment

• KPIs are the quantifiable performance

measures that make the critical success

factors actionable and understandable.

• They allow the organization to monitor and

communicate performance continuously

against desired results

• Quality / Cost / Delivery

Defining the Key Performance Indicators

Accountability & Responsibility

• Personal impact

• An emotional reaction to the vision of change is normal and should be expected.

• People react differently. Those who resist often do so out of a conscious or unconscious fear of loss. Such fears can be overcome by a variety of methods, including participation in the change process, communication, counselling, training and negotiation

• People will embrace change if seriously engaged in the process

Accountability & Responsibility

Managing the change

Agenda• Implementing a strategy successfully

• Translating a strategy into concrete individual actions

• Reporting for accountability and responsibility

• The evolving role of finance in the new environment

• To provide accurate and timely financial information to our internal

and external stakeholders whilst working closely with Management on

financial priorities and challenges

• To be the guardian of rules in ensuring proper financial controls

• To be a business partner for all internal stakeholders

Finance role & mission

Supporting Operational Excellence

• Simplify administrative and reporting process

• Standardize Unit/PL/Business Reporting

• Simplify administrative and reporting process

• Identify errors and difficulties in reporting submissions

• Support Business cost reduction programmes

• Increase finance function efficiency

• Cash Focus – support lead time and inventory reduction

initiatives

• Reduce billing lead time

• Engage employees to share and use best practices

• Develop a strong Finance community

Objectives

Simplification

Quality

Cost

Competitiveness

Cash

People

Performance Management within Finance

The evolving role of finance in the new

environment

Developing soft skills

• Agreed need and shared vision from top management to each individual

• Personal impact – importance of management the people: accompany –need people engagement – common goals (no silos)

• Developing capability: process, systems and skills

• Celebrate: transformation takes time, important to identify short term goals , celebrate and keep momentum

• Finance Director as business partner

� Understand strategy� Understand the frame / process� Has a need to simplify� Agile / flexible:� Lead by example and show that finance can be lean

• Define and Measure the Company KPIs

• Finance department freed from data gathering and

checking, devoted to Analysis and Decision support

• Timely reports based on metrics that MATTERS

• Lower costs and complexity in the preparation of reports

• A process that encourages continuous improvement

The evolving role of finance in the new

environment

Process Management co-pilot

Conclusion

� Performance measurement and management define the current and future success of an organization.

� Clear understanding among executives, managers and employees of what’s expected of them

� A compensation and reward system based on performance that advances the strategic objectives

� A process that encourages continuous improvement

Managing today’s activities and planning tomorrow’s

opportunities and growth strategies

Conclusion