STRATEGIC PERFORMANCE SYSTEMS

The Benefits of Building a Modern Strategic Performance System

Modern Strategic Performance Systems are applicable to organisations regardless of size or type of business. They:

  • Facilitate the development and ongoing review of an organisation’s strategy.
  • Provide a method of aligning the organisation’s business activities with that strategy, and
  • Allow the organisation to monitor its performance against its strategic objectives.

Most organisations already use various forms of performance systems, usually based around KPIs and scorecards, and frequently combined with ‘dashboard’ reporting. Most of the large software companies promote ‘off the shelf’ performance management systems.

The Weaknesses in Many Organisation’s KPI & Scorecard Applications

  1. The oversimplification of complex factors.
  2. Separation of operational KPIs from the organisation’s strategies.
  3. The tendency towards managerial remoteness (the cockpit mentality).
  4. Underestimating the costs of building information systems.
  5. Underestimating the amount of managerial time required.

The Characteristics of Successful Performance Management Systems

  1. Informed and committed leadership.
  2. Clear focus on the development and implementation of strategy.
  3. Excellent communications.
  4. Involvement of staff at all levels.
  5. Good performance measures.
  6. Fairness.
  7. Meaningful reward systems.

Modern Strategic Performance Systems – Strengths

Modern Strategic Performance Systems:

  1. Make everyone accountable for the organisation’s performance.
  2. Are completely adaptable.
  3. Facilitate the clear and ongoing development of an organisation’s strategy.
  4. Provide a clear methodology for implementing that strategy.
  5. Develop meaningful measures.
  6. Improve the organisation’s internal and external communications.

© Copyright, Balanced Scorecard Institute Pty Ltd, 2012

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