Critical Success Factors in Improving Corporate
Performance
By
John Kyriazoglou
1.
Introduction
There are five typical questions (Q) that
come to mind in evaluating and improving the corporate performance of any
company:
Q1:
Which are the critical success factors (CSFs) enabling the design and good
operation of strategic controls to establish the performance framework and
ensure the improvement of the performance of our company?
Q2:
How do we target our bottom line and continuously improve our company’s performance?
Q3:
Do all our business functions/units meet the corporate financial and other
performance targets?
Q4:
How do our business functions/units translate corporate targets into measurable
actions?
Q5:
How do we monitor implementation of these actions and their impact on our
company’s profit and loss (P&L)?
My answer to the first question (CSFs)
is presented next.
2.
Critical Success Factors in Improving
Corporate Performance
The critical success factors (CSFs) enabling
the design and good operation of strategic controls are: management tools,
performance measurement culture, training, professional knowledge, top
management commitment, and modern reporting model. These are described below.
CSF
1: Management Tools. These include Policies,
procedures and systems of corporate governance related to organization,
financial management, human resource management, production, sales, IT
management, etc.
CSF
2: Performance Measurement Culture. This includes establishing
and enhancing the role of the performance management manager, adding resources
to the performance measurement teams with the appropriate skills, dexterities
and talents: financial management, sales, human resource management, IT systems
development and operation, production process management, customer support,
etc.
CSF
3: Training. Training and educating management
staff is a must to enable them to acquire and enhance their skills on the
analysis of all performance data (e.g., financial, customer, internal corporate
processes, employee learning and development, etc.).
CSF
4: Professional Knowledge. Very strong knowledge of
the given organization’s processes, the industry to which the organization
belongs, the culture of the said organization and its business operating model,
as well as effective inter-personal communication skills at all management
levels are also required.
CSF
5: Top Management Commitment. Very strong
commitment to performance is a must by all members of the executive board,
corporate leadership, top management, management committees, various
organizational committees, etc., and pursuing it to all levels (up, down,
across) of the given organization, corporate management, organizational units,
business functions, projects, systems, processes, stakeholders, etc.
CSF
6: Modern Reporting Model. The last CSF but also as important is an open and widely-distributed environment of information and know-how
exchange regarding performance, and the production and support processes and a
flexible, modern and continuously kept up-to-date reporting model for the
organizational performance, and for the consequences of the organization’s
operations on the greater environment,
society, economy, etc.
My answer to the other four questions
(questions 2 to 5) are contained in my book described next.
3. Improving Corporate
Performance with BSC
This book describes how to control better
and improve your Company’s Strategy and Performance with the Balanced Scorecard
Framework. It does this by identifying the concept and importance of strategic
controls, describing the types of strategic controls (such as financial,
output, IT, etc.), defining the roles and responsibilities of managers and
others in these, proposing a Balanced Scorecard Approach to Strategic Control
for all enterprises and organizations and providing examples of a Performance
Management Policy, a Corporate Strategic Plan, and a set of audit checklists
and Business Performance
Measures.
Contents
1. Introduction
2. What is strategic control?
3. The Importance of Strategic Control
4. A Balanced Scorecard Approach to
Strategic Control
5. Strategic Control Systems
6. Key Issues in Designing Strategic
Control Systems
7. Critical Success Factors
8. Types of Controls (Financial, Output,
Behavioral, IT)
9. Roles and Responsibilities
10. Strategic Controls – Examples of BSC
Implementation
11. Review and Audit Tools and
Techniques (Strategic Readiness Checklist (55 questions), Business Idea
Development Checklist (11 questions), Corporate Strategic Plan Checklist (15
questions), Generic Performance Audit Program (16 questions))
12. Conclusion
13. End Notes
14. Bibliography
Appendix 1: Performance Management
Policy
Appendix 2: Corporate Strategic
Plan-Example
Appendix 3: List of 42 Business Performance
Measures (for finance, sales, production, management and IT)
4. Further Resources
For more details, see:
1. Improving Performance with Balanced Scorecard
2. Examples of four BSC Case Studies
