Saturday, January 14, 2017
Critical Success Factors in Improving Corporate Performance
By John Kyriazoglou
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.
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))
13. End Notes
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