Measuring Business Success
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1.562.860.8637 [email protected] www.cpSphere.com ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS Measuring Business Success – Business Performance Management System
description
You know how to create the business plan. Now learn how to WORK THE PLAN.See how to measure corporate performance, and tweak/adjust your strategy based on real feedback
Transcript of Measuring Business Success
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Measuring Business Success – Business Performance Management System
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
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Delivering Next Generation of Solutions
cpSphere
17215 Studebaker Rd. Suite 390
Cerritos, CA 90703
1.562.860.8637
1.562.860.8611
www.cpSphere.com
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Agenda
Why measure Business Performance
What is Corporate / Business Performance Management
Strategy Map
Goals & Objectives
Scorecard – Key Performance Metrics
Initiatives
Review Process
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
I think I am doing everything right but my business is still not successful…….I wonder why????
No goals….everyone
doing their own thingLack of Direction Lack of focus
No Performance Management & Measurement System
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Why measure business performance ?
Supports Strategic
Planning & Goal Setting
Tracks progress towards goals using metrics
Improves accountability
Facilitates corrective actions
to address performance
gaps
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Business Performance Management System
Strategic Planning
Create Environment
For Change
Communicate Strategies
Define Goals
Implement Scorecard
Measure Performance
Track Progress
Identify & Eliminate Problems
Improve Processes
Evaluate and Adjust
Continuous Improvement
Redefine Initiatives
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Components of Business Performance Management System
Strategy Map – Road map to success
Goals & Objectives – Direction & Focus
Scorecard – Measurement & Communication
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Sample Companies who achieved significant success through Scorecard Implementation
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Success Story
• In early 1990’s Mobil Oil Corporation was ranked lowest in its industry & the business was not profitable
• In 1994, Balanced Scorecard was introduced and implemented for all the Marketing & Refining units
• In less than 2 years, Mobil achieved number one rank in its industry and its profitability was 56% above industry average
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Success Story
• BMW adopted Balanced Scorecard in 1998
• Their number of customers grew by over 200% within 3 years
• Their number of vehicles sold grew by 175% within 3 years
• BMW has been recognized for high level of customer & dealer satisfaction
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
FINANCIAL
what financial objectives must
we accomplish to increase
shareholder value?
CUSTOMER
How the customers perceive us?
What customer needs do
we meet?
INTERNAL
To satisfy our customers and
stakeholders, in which business
processes must we excel?
LEARNING & GROWTH
To achieve our goals,
what skills and technology we
need to improve?
Strategy Map – Four Perspectives
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Objectives
High Quality at Reasonable Prices Factor & Customer Intimacy
Excellent Customer Service
Increase Company Value
Sales Growth
Improve Profitability
Improve Customer Acquisition/Retention
Develop the Brand as Upscale Internet Presence
Improve Inventory Management Process
Relationships Management and Up selling Skills Improve Operational Skills
Integrate IT / Business Systems
Strategy Map – Road map to success
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Goals & Objectives - Power of Goal
• Colonel Harland Sanders was rejected by 100’s of restaurant owners before he came up with KFC
• Milt Campbell, an Olympic Athlete, had a goal to be “Gold Medalist”. He tried 4 times before he became a Goal Medalist
• Thomas Edison said he didn’t fail 10,000 times but he came up with 10,000 ways to product electric light
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
• Goals provides focus and ensures all the functions and elements of the organization are moving towards a
common destination
Goals & Objectives - Importance
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
• Objectives (from the Strategy Map)
• Key Performance Measures to track progress on the objectives
• Targets for the Measures
• Owners for the Measures
• Initiatives
Scorecard – Measurement & Communication
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Scorecard
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Key Performance Measures
Key Performance Measures are FACTS about the business which allow the Company to:
• F ocus efforts towards meeting Company’s goals
• A ssess quality of the core processes
• C lose gaps through corrective actions
• T rack progress towards company’s strategic plan
• S upport accountability and communication to the organization
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Targets
• Should be aligned with strategic plan and give organization a goal to aim for
• Targets are necessary because:
“If you don’t know where you’re going, you’re probably not
gonna get there.”
Forrest Gump
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Ownership & Accountability
• Assign owners to each measure who will be accountable for:– Tracking and Monitoring Actual results
– Eliminating Problems before they grow by taking timely corrective actions
– Defining and implementing initiatives to meet company targets
– Reviewing targets / initiatives periodically and revise as necessary
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Review Process
Scorecard is a “Living Document” which require regular reviews (monthly) and revisions (quarterly) as necessary
• How are we doing?
• Are we measuring the right things?
• Are the initiatives effective in achieving the desired results?
• Have the organizational goals changed?
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Next Step
• How would you apply Scorecard into your Business?1. Share company’s vision with your key staff.
2. Define strategy map and business goals / objectives
3. Develop Scorecarda. Performance Measures
b. Assign priorities
c. Assign Owners
d. Establish Targets
e. Track Actual
4. Develop initiatives for objective where significant gaps exist between actual and targets
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Exercise
• Create a Scorecard for a Super Market1. CA Based Super Market Chain with stores in CA only
2. Current Annual Revenue $150 million
3. Vision to be a National Chain in 5 years with $500 million in revenue
4. Attached is a Strategy Map
You have 30 minutes
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Super Market Strategy Map
1.562.860.8637
www.cpSphere.comITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
Did we all Get it?
CPSPHERE – HELP YOU FOCUS & GROW
