Financial Management

17Institutionalizing Performance Management

In earlier chapters in this part on enterprise performance management (EPM), we covered the importance of stating objectives and developing a context. We then outlined best practices in selecting key performance indicators (KPIs) and building dashboards. We now turn to the process of institutionalizing performance management (PM), that is, successful implementation and integration into all critical management processes. This step is the final, and arguably most important, aspect of successful EPM. If the PM is not integrated with other management processes, it will not be successful.

FIGURE 17.1 Establishing a Performance Management Framework

GAINING TRACTION

There are several critical steps that are necessary to effectively adopt EPM (see Figure 17.1). These include obtaining executive support, communication and training, using performance improvement tools, and developing a delivery mechanism.

Executive Support

Few initiatives are successful in a company without the passion and support of the CEO, CFO, and other members of the senior management team. Managers and employees are very adept at reading the level of commitment of leadership to any new project. Senior managers must support PM in both word and action. The CEO will determine the ultimate success of PM. Is he insisting on a review of dashboards and key performance ...