Archive for July, 2011

Initiatives for sustainable organizational performance

Saturday, July 30th, 2011

smartKPIs.com Performance Architect update 42/2011

Continuing the exploration of ways for organizations to do more for biodiversity and environmental sustainability, here are three novel initiatives that may be established by any organization:

  1. Adopt a threatened animal species, plant species and habitat. In addition to the donations allocated to programs dedicated to their protection, such an approach would also raise awareness with both internal and external stakeholders. It would have a motivational factor for staff, knowing that through their work they do something for giving back to the environment. Thus, the company sponsored animal species and company sponsored plant would be symbols of organizational concerns towards the environment and complement their business driven role.
  2. Launch of a product or service with all profits generated through its sales donated to non-profits running programs focused on sustainability issues. A number of such examples already exist, with proceeds dedicated to humanitarian or research causes. Dedicating such an initiative to environmental causes, would complement the emphasis put on Corporate Social Responsibility.
  3. Donate 1% of revenues to environmental causes. Established in 2002, 1% for the Planet is a not-profit organization that has established a network of over 1,400 companies across 44 countries willing to allocate at least 1% of revenues (top line sales) directly to non-profit organizations focused on issues of sustainability. The donations can be allocated to non-profits selected from a list of over 2,600 pre-approved non-profit organizations from around the world. Not surprisingly, most of the companies that have committed to this cause are privately held.

Through such initiatives and similar other ones, organizations can gradually bridge the separation between business and environmental/sustainability issues. Protecting the environment should be seen as part of the business, built in the business model. Success stories such as Interface demonstrate the benefits of such approaches. However corporate environmental initiatives should not be seen as something that is in scope for large companies and market leaders only. Each organization, small or large has a footprint that should be acknowledged and compensated for. A change of mentalities and business models may be necessary for such a transition, enabling smaller, more agile companies to be at the forefront of such a change.

In addition to the organizational level impact, a secondary benefit of such initiatives is at individual level, as awareness in sustainability issues would cascade down from organizational level to employee level, thus being amplified through social networks. Ultimately both individuals and organizations have a footprint on the environment and a shared sense of responsibility should exist at both levels.

 

Aurel Brudan
Performance Architect,
www.smartKPIs.com

Customer Relationship Scorecards – insights from Infosys Technologies

Wednesday, July 27th, 2011

By attending the Balanced Scorecard Forum Dubai 2011, the smartKPIs.com team gained insights regarding performance management practices in leading organizations around the world. Such an organization is Infosys Technologies from India, a pioneer in what concerns the development and use on Customer Relationship Scorecards.

The discussion with Mr. Sanjay Purohit, VP Corporate Planning and Business Assurance at Infosys, reveals insightful findings regarding:

  • How the idea with the Relationship Scorecard emerged and how it is used within the organization;
  • How the Scorecard has helped Infosys;
  • What are the main challenges in using it.

We invite you to watch this video and find out the answers to these questions and more on relationship performance management:

Note: smartKPIs.com thanks Mr. Sanjay Purohit, VP Corporate Planning and Business Assurance, Infosys Technologies, for having made possible the realization of this interview.

Information Optimization – IT Performance Management

Tuesday, July 26th, 2011

Executive Scorecard: Vice President of IT Operations,     Source: www.hp.com, 2011

According to a recent press release, HP announced that it has launched a new software suite to operationalize measure and improve IT performance. Tech Directors require standardized instruments that measure efficiently and improve performance. Having a comprehensive overview of IT performance enables Chief Information Officers (CIOs) to deliver an Instant-On Enterprise which incorporates everything he does in order to serve customers, employees, partners and citizens with all they need, instantly.

Today, most key performance indicators (KPIs) for IT systems are widely dispersed and collected by using different methods. This is creating management deficiencies which may slow responses to changing priorities and market circumstances.

CIO Assessment and Cloud Assessment tools help clients quickly evaluate their current level of IT Performance Management maturity.

HP’s IT Performance Suite is swiftly proving critical to the success of CIOs and the VP of IM in particular because it provides control and visibility into information across the enterprise.

Reference:

HP Press Release (2011), HP Unveils Performance Suite for the Instant-On Enterprise, available at: http://www.hp.com/hpinfo/newsroom/press/2011/110601xa.html

Employee engagement measures score low – What’s Working™ study

Monday, July 25th, 2011

What’s Working™, a recently conducted US survey  (Mercer, 2011), indicates that nearly one in three (32%) workers is seriously considering leaving the organization now, the rate increasing sharply from 23% in 2005. Mindy Fox, Senior Partner at Mercer & US Region Leader mentioned that “the business consequences of this erosion in employee sentiment are significant, and clearly the issue goes far beyond retention. Diminished loyalty and widespread apathy can undermine business performance, particularly as companies increasingly look to their workforces to drive productivity gains and spur innovation”(Mercer, 2011).

The study results reflect that:

  • Only 43% of US employees believe they are doing enough to financially prepare for retirement;
  • Only 68% of employees rate their overall benefits program as good or very good, down from 76% in 2005, while 59% say they are satisfied with their health care benefits, down from 66%;
  • Base pay, the most important element of the employment deal, is less satisfying for employees (53% satisfied with base pay, compared with 58% in 2005);
  • Scores for career development and performance management improved compared to the study results from 2005, remaining however low: only 42% of employees today agree that promotions go to the most qualified employees in their organization, up from 29% in 2005, while 46% agree that their organization does an adequate job of matching pay to performance, up from 33% (Mercer, 2011).

Key measures regarding employee engagement registered low scores also, while intention to leave the organization is up across all employee segments, with the youngest workers most likely to be looking for a departure – 40% of employees age 25–34 and 44% of employees 24 and younger:

Key engagement measures show consistent decline among US workers

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Sustainability as a strategic theme or Balanced Scorecard perspective

Saturday, July 23rd, 2011

smartKPIs.com Performance Architect update 41/2011

In two of my previous blog posts I addressed the link between biodiversity, sustainability and performance, raising questions around the role each organization has in addressing these issues. Companies such as Interface have demonstrated that efforts to reduce carbon footprint and environmental stewardship practices are rewarded by customers and the stockmarket. Such examples are for now exceptions and more can be done to embed sustainability practices in organizations. Besides theory and rhetoric, there are a number of practical ideas that are worth exploring:

  • At a business philosophy level, environmental concerns need to be at the core of the business model and not be seen simply as a marketing / public relations stunt. Sustainability is today a key value driver of organizational performance.
  • Environmental / sustainability statements elements should be used across organizational performance management systems and not in isolation. While specific organizational wide environmental plans and reports are useful, elements of environmental rhetoric should appear in mission and vision statements, values and other elements of the corporate identity. Being at the core of who and what the organization is, sends a strong message both internally and externally.
  • Environmental / sustainability components should also have a prominent role in the organizational strategy. While many organizations have objectives and KPIs dedicated to these aspects, there is merit in considering sustainability a dedicated strategic perspective. The traditional approach of grouping organizational Balanced Scorecards in strategic perspectives is structured around: Financial, Customer, Internal Processes and Learning & Growth. One of the most powerful catalysts of increasing this profile is the inclusion of a sustainability perspective in addition to the traditional four perspectives of the Balanced Scorecard. Ultimately organizations don’t operate in a vacuum, as the environment influences their activity. A possible name for it is Corporate Environmental Responsibility or Sustainability, with objectives related to aspects such as: nurturing biodiversity, footprint reduction and community support.
  • A less drastic alternative to establishing a sustainability perspective is the use of a strategic theme that cuts across organizational strategy (and Strategy Map), linking sustainability related objectives and KPIs. A benefit of this would be a clear articulation of the financial support dedicated to sustainability aspects, as a subset of the financial perspective.

Some might say “we are in the business of making money for our shareholders”, however as the current system of ensuring biodiversity and sustainability is failing, perhaps the role of companies in this context needs to be revisited. While many programs are underway in organizations around the world, more can be done in terms of inclusion of staff across the organization, as well as inclusion of organizations of all sizes in aligning their performance management system with sustainability.

 

Aurel Brudan
Performance Architect,
www.smartKPIs.com

Business Analytics in Manufacturing

Thursday, July 21st, 2011

Businesses, from the production sector have more data than ever before, stored in more than one system and places, are used in different ways. Progress in information technology has fueled this explosive increase opportunity both in creating fresh ways for producers in order to reach new markets and clients and complexity in an effort to collect, manage and interpret data and information which can help guide them through success.

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On measuring the performance of the Marketing department

Wednesday, July 20th, 2011

Source: Global Growth – jscreationzs

A performance report becomes functional by using KPIs that illustrate the business context and by which action can be identified or labeled worth trying.

When choosing a KPI it should fulfill one of the following categories (Shevlin, 2007):

  • To have the ability to explain. Do your KPIs help explaining why something has happened?
  • To be predictable. Can a KPI predict what will happen in the future within the company?
  • Behaviour change. The measurement of a KPI makes people to act or to behave in a particular way?

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KPIs in job ads: Purchasing Coordinator for Jotun Paints Europe Limited

Tuesday, July 19th, 2011

Underpinning the ubiquity of KPIs across industries and functional area, an increasing number of job ads include mentions of KPIs as required capability or elements of job description. The example below is illustrative:

Jotun Paints Europe Limited is seeking a Purchasing Coordinator which will be based in Flixborough, Scunthorpe working within the Paints sector with a supply base including Offshore & Industrial Sectors.

Recruiter Jotun Paints Europe Limited
Posted 14 July 2011
Ref MPYC13178522Z
Location Yorkshire – Flixborough/Scunthorpe
Job Level Co-ordinator / Controller
Specialist Area Purchasing, supply (main)
Sector Private sector
Contract Type Permanent
Hours Full Time
Salary Competitive Salary + Package

Job Description

As Purchasing Coordinator you will report directly into the Commercial & Purchasing Manager, the position will carry out all aspects of the Purchasing Process& will be part of the Finance Function based at the UK manufacturing facility and headquarters in Flixborough. (more…)

Driving shareholder return through business execution

Monday, July 18th, 2011

SuccessFactors, Inc., a global company specialized in business execution software, recently published the results of the study “How Companies Leverage Business Execution Software to Drive Excess Shareholder Return”,  completed in collaboration with The Wharton School, University of Pennsylvania and Graduate School of Business at Stanford University. This study shows that companies tend to achieve higher industry-adjusted stock returns when they set and align goals, rate users on the achievement of these goals, used more variance in performance feedback, and leverage business execution software to increase their ability to execute (SuccessFactors, 2011).

Source: SuccessFactors (2011)

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Milton Friedman, Interface and performance ecosystems

Saturday, July 16th, 2011

smartKPIs.com Performance Architect update 40/2011

There is widespread awareness today about the climate change and other environmental issues we are facing today at a global scale. In a simplistic way, I would categorize companies in three categories: the ones that don’t care, the ones that do something about it and the ones in the middle.

Perhaps the largest group is formed of the companies that don’t care, adepts of the principle that there are out there suitable institutions (government, UN bodies) to do something about these issues.  This group is embodied by Milton Friedman’s quote in his notorious 1970 New York Times Magazine article, The Social Responsibility of Business is to Increase its Profits:

“There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Unfortunately, human behaviour oftentimes has difficulties with finding a balance and all too often issues with traffic of influence, deception and fraud emerge as unwanted consequences of the profit driven behaviour.
Many organizations are doing something about it. At the forefront of sustainable business practices is Interface, the world’s leading producer of soft-surfaced modular floorcoverings. Its mission embodies an emergent approach to sustainability as a value driver for the business:

“Interface will become the first name in commercial and institutional interiors worldwide through its commitment to people, process, product, place and profits. We will strive to create an organization wherein all people are accorded unconditional respect and dignity; one that allows each person to continuously learn and develop. We will focus on product (which includes service) through constant emphasis on process quality and engineering, which we will combine with careful attention to our customers’ needs so as always to deliver superior value to our customers, thereby maximizing all stakeholders’ satisfaction. We will honor the places where we do business by endeavoring to become the first name in industrial ecology, a corporation that cherishes nature and restores the environment. Interface will lead by example and validate by results, including profits, leaving the world a better place than when we began, and we will be restorative through the power of our influence in the world.”

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Industry Job: Director of Performance Management for the Los Angeles Unified School District

Thursday, July 14th, 2011

Los Angeles Unified School District

The Los Angeles Unified School District (LAUSD) is seeking a visionary leader with considerable experience directing and leveraging performance management systems in a public education environment to join their team. (more…)

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