A Business Performance Program helps you
hit your targets by focusing everyone's efforts... and getting all
hands pulling together.
The Business Performance Program outlined on this page is a
powerful, proven management tool.
The heart of the program focuses on tracking and
reporting operational performance.
The program is known by various names in the
companies where I have advised on the program's implementation. Some of these
program names include:
- Performance Monitoring
- Performance Trending
- Performance Trending and Benchmarking
- Performance Measurement
- Operations Trending
- Monthly Trending
By these and a few other names, the Business Performance Program
has played a
major role in delivering dramatic turn-arounds in performance at a number of
This Business Performance Program works well when it is
implemented by the operational head of a corporation or of a major
Therefore, this outline speaks directly to the Chief Operating Officer.
This article also assumes that your organization has an
annual and strategic goals program in place. Hopefully, you publish the goals
for use by all personnel in an annual business plan or similar document.
To be successful, the Business Performance Program requires commitment on the
part of the top three levels of management (you, your directs, and their
directs). When you are committed to the program
and use it in your daily activities, they will quickly adopt the
Use the program's graphics in your meetings with directs,
with your board of directors, with regulators, and in all-hands meetings.
Make achieving the levels of performance targeted in the
Business Performance Program a part of the basis for incentive compensation.
A couple of gentle hints that you expect everyone in the
organization to be aware of current performance and committed to achieving, and
then exceeding established targets will
You could use the method one Division President used...
After his program had been in place for about two months,
he went out near the cafeteria on the day prior to the meeting at which he and
his directs would review the next performance report.
There he struck up a conversation with a
couple of maintenance workers.
He asked them what they thought of the new performance
report. Predictably, they had never heard of the program. He then invited
the curious maintenance workers to his office and went through the report with
Later that day the president's assistant had occasion to
talk with several department heads, and mentioned the incident to them. The
story was soon all over the division.
At the meeting the next day, a VP asked the
president about the incident. In a low-key manner, the president told the group
that he would be "very disappointed" if he received a similar
response the next time he asked a front-line employee about the program.
That Business Performance Program was quickly the
yardstick of success throughout the organization.
The primary components of this performance tracking program are:
- Goals and targets
- Performance indicators (data tables and charts)
- Reports (electronic and hard-copy)
Progress toward achieving each annual goal is tracked by
one or more performance indicator. In addition, several indicators and targets are identified to
track performance in other important areas.
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and have Google start putting money in your bank account!
You should be able to cover critical areas with about
thirty performance indicators. (Keep them simple.)
This should result in each department head having
responsibility for a couple of indicators Assign ownership of the various
indicators to these department heads.
Each performance area will (hopefully) be impacted by the
actions of other departments. For instance, the Training Manager may have a
goal related to "Scheduled Training Participation." This manager
needs other departments to schedule and then actually send the people for
Your department heads quickly see that they get
cooperation in achieving their targets by supporting others in achieving their own targets.
Another area of responsibility for department heads is
data reporting. Establish a firm schedule for data reporting.
Most of the players have been mentioned above, but I need
to clarify that...
- You are the Business Performance Program sponsor and primary customer.
- You, your direct reports, and their directs, as a
group, review each monthly performance report draft.
- You, your direct reports, and their directs, as a
group, review modifications to indicators. (Avoid mods that destroy
trends or complicate the indicator.)
- Your direct reports and their directs, individually,
are the performance indicator owners.
In addition, in most programs each indicator has a data
source (from the owner's staff), named by the indicator owner who is responsible
for timely and accurate data reporting.
Who will be responsible for daily operation of your performance
Most organizations use an admin support group that is
also responsible for:
- Building presentations for you and your officers
- Crunching numbers for officers
- Industry performance reporting and benchmarking
This group will build the individual indicators using
spreadsheet software and work with the indicator owners and officers to define
and build each indicator.
will then incorporate the indicators into a report format, with a summary page
similar to the one below.
The admin group is also responsible for developing an annual schedule detailing the
dates and times that data is due, plus subsequent review and publication dates.
(Publication should be within ten days of the month end. Stale
information is seen as less important.)
Once the Business Performance Program is set up, the following sequence occurs
The admin group receives monthly
data from each owner's data source, updates the indicator, and provides a draft
of the updated indicator to the owner and data source.
The indicator owner reviews the update and responds to
the admin group with any corrections, and assigns a tentative color code to
be used on the summary page.
The admin group prepares a draft report of all indicators
The admin group's next task is hosting the monthly meeting, where all
officers and indicator owners review the draft report, make corrections, assign
final color codes, and
approve publication of the report.
Publication and distribution of each month's report to all sections is then
completed. Usually, officers and department heads receive an electronic copy and
a bound hard copy. Electronic distribution is then made to all
supervisors/section heads for use in staff meetings.
The actual indicators will vary according to the business and its needs.
Some will need to place emphasis on finances and sales, others will emphasize
finances and production.
Each indicator should consist of a data table and chart. Charts provide pictures of actual performance vs. targets and
quickly and effectively.
Data tables drive the charts and keep your "numbers people" happy.
Here's an example of a data table and its chart.
Basic indicators should include:
- Safety Performance
- Employee Industrial Safety (OSHA Recordable Injuries)
- Contractor Industrial Safety
- Equipment Tagging and Clearance Events
- Regulatory Performance
- Corrective Actions
- Financial Performance
- Production Cost
- O&M Cost
- Capital Improvements
- Materials Cost
- Inventory Value
- Overtime Cost
- Staffing Level
- Sales Performance
- Revenue By Product
- Units By Product
- Gross Margin
- Customer Satisfaction
- Plant Performance & Reliability
- Plant Capacity Factor
- Plant Forced Outage
- Schedule Adherence
- Environmental Performance
- Hazardous Waste
- Solid Waste
- Liquid Waste
- Scheduled Training Participation
- Human Errors
- Minority and Women Vendors
And there you have the outline of a Business Performance Program
that works. Modify it to fit your organization and industry.
performance program link offers additional resources.
A web search using
the keyword phrase set up a business performance program will lead you to
more resources. Be sure to notice the relevant ads down the right side... those are resources
Mission Statement Page
They don't have to be fancy or complicated to be effective.
Business Performance Page
Performance indicators for Small Business
Critical performance indicators for web site businesses
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