Growing Your Business with the Right Business Performance Management Strategies

What Is Business Performance Management (BPM)?

Business Performance Management (BPM) refers to the processes, methods, metrics, and tools that help you manage and evaluate the performance of your business. It involves setting goals, measuring progress, and making adjustments to ensure that your company is moving in the right direction. In simple terms, it's like having a roadmap that guides you toward your business objectives, with clear indicators to show if you're on the right path.

What is not BPM?

BPM is often thought to be tracking metrics on a dashboard. Simply identify a number of metrics to track and follow up on the metrics in weekly team meetings, and all is well.

This is far from the truth. BPM strategies should not just revolve around tracking numbers. In fact, for it to be effective, BPM should be tightly aligned with your yearly corporate goals, and integrated into all levels of planning, execution and compensation within your organisation. By implementing effective BPM strategies, you can ensure that every team member knows what they are working towards and how their efforts contribute to the overall success of the company.

Why Business Performance Management Strategies Fail

Unfortunately, even with the best intentions, many companies struggle to see growth despite implementing BPM strategies. These failures often stem from several common pitfalls. Let's take a closer look at these:

Relying on readily available metrics

You may be tempted to just pick one or two easy-to-track metrics. These metrics are often right there on your dashboard, making them a breeze to start monitoring. However, this lazy approach can lead to big problems.

By focusing on just a couple of readily available metrics, you might lose sight of what truly drives your goals. When these metrics start to fluctuate, it becomes tough to tell which changes actually matter. This could turn into a frustrating game of whack-a-mole, where you're constantly trying to fix every little dip or spike—whether it’s important or not.

In the end, this scattershot approach makes it hard to truly control your company’s progress. You might find that despite all your efforts, you’re not moving closer to your business goals at all. 

Building metrics and dashboards that with little relevance to the overall goal 

The flip side is building too many metrics and dashboards. It’s easy to get caught up in building fancy dashboards and tracking endless metrics. 

The problem? Not all these metrics are created equal. Some might measure aspects of your business, but they don’t necessarily connect to your overall goals. They may cloud your judgement and prevent you from making key decisions for your business.Worse yet, without a clear understanding of how these metrics influence your business’s  success, you might find yourself overwhelmed and distracted.

Misaligned goals with employees

As you implement updated vision and goals in your organisation, you may fail to update the employee’s compensation plan and performance criteria to be in line with the new direction. The misaligned goals with employees can be a real stumbling block in achieving the growth you want to see.

When goals aren't aligned, employees aren't incentivized to work toward the new direction. This lack of alignment becomes a significant barrier to achieving their growth objectives. As a result, you might find it challenging to implement the new strategies across the organisation.

Without clear and connected goals, employees can also feel out of sync with the company's vision. This misalignment often leads to a drop in motivation. The result? You have a team that lacks cohesion and isn't pulling in the same direction.

What Can Business Leaders Do?

The good news is that these pitfalls are avoidable with the right approach. Here are some practical steps to implement business performance management strategies that drive growth in your business:

Integrate BPM in your vision building and goal setting

BPM is a powerful guardrail, driving every aspect of your business to your vision and growth goals. However, a successful BPM strategy is not an afterthought strategy. BPM strategy needs to be considered in the vision setting in order to be your powerful ally. 

As you craft your vision and growth direction, be mindful of the factors that could drive growth. As this requires intricate details of the business as well as market environment, work with your leadership team strategy lead to recognise the area of growth, and break the vision down to stages. This step is key in bringing structure to your vision, on which BPM could leverage to track progress, measure effectiveness, and incentivise actions from your employees

Define metrics-that-matter

With your goal and actionable in place, the next step is to set key metrics to track your progress. These metrics serve as indicators that show whether you're moving in the right direction

It's important to focus on setting a single, well-chosen metric that encapsulates the essence of your objective. This metric should provide a clear and concise picture of your progress. By honing in on one key metric, you avoid the pitfalls of being overwhelmed by too much data or losing sight of what's most important. 

Once these are in place, identify other areas within your company that could impact these core metrics and track them as well. Once these metrics are well-established, identify other areas within your organisation that could influence them. Track these submetrics, ensuring they align with and contribute to the core metrics. This way, you create a cohesive system where submetrics naturally support and roll up to the core metrics, giving you a comprehensive view of your business's performance.

For instance, if your key metric is customer acquisition cost, you should also monitor metrics related to marketing spend, lead conversion rates, and customer retention. These secondary metrics provide context and help explain why your core metric behaves in certain ways.

This approach is crucial for two main reasons:

1. Prioritise What Matters: Focusing on a few key metrics helps you avoid becoming overwhelmed by data. Instead of tracking every possible metric, you concentrate on the ones that directly impact your goals, allowing you to make more informed decisions.

1. Ensure Logical Consistency: By tracking a set of related metrics, you create a logical framework that connects different aspects of your business. This makes it easier to understand how various factors influence your key metrics, enabling you to respond more effectively to changes and trends.

Set up reporting and analytics tools

To achieve your business goals, consider using dashboarding tools that focus on key metrics. Create a dedicated dashboard for your specific objectives, ensuring it displays both core and submetrics on a single page for easy reference.

For large organisations, collaborate with your data engineering and analytics teams to build the necessary data pipelines, analytics, and visualisations. This approach ensures your dashboard provides the insights needed to drive success.

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Set relevant operation cadence

To ensure your team achieves growth goals alongside their business-as-usual (BAU) targets, it’s crucial to establish a relevant operations cadence as part of BPM strategy. This includes setting specific meeting schedules with key team members to regularly review progress and highlight blockers, and establishing trackers and dashboards to foster accountability and stay aligned on goals.

For more complex or ambitious growth initiatives, consider forming a special project team. This team should be made up of members from various departments, each contributing their expertise. The project team should define its own goals and hold weekly check-in meetings to maintain momentum. To stay informed without micromanaging, request a bi-weekly report from the team, ensuring you’re kept up to date on their progress.

Align Employee Goals with Overall Metrics

Ensuring that company goals are effectively communicated and aligned with individual employees is crucial for driving motivation and achieving success. When employees understand how their work contributes to the bigger picture, they are more likely to be engaged and committed.

To distribute goals effectively, it’s essential to assign responsibilities that employees can realistically achieve. Set goals according to the employee’s strengths, skills, and current workload. Also, set realistic goals to allow for more accurate tracking of progress and provide employees with a clear roadmap to success. Misaligned or unrealistic goals can lead to frustration and decreased motivation, ultimately harming overall performance.

A well-structured compensation plan is also vital. By tying compensation directly to goal attainment, such as using percentage-based multipliers for bonuses, you create a clear financial incentive for employees to reach their targets. This not only drives performance but also reinforces the connection between their efforts and rewards.

Similar goal distribution guidance can be applied to teams and departments as well.

Ultimately, when employees see how their work contributes to the company's success and are fairly compensated for their efforts, they remain motivated, engaged, and focused on achieving shared goals.

Conclusion

Business performance management is not just about tracking metrics—it's about turning your company's vision into reality through clear, actionable goals. By integrating BPM into your goal-setting process, defining the key metrics that truly matter, implementing effective reporting tools, and maintaining an operational cadence, you ensure that your team stays aligned and motivated. This creates a robust performance management framework that propels your company toward sustainable growth.

Ultimately, business performance management provides the strategic guardrails that keep your company on course to achieving its vision. With the right strategies in place, you can confidently navigate the complexities of the business world and secure long-term success.