Engraining a Business Performance Process and
Published in the Houston Business Journal in
Manuel J. Perez de la Mesa, Director,
Chief Executive Officer and President, SCP Pool Corporation,
a $1.6 Billion distributor of swimming pool
supplies and equipment.
Ravi Kathuria, President, Cohegic Corporation
Perez de la Mesa
Most organizations understand the importance of
measuring and managing business performance.
However, engraining within the organization a
systematic and repeatable mechanism for managing
business performance is a difficult challenge.
Performance management systems are sometimes seen as
an administrative burden, a distraction to making
Engraining a performance management process and
culture requires special attention to several
aspects - four of them are 1: Value in decision
making; 2: Holistic application across the board, 3:
Advancement of the strategy; 4: Integration with
resource allocation and individual advancement.
Value in Decision Making
Business performance systems typically highlight
financial or operational data that the executives
are already intimately familiar with and hence add
marginal value. The performance system must bring
forth a new insight and deliver information that was
previously unavailable or overlooked.
For instance, sales dashboards include metrics such
as size of the sales pipeline, win-ratio and sales
cycle-time. However, increasing insight into the
sales process requires additional information -
quality of the opportunities in the pipeline (a
large pipeline with poor quality opportunities is
futile), the efficacy of the sales drivers (which
sales drivers are contributing to wins and how is it
changing) and the efficiency of opportunity
qualification (how quickly are undesirable
opportunities being eliminated). Such insightful
information adds value to decision making and leads
to inherent adoption of the performance system.
Holistic Application across the Board
A holistic approach delivers a unifying message
across business lines and functional groups. Sales
and manufacturing cannot be measured to extremes
while marketing, product/service development and
internal support services are measured lightly. The
objectives and metrics across all the groups must
align with each other and with the corporate goals.
Coherence across groups is the key to success.
The holistic viewpoint must include a company’s
suppliers, customers, partner organizations and the
community. It is important to ensure that the design
of metrics reflects customer interests and
viewpoints. A holistic approach ensures that the
performance improvements do not happen in a lopsided
Advancement of the Strategy
The performance system’s most important objective
must be to advance and evolve the strategy. It must
provide an early indication of trends and the status
of activities that are critical to the strategy.
Which message is resonating with buyers? Which
product/service features does the market like
compared to the competition? Where is the easiest
market penetration and why? At what pace is the
organization increasing its value proposition to
clients? At what pace is the organization improving
its internal processes, systems and capabilities?
Integration with Resource Allocation and Individual
The performance system must drive allocation of
resources – financial (budgeting), skills (people)
and executive time and focus. Performance must be
the only criterion that drives further investment –
top performing projects get more resources, poor
performing projects get resources taken away.
Performance must also be the key determinant in the
way executives and employees get compensated,
promoted or discharged from the organization.
Tenure, influence and authority must not be allowed
to become factors in such decisions. Performance
should be the mantra. Of course, the criteria for
performance must be carefully selected as it will
now heavily influence behavior.
Focusing on the above factors will make the
organization take the performance system seriously
and engrain it in its way of doing business. An
engrained performance system will then become a
highly potent tool for the organization to deliver