Why Business Performance Management is still key in volatile times

by Jacqui Nelson  01-Feb-2016 at 12:03

Why Business Performance Management (BPM) is still key in volatile times by Alan Nelson

The world today is a more volatile place to do business in than ever before. Alongside increased economic uncertainty caused by greater and greater macro-economic interdependence, technology is forcing massive change in many sectors, at a rate never seen before, and people are expecting to have more control of their careers, changing jobs more frequently.

  

In every organisation I have worked in, there have been a minority of people who have doubted the benefit of business performance management. They typically cite uncertainty as the reason for their lack of enthusiasm: "I am getting new things thrown at me all the time, so what’s the point of planning when it’s all going to be wrong in 6 months’ time anyway?”

This has always seemed a weak argument to me. Yes we all have unexpected things thrown at us all the time, but if that is the case, how are we going to make sure we remain focused on what is really important, rather than just fighting short term fires, unless we have sat down and identified what the big things are and how we are going to measure progress against them. Of course the truth is that temperamentally I am the sort of person who likes to know where he is going. I am much happier with a clear plan that then gets changed than no plan at all because there is too much uncertainty.

However, with more change and more unpredictability, we need to be forensic in our thinking if we are to maintain our faith in business performance management. Simple statements and beliefs we might previously have taken as read, need to be evaluated more critically. As an example, the following two statements seem so self-evidently true as to be almost mom and apple pie:

  1. In a dynamic environment we need to be able to respond rapidly to opportunities and threats. Dynamic organisations that can adapt quickly will gain an advantage over their competitors and avoid the damaging consequences of change.
  2. The best organisations are constantly looking for ways to optimise their performance, embodying a culture of continual incremental improvement to maximise efficiency and achieve and maintain a leadership position. 

Few people would argue with either of those. But in times of high volatility, it becomes clear that the two are difficult to reconcile. Organisations committed to incremental improvement will tend to resist dynamic changes to their processes because they will see them as discarding progress they had previously made. Organisations that embrace dynamic responses to external forces risk throwing out good processes and systems along with those which need to change.

The response to this lies in our understanding of the detail of our business processes. Several times in my career I have noticed that it is only at times of significant change that you find out who really understands what they are doing and why. People who have hitherto been good at their job are suddenly unable to decide how to change. They were good at following established practices, but lack a deep understanding of the dynamics of the business processes and are therefore unclear what to change and how. They tend either to cling onto old ways of doing things for too long, or to change things too radically, losing along the way the key things that made the business successful.

So the message is simple: at times of rapid change, make sure you understand the business processes, where value is created and how, and develop a plan for what needs to be changed and how to react to the opportunities and threats of the changed business environment.

Easy to say that is – I never said it was easy to do!

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