Corporate Performance Management
There is a fair amount of jargon to keep up with when it comes to governance, risk and compliance (GRC), business intelligence and strategy. One of these is corporate performance management (or CPM). Not to be confused with human performance management which revolves around the success of the individual, the concept of corporate performance is concerned with the success of the organization as a whole.
In this article we’ll discover what it is, why it matters and how to implement a successful CPM framework using modern solutions.
What is corporate performance?
Corporate performance is the blended analysis of how well a particular organization accomplishes its goals. These goals are highly dependent on the organization, but tend to fall within the set categories of financial, market and shareholder performance.
Each organization must set their own corporate performance targets. Once set, a system to track, assess and meet those targets must be implemented. This is where corporate performance management comes into play.
What is corporate performance management?
Corporate performance management (also known as business performance management, enterprise performance management, or even enterprise and corporate performance management) is a combination of all the methodologies and processes that you use to drive success within your organization. In the same way that human performance management focuses on the successes and failures of an individual, corporate performance management focuses on those successes and failures within the organization.
CPM is also an element of business intelligence, which uses data, analytics and best practices to ensure that organizations make solid, data-driven decisions. CPM then becomes the framework to action and manage those decisions that lead to organizational success.
Methodologies Employed in CPM
Corporate performance management methodologies are varied. But all take into account a variety of organizational viewpoints, including learning and growth, business processes, customers and finance. The methodology an organization employs will also have key performance indicators to measure the success of the framework, and ensure that it’s working for the benefit of the organization as a whole.
It’s important to remember that corporate performance management is essentially a compilation of intelligent business tools that help organizations to measure and improve their performance. These business tools can include balance scorecards, which compile several organizations’ perspectives, trend and strategy mapping, KPIs, the EFQM Excellence Model (a model that highlights the actions of competitive organizations) and the Six Sigma (a framework that eliminates organizational defects).
How is corporate performance management different from human performance management?
The two concepts are very similar, and are often confused. But human performance management (or HPM) falls under the human resources umbrella. It focuses on the individual’s successes and failures and ways to improve their productivity, satisfaction and capabilities. It also determines the best practices for performance-managing those.
On the other hand, corporate performance management falls under the umbrella of business intelligence. It’s focused entirely on organizational successes and failures and centers around your organization’s strategy. So the “management” element of CPM then is the framework that supports your corporate performance.
Why is corporate performance management important?
The importance of corporate performance can’t be understated. Organizational strategy is vital for all organizations, particularly in challenging times. It ensures that your strategic priorities are executed and the key drivers of the business maintained. In other words, that your corporate performance is managed.
At its most basic level, CPM is about information and strategy planning. In the first instance that means helping key team members to access information directly and easily so they can make strategic decisions and boost the organization’s performance. It also allows management to oversee the strategic actions and ensure that there are clear performance goals and actions taken to work towards them.
Strategy overall is so critical to organizations, and such a priority to C level executives, that many organizations have begun to put into place dedicated performance management departments. Teams within these departments are responsible for setting and maintaining strategic goals, aligning actions and projects to those organizational goals and analyzing and reporting on metrics and strategic communications.
Benefits of CPM
Corporate performance management benefits include:
- Creating a clear understanding of the organization's positioning
- Providing decision makers with accurate and timely information
- Combining the management process in a single, interactive and collaborative work space
- Standardizing and automating processes to streamline the collection, aggregation and reporting of data
- Improving data security and corporate governance performance
- Providing greater transparency and visibility within the organization
- Reducing operational risk
- Reducing planning, forecasting and reporting time
- Integrating business strategies, measures and actions
- Increasing performance effectiveness
Learn more: Corporate Performance Measurement
Top challenges faced in corporate performance management
Interestingly the challenges faced in corporate performance management are not too dissimilar to those faced in human performance management, especially when you think of the organization as an entity in and of itself.
Poor strategic design
Too often organizations understand the need for a corporate performance management framework, but not how to implement it to fit the specific needs of their organization. Research, organizational mapping, consultation with management and stakeholders are all vital for the success of the CPM.
Set and forget
Performance management must be a continuous process of strategic analysis and associated actions. It should not be a set and forget activity undertaken once, or even once or twice a year. As the business environment changes, an organization must change as well, in order to optimize its performance.
Lack of leadership buy in
All leadership within an organization must buy into the process of corporate performance management, and view it as an integral part of the company’s strategy. They must be involved in setting the strategic direction, aligning the actions, reviewing incoming data, monitoring ongoing performance and flexibly responding to changes in the business environment that impact strategy and performance within the organization.
Failing to prioritize change management
Strategic change management is a vital part of CPM. Strategic change management is the process of managing change in a way that prioritizes the organization’s goals and objectives and carefully manages resistance. When it isn’t prioritized, then all change implementation becomes haphazard and ad hoc, which undermines organizational strategies.
Failure to integrate
Any corporate performance management system must be well integrated with business intelligence, human performance management systems, resource and enterprise risk management systems, organizational culture and structure, as well as systems and processes. Without this integration CPM simply won’t function in the way that it should and you’ll be in danger of risk management failures among others.
How to choose an effective corporate performance management software solution
Your corporate performance management software solution must be a modern approach to your CPM needs, such as TriLine GRC by Ansarada. To be effective it needs to act as a central hub for all the elements that you might otherwise be accessing via a variety of different business tools.
It also needs to be fully integrated with your risk management and compliance, and give you true insight through data capture. It needs to do the hard work for you, through automation and tech, so you’re freed up to manage the bigger strategic picture. It must be intuitive and adaptable, versatile and scalable to suit your organization’s growing performance drivers. And it must be evidence driven, so that every task and action undertaken is trackable and auditable.
What to look for in a CPM solution on a macro level:
- Primary goals are articulated and easily understood across the organization.
- All the elements that play into your organization’s overall strategy and performance objectives are aligned within the solution.
- The solution offers automation and infrastructure that ensures information is gathered and accessible as required to implement the overall strategy.
- It asks the right questions to the right people at the right times (known as Collection of Key Performance Questions).
- It allows for data collection and analysis which supports learning and change management into the future.
What to look for in a CPM solution on a micro level:
- Real time feedback
- Actionable data consolidation
- Integration of risk management
- Highly accessible to relevant stakeholders
- High degree of collaboration