Strategic performance management is a term used frequently by most senior executives, to explain the process of managing and measuring organisational performance. With today’s corporate and governance regulations, there has been a surge of interest, not only to assist in the compliance of those regulations but also to classify, measure and manage the business ‘value drivers’.
Marr suggests, on the whole business leaders want to be able to understand how the value drivers, those drivers that are visible (tangible) and those that cannot because they are vague (intangible), help to deliver the competencies required throughout the business. What this will provide is a set of performance indicators for managers to effectively act upon, creating a performance-driven environment, using a measurement that everyone understands. Marr asserts that performance data ‘is used to learn, to validate or challenge strategic assumptions, to assess risks… and facilitate decision making and actions’.
In his book Marr provides tools and techniques about how to put strategic performance management into practice. He uses tools that make reference to organisational learning through concepts of psychology, and various theories of measurement. More importantly it is evident Marr has attempted to make the book accessible for any organisation, whether it is a small or medium sized business, large corporation, or public sector institutions.
In his analysis of intangible drivers, Marr refers to the fact that human interaction is not easily defined, thus it is necessary to take a more holistic approach to determine how they add value. The importance of using correct analysis and measurement tools are fundamental, it means then that more qualitative measures are needed, such as specific performance indicators, as opposed to absolute ones.
Interestingly I found the writer’s reference to ‘human capital’ depicted rather cynically by business leaders, he suggests, in his experience despite reference made to the term , business leaders do not sufficiently treat their people as important assets within their business. In order for a business to succeed at the performance level, he states that it is essential to connect the competency and development of the people with the strategy or it will fail.
In order for strategic management to succeed, the author demonstrates how important senior management support is by leading and championing the values and drives of the business from the top. This can be achieved by mapping the strategic successes and then disseminating this through the rest of the business, in support of a culture shift which embraces a learning environment.
A thought provoking read which I would recommend, providing an insight into what can be a mind field of information in this area of management performance analysis. Marr manages to easily and clearly identify business drivers and the measurement of them appropriately.
Click the following link to buy the book here: http://amzn.to/pEYy7G
Book Review: Strategic Performance Management Bernard Marr
September 30 2011