Avoiding Performance Management Business Failures

Many companies have collapsed, experience a major decline, or had performance goal-setting issues that led to bad publicity/consequences. Presented is an organizational system for avoiding the types of issues encountered in 10 companies’ performance management business failures.

Ten Performance Management Business Failures

Many well respected companies such as Circuit City (Galuszka 2008), Enron (Wikipedia Enron), GE (Bloomberg 2019), K-mart (Egan, M. (2015), and Sears (Colvin, G. and Wahba, P. 2019) have experience a major decline or completely collapsed, as noted in these linked-to articles.

Other esteemed corporations such as Dell (Hess 2010) and Wells Fargo (Wolff-Mann, E. 2019) made news headlines because they set and gave focus to the achievement of organizational measurement goals that lead to unhealthy behaviors.

Companies have replaced their CEOs with an expectation to improve the company’s bottom-line but instead experienced problems, including a tenure that may have not been very long. (Sullivan 2007 and Wiersema, M. 2002).

BP’s Gulf of Mexico oil spill (Broder 2011), and Blue Bell Ice Cream’s listeria contamination (Axelrod, J and Rand E. 2015) are two examples of the dreadful consequences, including death, which can occur when esteem companies do not respond timely to operational issues.

Why did these business failures occur in companies? For all these situations, there is a common ‘elephant in the room’ business management issue that no one seems to be talking about or addressing. This not-talked-about elephant is an underlying component of many past and current organizational business-management issues that have frequently been encountered.

 

Avoiding Performance Management Business Issues

To overcome these business management problems, something needs to be done differently relative to how organizational performance goals are set and the management of their achievement.

Goals are not bad, but often there is a tendency to manage simply to organizational Y’s in the equation Y=f(X), where a Y could be monthly profit/revenue and/or number of units shipped. Financial incentives can even be set to the achievement of end of the month or quarter goals, where the underlying message is that these goals will be met or else.

 

Avoiding Performance Management Business Failures by Goal Setting

 

This type of Y management seemed to be a common denominator in the above 10 described performance management business failures, where there seems to be little focus given to understanding and improving the X’s; i.e., underlying processes and their inputs that produces the Y’s.  Simple ‘Y management’ of setting goals for a particular point in time can lead to unhealthy, if not destructive behaviors.

What organizations need is a no-nonsense next-generation business management system that both minimizes the risk of organizations doing bad things and at the same time provides direction for moving toward achievement of the 3R’s of business; i.e., every one doing the Right things and doing them Right at the Right time. Integrated Enterprise Excellence (IEE) is a means to fulfill this desire, as highlighted in a 1-minute video.

 

Avoiding Performance Management Business Failures Video

 

IEE provides a detailed 9-step system that CEOs, Presidents, executives, managers, leaders, practitioners, and others can use to resolve frequently encountered management issues such as:

  • Business goals are not being met.
  • Scorecards leading to unhealthy, if not destructive behaviors.
  • Day-to-day firefighting problems that don’t seem to go away.
  • Business strategies that are very generic and/or difficult to translate to organizational work environments.
  • Lean events and other improvement projects consume a lot of resource but often do not have much, if any, quantifiable benefit to the business as a whole.
  • Lean Six Sigma process improvement deployments that have improvement projects, which are either not timely completed or reporting large financial claims that often cannot be translated into true financial benefits for the business as a whole.

 

Avoiding Performance Management Business Failures 9-step IEE System

 

IEE Enterprise Performance Reporting System (EPRS) software provides the vehicle for implementing the IEE system. Among other things EPRS software offers a means to report predictive performance metrics that are aligned to the processes that created, where reported predictive performance measurements are automatically updated.

 

Contact Us to set up a time for an discussion on how your organization might gain much from an Integrated Enterprise Excellence Business Management system.