Performance Management Objectives
Control cost without sacrificing future growth objectives Organizations are expected to do more with less to improve shareholder and stakeholder value. Given the nature of current incentives (meeting quarterly or annual targets), there is a risk that you may meet short-term targets at the expense of strategic growth initiatives.
Understand what drives cost and profit (or value) Fewer than 50 percent of executives are happy with their understanding of what drives cost and profit/value1. Without this understanding, managers are unlikely to allocate resources appropriately and may not know where to focus attention for improvement. At best, it may mean the organization is generating suboptimal results; at worst, it could mean it is destroying value without realizing it – until it's too late to recover.
Improve agility Change is happening faster than ever and information is doubling faster than ever. Organizations that can identify opportunities and threats more easily than their competitors, understand the implications, update strategy quickly and then execute that strategy consistently across the organization will be the winners. However, only 20 percent of CEOs and CFOs are happy with their organizations' agility. The most significant obstacles to improving performance are accountability, culture toward measurement and transparency2.
Identify and respond to environmental, social and economic risks, and opportunities Sixty percent of global executives regard global climate change as strategically important for product development, investment planning and brand management3. Eighty-two percent expect some form of climate change regulation in their organization's home country within five years4. A focus on the "triple bottom line" of people, profit and planet drives increased brand value through innovation, improves internal efficiencies and accountability, and engenders the loyalty of consumers, employees and other stakeholders.
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