Organisational Performance Management (OPM) is the ongoing task of establishing and accomplishing an organisation’s goals. It involves setting performance metrics and targets at various levels throughout an organisation and then monitoring those metrics and taking corrective action if performance is drifting away from the targets.

Organisational Performance Management is about measuring and acting upon the performance of a business or organisation as a whole and it should not be confused with what is often called Personnel or Employee Performance Management or often just Performance Management which focuses upon the performance of individual employees. Employee Performance Management is a small but important subset of Organisational Performance Management.

“You can’t manage what you can’t measure.“ – Deming, Drucker et al.

Escape Velocity for Business – Hierarchical Reporting Mode.

Escape Velocity for Business has developed a Hierarchical Reporting Model that provides a good template for Organisational Performance Management. It demonstrates the types and quantities of reports that are typically needed in an organisation. This will of course vary between organisations, roles and personalities within any organisation.

We have explained some of the terminology used in Organisational Performance Management towards the bottom of this page.

In managing any organisation it is essential that we can measure how that organisation has been performing (retrospective indicators) and how that business is likely to perform in the future (predictive indicators). Then based on the results of those measurements act to ensure that performance remains within the targets or range that we are seeking to achieve. There isn’t a single Organisational Performance Management approach and certainly not a standard set of IT systems that can deliver the required performance indicators to meet the needs of every organisation or those of everyone within an organisation. There are however some common themes in terms of the types of performance metrics needed.

Typically the more senior positions are within an organisation the less detail detail is required in their regular performance reports. Whereas a middle-level manager with responsibilities for a cost centre might interested in how much each member of his team has spent over the last month, the CEO and Executive Management is more likely to want to see aggregated figures, but perhaps to be able to drill down to the detail if there are any perceived discrepancies. Likewise, a production manager in a factory should be interested in what stoppages have occurred on a production line so the causes can be determined, as well as the number of finished units coming off the line each day. Whereas the CEO is more likely to be concerned about the monthly production figures.

What should actually be getting reported in those various levels of reports?

Financial Metrics Quite clearly every organisation needs to understand what its financial position is at any point in time. The three primary reports in this area being the Balance Sheet, Profit and Loss (Income Statement and the Cash Flow Statement. Various forms of these maybe needed at different levels and for different needs throughout an organisation. For example the manager of a cost centre will need a different format P&L Statement each month to the CEO. Very few if any businesses or other organisations don’t have access to regular financial reports and those that do invariably have a short life expectancy. If you are a small business owner and you can’t get monthly reports from your accounting systems yourself, make sure your Bookkeeper or Accountant does it for you. Always remember though that financial reports are retrospective in nature. That is they are reporting what has happened, not what may or may not happen in the future.
Employee Performance Metrics Many businesses often say that their people are their greatest asset, yet very few businesses measure employee capability, satisfaction or loyalty. As proponents of the Service Profit Chain, Escape Velocity for Business believes very strongly that organisations should be measuring and reporting these things regularly. Capability, which doesn’t just mean skills, qualifications and experience can be simply measured by asking employees what are the things that are inhibiting their ability to help their internal and external customers. The results should feed into or trigger Operational Productivity audits and reviews. Employee Satisfaction and Loyalty can be easily measured through internal Net Promoter Survey or biannual or annual employee surveys. They are predictive indicators.
Customer Performance Metrics Every organisation should conduct at least biannual or annual customer satisfaction surveys. In more transactional environments, such as call centres, service centres, medical centres, and field services periodic customer satisfaction surveys are neither timely enough nor appropriate. Ongoing Net Promoter Score (NPS) techniques should be used in these environments.

We have provided below some of the different types of metrics and reports and the terminology used in Organizational Performance Management.

Statutory Reports Are those which are mandatory to create and submit to regulatory authorities like ASIC and the ATO. They are most often of a financial nature, but not always so with things like Director Declarations also playing an important role. Information about some of the reports required by Statutory Authorities can be found on the appropriate regular authority websites. Financial Reports at this level are generally focused on the disclosure of financial results and related information to internal and external stakeholders about how a company has performed over a specific period along with budgets looking into the future.  Financial reports are usually issued on a quarterly and annual basis.

Management reporting Includes financial and operational information that is disclosed only to internal management to be used to make decisions within the organisation.  Management reporting is typically done monthly or more frequently, depending on the industry and organization.

Operational reporting Is effectively a more detailed subset of Management reporting. Such reporting presents day-to-day or even minute-by-minute performance of specific criteria.  For example in an automobile factory such reports might show the number of vehicles coming off a production line every hour. In a call or contact centre criteria such as the number of calls in a queue or average wait times might be displayed continuously with results rolled up to produce average daily, weekly or monthly reports.

Key Performance Indicator (KPI’s) Are a type of performance measure (or metric) used to evaluate the performance or success of a particular activity or set of financial measures. KPI’s can operate at any level in an organization, so whereas Financial KPI’s might be one measure of success at the organizational level, transactional KPI’s are generally more appropriate at the operational level.

Dashboard A set of Key Performance Indicators (KPI’s) intended to provide a pictorial representation of organizational performance similarly to the way a car’s dashboard provides a summary of the vehicle’s performance.

Nomenclature It is essential that all forms of reports are properly named and labelled.  Titles should not include analysis, commentary, supposition or leading remarks which may prejudice the way that the reader might interpret what is being presented.  Titles should precisely describe the measure / metric that is being reported.

Analysis Any and all analysis provided with reports should be clearly shown as such, separated from titles and based on firm evidence, not supposition. 

Route Cause Analysis. Is a method of problem-solving used for identifying the root causes of failures, faults or problems. It is widely used in IT operations, manufacturing, telecommunications, industrial process control, accident analysis, medicine, healthcare industry,

Reporting period. The reporting period over which the measure is taken should be clearly described.

Reporting Methodology (Report Up or Drill Down sometimes known as push and pull reporting) The method through which reports are provided is very much dependent on the nature of the particular reports and the needs of the individuals consuming them.  Typically a Dashboard or KPI report containing 6-12 metrics would be automatically presented to the user i.e. reported up. Senior staff should generally not have to go searching for KPI’s which should be reported to them automatically, but should they be concerned about anything reported, they should be able to drill down to obtain more detailed information.

Escape Velocity for Business offers a Consulting Service to help organisations customise their own Hierarchical Reporting Model, either across their entire organisation or across specific divisions or areas. Our approach is to work with key stakeholders to understand and then document their needs and then with IT Departments and others to put reporting tools in place. We can also assist with Customer Satisfaction, Loyalty and Net Promoter Score Surveys. Please visit our Employee and Customer Surveys page or contact us for further information.