Review of Best Practices in Planning and Performance Management
According to David Axson, traditional planning and management reporting processes “are simply too slow, too detailed, and too disconnected for today’s competitive world. Managers are seeking new decision-making processes and tools that enable them to shorten the cycle time to make and implement a decision.” This book offers processes and tools to meet that need, what Axson characterizes as “the current “state of the art” practices, based on the benchmarks and client experiences of The Hackett Group of which Axson was a co-founder. As with so many other business books, this one responds to an important question, in fact to two:
What is the best level of performance to be achieved?
How is it to be accomplished?
Axson organizes his material with three Parts. First he explains why best practices can be “a vehicle for performance improvement,” then describes the best practices for “each element of the planning and management reporting process – strategic planning, operational and financial planning, management reporting, and forecasting.” Finally, in Part III, he provides insights into “the steps required to design a benchmark, build a best practices process, understand the critical success factors for implementation, and the importance of effective leadership. As I read Axson’s book, I felt as if I were examining the contents of a “tool kit,” with the book serving as an instructions manual.
Over recent years when retained by corporate clients to help them reduce cycle time while improving first-pass yield, I was frequently aware of the fact that the cycle time and first-pass yield of those initiatives were themselves “too slow, too detailed, and too disconnected for today’s competitive world.” I mention this because the same may be true of initiatives to identify and then implement best practices. Quite properly, Axson does not suggest which best practices to select but he offers invaluable advice as to how to ensure that their implementation is both effective and (key word) efficient.
He asserts that best practices must effect a measurable improvement of performance, be applicable across a broad spectrum of comparable organizations, be proven in practice, take full advantage of proven technologies, ensure an acceptable level of control and risk management, and get the skills and capabilities of the given organization in proper alignment. It is important to note that (a) his observations and recommendations are anchored in an abundance of real-world experiences and (b) are best viewed within a continuous and integrated process rather than as separate, autonomous initiatives.
On pages 19-20, Axson identifies the basic steps of best practice marketing: identify an opportunity for improvement, determine whether or not it justifies taking action, investigate the reasons for a “shortfall” in performance, identify the best practices which can be applied, and then focus on implementing the change(s) to achieve substantial improvement of the given organization’s operations. To me, some of the most valuable material in this book is provided in Chapter 6, “Operational and Financial Planning: Translating Ideas into Action.” He guides his reader through the step-by-step process.
In this context, I am reminded of what Peter Drucker once said in an article written for the Harvard Business Review in 1963: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” Hence the importance of determining, first, which “shortfall” in performance is in greatest need of reduction, if not elimination. However, when making that determination, beware of responding to symptoms rather than to root causes. It is often helpful to use the “fishboning” technique: When discussing with associates a specific question or problem, ask “Why?” and in response to the answer, ask “Why?” again and continue to do so in this manner to each of least five subsequent responses to it.This admittedly an irritating but frequently productive process.
Decision-makers in any organization (regardless of its size or nature) will benefit substantially from the information, insights, and suggestions which Axson provides in this volume. To repeat, he does not suggest which benchmarks to select but does correctly emphasize that benchmarks must meet four primary requirements.They must be objective, quantifiable, credible, and actionable. Implicit, presumably, is another requirement: that a benchmark is relevant. One final point: What is a best practice today can soon become the norm and then the “shortfall” in need of attention. In that event, Axson’s book will have provided an excellent preparation to respond to it effectively.
Product Description
If you are looking to significantly upgrade your management practices to better meet the needs of today’s increasingly volatile, complex, competitive, and global markets, look no further. Best Practices in Planning and Performance Management Reporting, Second Edition provides you with an accessible framework to help any business unite its reporting and budgeting functions to achieve its strategic objectives.
From the Inside Flap
Bombarded by an avalanche of information, today’s managers find that traditional budgeting, forecasting, and reporting techniques are not only obsolete, they’re dangerous. They are simply too slow, too detailed, and too disconnected for the information age we live in. So where do managers turn to for help when asked to develop plans, build budgets, report progress, and make decisions in response to today’s increasingly competitive, fast-paced, and volatile environment? The answers are found in Best Practices in Planning and Performance Man-agement, Second Edition.
David Axson’s innovative text helps you significantly upgrade your management practices to better meet the needs of today’s increasingly complex and global markets. By providing a framework for identifying best practices in performance management, Best Practices in Planning and Performance Management defines clear action plans for successfully developing, implementing, and profiting from the strategic applications of key performance metrics.
Part One makes the case for a radical change in the way managers manage performance, explaining why effective performance management is needed in today’s fast-paced world and also provides a series of diagnostic tools and measures to help you evaluate the improvement opportunity. Part Two describes the principal best practices for each element of the performance management process-strategic planning, tactical and financial planning, management reporting, and forecasting. A new chapter on risk management reflects its emergence as a critical component of any effective performance management process. Finally, Part Three provides insights into the steps required to design a best practice-inspired process that is right for your organization as well as the critical success factors for implementation.
With its increased emphasis on performance management, including incentive compensation and competitive analysis, this Second Edition has been thoroughly updated throughout to address the implications of Sarbanes-Oxley, new technologies, global uncertainty, emerging best practices, and risk management. Filled with examples and case studies of how leading companies are rethinking the way they make and implement decisions, this proactive guide for managers and students of business will help you consistently make and execute better decisions faster.
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