Management Assessment of Performance
Category: Strategy Implementation
The necessity of a constant monitoring
The different reports have to be carefully checked each time they are produced (daily for the turnover, monthly for the profit and loss of the month, quarterly and yearly for more comprehensive figures). First, a regular review means that the reader has the figures in his (her) mind, and will react when something is not what is expected. He (she) will then ask questions, the possible answers being an error or an exceptional figure to be investigated. Once the figures are proved to be correct, a regular review allows a dialog, when necessary, between the head-office and the branch managers, or, at the local level, between the branch manager and his (her) teams.
The risk of not analysing regularly the different reporting tools is to be passive with the figures, and not proactive.
Effectiveness of strategies and actions
The results of a new strategy are not granted. The process is a dynamic one, and the fine-tuning of the action will be done through the reporting showing the evolution of the implementation of the strategy. The various reports are the basis, once double-checked, for a discussion of the results already achieved and the validity of the expectations. If, for one product or one commercial action, there is a growing discrepancy, month by month, between what was planned and what has already been realised, it is the time to think about a corrective decision.
Adaptation of a strategy
If a strategy or the actions to implement the strategy have to be changed, the prospective figures are to be adapted too, especially in a revised budget. The question is to keep the right balance between necessary but not too frequent adjustments. It could be confusing and useless to permanently change the targets. Operational people in charge of developing an activity will not have a clear perspective, and the tools will not allow to actually compare the present situation with the main objectives.
That is why a revised budget should remain exceptional, with precise explanations about the changes and their purposes.