Input
The process "Management Cockpit" is a simple way for you to master your business
Survey
Who ever visited a business war room / decision room ?
Reading
www.enotes.com/management-encyclopedia/performance-measurement
www.enotes.com/management-encyclopedia/balanced-scorecard
www.enotes.com/management-encyclopedia/benchmarking
www.enotes.com/management-encyclopedia/decision-support-systems
Exercise
1. Defining the most frequent business performance indicators that are on display on a management cockpit ( see below for instructions)
2. Answer the most frequent business questions that managers ask to management cockpits ( see below exercise 1 for instructions )
Outputs / learning objectives of the session
You are able to implement a simple process to master your business / unit.
Instructions for exercise 1 on business performance measurement
Define the following business performance indicators and note why you think that managers care to measure them. Use your management texbook and specialized wikis.
Mail your answer to the teacher for comments and definitions
1. Cost to sell 1 MUSD per channel and per product/service
2. Time to sell 1 MUSD par channel and per product / service
3. Return per customer segment
4. Cost to supervise: comparison by unit
5. Customer Satisfaction Index for critical customers
6. Employee Satisfaction Index for critical categories of employee
7. Workforce Flexibility Index compared to market fluctuations
8. Free cash flow generated per activity
9. Occupation rate per resource
10. Sales forecast accuracy per sales person
11. Streamline Index per Critical Process
12. Time to fill a position per category of employee and manager
13. Process off-good practice alert
14. Recruitment performance
15. Coverage index per critical job
16. Job measurability index
17. Turnover trends per critical position
18. Advertising spending per competitor
19. Project Good Shape Index
20. Moving Away Customer Alert
21. Time Facing Customer
22. Bidding Volume per critical product and services
23. Win Rate per critical category of offers
24. Absenteeism less than 3 days
25. Absenteeism / turnover Ratio
26. Cost of abandoned project
27. Bad Press Index
28. Sales force volume compared to total employment
29. Cost of automation investment per employee
30. Cost of staff services per employee for HR services, for corporate services
31. Pricing position for critical product/services compared to competitors
32. Key positions compensation levels compared to competitors
33. Balance between core and non-core compensations paid
34. Marketing spending per sales revenue dollar
35. R&D spending per sales revenue dollar
36. HR management spending par sales revenue dollar
37. Profitability per distribution channel
38. Severance costs
39. Customer churn rate
Instructions for exercise 2
With what indicators, type of facts and figures, information,...will you answer those frequent business question from managers.
1. Are we globally in good shape?
2. Are we reducing our costs?
3. Are we reducing our delay?
4. Are we increasing our productivity?
5. Are we increasing our quality?
6. Are our key projects in good shape?
7. Are our customers satisfied?
8. Are our employees satisfied?
9. Are our shareholder satisfied?
10. Are we improving our tax management?
11. How social are we?
12. Are our key projects in good shape?
13. How are our key financial figures?
14. What are our competitors doing?
15. Where are our customers going?
16. How is this critical unit doing?
17. Are we in danger?
18. How are our market shares?
19. How are the external economic factors?
20. Are we selling harder?
21. Are we increasing the quality of our staff?
22. Are we increasing our profitability?
23. Are we following our plans?
24. Are we following our mission statement?
25. Will our team reach our quarterly objectives?
26. Are we innovative enough?
27. Are we taking enough/too much risks?
28. Will we sign those major contracts?
29. How is our image and reputation?
30. At what levels are our key resources?
31. Is the performance of the IT department increasing?
32. Is the performance of the HR department increasing?
33. Is the performance of the RD department increasing?
34. Is the performance of the Finance department increasing?
35. Are we focusing on our core business?
36. Are we improving people responsibility?
37. Do we get key people with termination risks?
38. Should we make or buy those services?
39. Where are we making/losing the most of money?
40. How fast are we automating our works?
Using a Management Cockpit
1. List the six leading indicators / drivers you will monitor and act on to improve the cash flow of a business unit
2. List the six leading indicators / drivers you will monitor and act on to improve the profit of a business unit. Pricing indicator 1. Pricing indicator 2. Productivity indicator 1. Productivity indicator 2. Labor cost indicator 1. Labor cost indicator 2.
3. List the six business programs, most frequently activated by managers when trying to improve business unit profit
4. When a business unit selects the “new product focus” strategy, what are the six key performance indicators they will monitor and display in their team room
5. When a business unit selects the “productive operation focus” strategy, what are the six key performance indicators they will monitor and display in their team room
6. When a business unit selects the “customer focus” strategy, what are the six key performance indicators they will monitor and display in their team room
7. When managers decide to apply a “high flexibility” management program, what are the operational indicators they will monitor and display in their team room?
8. When managers decide to apply a “high automation” management program, what are the operational indicators they will monitor and display in their team room?
9. When managers decide to apply an “increased measurability” management program, what are the operational indicators they will monitor and display in their team room?
10. When managers decide to apply a “high people responsibility” management program, what are the operational indicators they will monitor and display in their team room?
11. When managers decide to apply a “high innovation” management program, what are the operational indicators they will monitor and display in their team room?
12. When managers decide to apply a “reduce complexity” management program, what are the operational indicators they will monitor and display in their team room?
13. Name three specific risks in the 5 major risk categories that business units could face and should therefore monitor
14. Launching a strong cost reduction campaign, which new indicators / ratios will you measure, which audit will you conduct, which check-lists will you run, which classical business program will you activate? The six first actions I will take to find fat and cut costs without hitting my profit are …
15. Launching an aggressive sales campaign, which new indicators / ratios will you measure to monitor sales activities and sales forces? The six indicators I will measure are…
16. Launching a productivity enhancement campaign, which new indicators / ratios will you measure to monitor the productivity of all resources ? The six indicators I will measure are
17. Launching a quality enhancement campaign, which new indicators / ratios will you measure to monitor the increase in the quality of your products, services and processes? The six indicators I will measure are …
18. Launching a customer orientation campaign, which new indicators / ratios will you measure to monitor the increase of your customers’ intimacy? The six indicators I will measure are…
19. Launching a staff quality enhancement campaign, which new indicators / ratios will you measure to monitor the quality of your employees ? The six indicators I will measure are…
20. Launching a sustainable development campaign, which new indicators / ratios will you measure to monitor that you are becoming a socially oriented unit ? The six indicators I will measure are…
21. Launching a delay reduction campaign, which new indicators / ratios will you measure to monitor that critical activities speed up in your unit ? The six indicators I will measure are
22. Give at least three measurable performance indicators for monitoring improvement of the following support departments. 1. Human resources department. 2. IT department. 3. Finance department. 4. R&D department. 5. Corporate department.
23. How does a business unit measure improvement in its image and reputation?
24. Your boss asks you to design and maintain the “What are our competitors doing?” panel for your business unit. List the steps you will follow to get the job done
Questions on how to use scoreboard to run a business
1. When measuring business performance with indicators, what is the difference between “sensoring” and “reporting”?
2. When selecting indicators to pilot their business unit, many managers test the quality of their scoreboard. What do managers mean when stating
“Our scorecards get a good score on the balance test”
“Our selection of indicators failed the early danger detection test”
“Our selection of performance indicators passed the subsidiarity test”
“Our reporting did great on the mission and strategy support test”
“Our control panels are customer and employee oriented”
“Our scorecards perform badly on the personal accountability test, showing few pure indicators”
3. What presentation rules should be followed when presenting numerous and complex data to managers?
4. How do managers use their scorecards to
Improve meeting quality. Improve their influence over people. Implement a management by objectives program. Implement a management by delegation program. Implement a management by benchmarking program.
5. What kind of information / performance indicators will managers display on the following scoreboard panels
Are we in danger?. How is this critical unit doing? Are we in good shape overall?
