Towards peak performance
A performance measurement approach

                            ABM Consult
Arriffin Mansor             Kuala Lumpur
                            012-2786282
                            arriffin@gmail.com
                            www.abmconsult.cjb.net
We help clients to
• Define clear goals and strategies
• Identify and develop critical competencies
• Design proper performance systems and
  processes
• Develop effective team leadership
• Empower employees for greater productivity

                 Towards peak performance      2
Our programs / interventions
• Consulting
  – Identifying critical competencies
  – Strategic business plans
  – Installing Peak peformance framework

• Training workshops
  – core performance competencies
  – Performance improvement

• Team building
  – A winning team with the right working plans



                           Towards peak performance   3
The Key benefits of the programs
• Improved bottom line performance
• Improved customers satisfaction
• Attaining leadership in the industry
• Promote continous improvement in
  all areas
• Promoting effective team leadership
• Strategic thinking and effective
  problem solving through a systemetic
  thought process
• Recognising and promoting talent

                   Towards peak performance   4
Consulting Services
1.   Training need analysis
2.   Performance audit
3.   Strategic business plans
4.   Installing performance management system



                   Towards peak performance     5
Team Building – through performance
dynamics
•   Clear objectives
•   Identify key result areas to achieve objectives
•   Choose suitable key peformance indicators
•   Establish performance targets
•   Communication
•   Problem solving
•   Effective Leadership
•   Group dynamics

                     Towards peak performance         6
Performance Framework
•   Smart objectives
•   Key result areas
•   Key Peformance Indicators
•   Performance targets
                A must for every job holder




                      Towards peak performance   7
Critical Gap Analysis – the immediate
solutions
•   ROE chart
•   KPI calculations
•   Benchmarking
•   Industry standards
•   Internal standards
•   For both performance and competency gaps



                   Towards peak performance    8
Managing people with Performance
              Management
•   Performance planning
•   Performance measurement
•   Performance appraisal and evaluation
•   Rewarding performance




                    Towards peak performance   9
Vision and Strategy




Financial       Customer                     Process   L and G




  Strategy-                     Objectives

  Translation
  Process                       Measures



                                  Targets



                                Initiatives
                           Towards peak performance              10
Some Other Principles in Performance
 • Quantifies the Strategies in measurable terms
 • Strategy is summarized on a Strategy Map over four views of
   performance (perspectives).
 • Must capture a cause-effect relationship between strategic objectives
   over the four perspectives on the Strategy Map.
 • Critical Components include:
     -objectives
   - Measurements
   - Targets
   - Initiatives
 • Everything must be linked: Goals to Objectives, Objectives to
   Measurements, Measurements to Targets.
 • Understand the performance chain

                             Towards peak performance                      11
The Measurement Pyramid

                                                  Goal
Strategic/GPRA Goals
End-Outcomes                                  Outcome
                                             Performance
                                              Measures
Longer-Term Intermediate                       Program
Outcomes
                                 Program Performance Measures

Shorter-Term                        Program Components
Intermediate
Outcomes                   Program Component Performance Measures
& Outputs

Outputs                                        Activities
& Inputs
                                 Activity Performance Measures
                              Towards peak performance              12
ENSURE THE RIGHT KPIS BEING USED / APPLIED

• Let me suggest four possible types of KPIs:
    1. Input phase
        •    Labour Hours
    2. Process phase
        •    Material used per unit
    3. Output Phase
        •    Production cost per unit.
    4. Outcome phase
        •    Return calculation




                                  Towards peak performance   13
A TOTAL PERFORMANCE APPROACH


Return on Assets (ROA)
                                                                                    Sales
 Identifying Critical                                              Gross Margin
                                                                                     $ 100.00

 performance gaps                                                  $ 20.00
                                       Net Profit                                   Subtracted by
                                       $    2.00
                                                                   Subtracted by    $ 80.00
                   Net Profit Margin                                $ 18.00
                        0.02           Divided by                                   COGS
                                                                   Total Expenses
                                       $ 100.00
Return On Assets                                                                    Inventory
                                       Sales                                               13
       0.05        Times
                                       Sales
                                        $ 100.00                                    Added to
                                                                   Current Assets
                           2.5         Divided by                         30        $ 13.00

                   Asset Turnover      $ 40.00                                      Accounts Receivable
                                                                   Added to
                                       Total Assets                       10        Added to
                                                                                               4
                                                                   Fixed Assets
                                                                                    Other Current Assets




  14                                    Towards peak performance
Strategy Map: Capture a Cause Effect
                        Relationship from the Bottom Up
 Stakeholder




                                                                                    More rapid and
                                               Improved Returns on
                                                                                   accessible services
                                                   Investments
 Internal Process




                       Economic Model              Reduce Re-Activities thru             Establish Web Based
                           Process                         ABC/M                             Self Services
& Growth
Learning




                              Expand Global                           Leadership                           Knowledge
                              Facility Reach                         Development                          Management
        Investments




                           Facilities and Fixed                                              IT Infrastructure
                                   Assets                      Human Capital



                                                             Towards peak performance                                  15
TNA : New Skills, knowledge and Attitudes
                Building competencies and retaining talent

             In order for our employees to perform differently, what kind of
             new Skills, Knowledge and Attitudes they need to have?




Existing                                                                       Required
•Skills                                                                        • Skills
•Knowledge                                                                     • Knowledge
•Attitudes                                                                     • Attitudes




                                 Towards peak performance                                    16
Mapping Purpose to the Systems Model
   INPUT OUTPUT ANALYSIS
                                C. Operational Community
                                Purpose - Challenging
                                                                         Outcome
  A. Training Community
  Purpose - Checking                                       C               Performance
                                                                           8. Estimate Value


  A
                Input                                           Output
                                     Process
        Learning Programme                                      7. Changes in Practice
        3. Candidates
                                     4. Changes in Knowledge and Skills
                                     5. Changes in Behaviour
                                     6. Changes in Support Environment

      Performance Problem                            B
      1. Establish the Need
      2. Set success Criteria                      B. Operational Community
                                                   Purpose - Steering
                                     Towards peak performance                                  17
GRAPHIC ILLUSTRATION OF A
 PERFORMANCE AREA
    ROA as a KPI for the CEO
                                   105%
    600                           200
                                                         1010%
A   500                      Before                     100

S   400           Ă          Industry Standards

S   300                 ß                               1020%
E                                      č                50
    200                                    After
T S
    100

     0
         0   10   20    30            40           50

                   PROFITS




                                                                 18
EXAMPLE OF THE SALESMANAGER PERFORMANCE INDICATOR

 Sale per ringgit Advertising

Advertising                                  Sales/advertising


                                             KPI2
  After
  Before




                        Before       After   Sales

                                                         19
                                                                 19
EXAMPLES OF IMPROVEMENT PROGRAMS

        IMPROVEMENT MODELS
                                      MICRO - input output
MACRO - ROE Chart                     dimension
• Departmental strength and           • Individual Strength and
  weaknesses                            weaknesses
• Benchmark against industry          • Benchmark against industry
  standards                             standard
• Cascading the targets               • Root cause analysis
• Performance improvement             • Performance appraisal
  metrics                             • Performance network
• Strategic mappings                  • Competency gaps
• Team buildings

                        Towards peak performance                 20
5 steps in evaluating performance impact
   Step 1 – determine performance
               objectives


             Step 2 – accumulate input costs



                           Step 3 – compute realistic
                           key performance indicators


                                          Step 4 – obtain the output
                                              benefits / income


                                                          Step 5 – Calculate the ROI


                               Towards peak performance                                21
CORPORATE COMPETENCE


Learning tasks - build the following
   business performance models.
  •   Corporate Plans
  •   Marketing plans
  •   Operation plans
  •   Staff plans
  •   Financial Plans
              A must for all companies




                Towards peak performance   22
Our services - a summary
• Consulting
  –   Training need analysis
  –   Performance Audit
  –   Develop effective business plans
  –   Install the performance management system

• Seminars / Workshops
  – Performance improvement – 2 day
  – Business Metrics – 2 day

• Team building
  – A winning, efficient and effective teams


                            Towards peak performance   23
EVERY ONE CAN BE BETTER




     The End
 © Arriffin 012-2786282
 Kuala Lumpur, Malaysia

Performance Consulting & Training Services

  • 1.
    Towards peak performance Aperformance measurement approach ABM Consult Arriffin Mansor Kuala Lumpur 012-2786282 arriffin@gmail.com www.abmconsult.cjb.net
  • 2.
    We help clientsto • Define clear goals and strategies • Identify and develop critical competencies • Design proper performance systems and processes • Develop effective team leadership • Empower employees for greater productivity Towards peak performance 2
  • 3.
    Our programs /interventions • Consulting – Identifying critical competencies – Strategic business plans – Installing Peak peformance framework • Training workshops – core performance competencies – Performance improvement • Team building – A winning team with the right working plans Towards peak performance 3
  • 4.
    The Key benefitsof the programs • Improved bottom line performance • Improved customers satisfaction • Attaining leadership in the industry • Promote continous improvement in all areas • Promoting effective team leadership • Strategic thinking and effective problem solving through a systemetic thought process • Recognising and promoting talent Towards peak performance 4
  • 5.
    Consulting Services 1. Training need analysis 2. Performance audit 3. Strategic business plans 4. Installing performance management system Towards peak performance 5
  • 6.
    Team Building –through performance dynamics • Clear objectives • Identify key result areas to achieve objectives • Choose suitable key peformance indicators • Establish performance targets • Communication • Problem solving • Effective Leadership • Group dynamics Towards peak performance 6
  • 7.
    Performance Framework • Smart objectives • Key result areas • Key Peformance Indicators • Performance targets A must for every job holder Towards peak performance 7
  • 8.
    Critical Gap Analysis– the immediate solutions • ROE chart • KPI calculations • Benchmarking • Industry standards • Internal standards • For both performance and competency gaps Towards peak performance 8
  • 9.
    Managing people withPerformance Management • Performance planning • Performance measurement • Performance appraisal and evaluation • Rewarding performance Towards peak performance 9
  • 10.
    Vision and Strategy Financial Customer Process L and G Strategy- Objectives Translation Process Measures Targets Initiatives Towards peak performance 10
  • 11.
    Some Other Principlesin Performance • Quantifies the Strategies in measurable terms • Strategy is summarized on a Strategy Map over four views of performance (perspectives). • Must capture a cause-effect relationship between strategic objectives over the four perspectives on the Strategy Map. • Critical Components include: -objectives - Measurements - Targets - Initiatives • Everything must be linked: Goals to Objectives, Objectives to Measurements, Measurements to Targets. • Understand the performance chain Towards peak performance 11
  • 12.
    The Measurement Pyramid Goal Strategic/GPRA Goals End-Outcomes Outcome Performance Measures Longer-Term Intermediate Program Outcomes Program Performance Measures Shorter-Term Program Components Intermediate Outcomes Program Component Performance Measures & Outputs Outputs Activities & Inputs Activity Performance Measures Towards peak performance 12
  • 13.
    ENSURE THE RIGHTKPIS BEING USED / APPLIED • Let me suggest four possible types of KPIs: 1. Input phase • Labour Hours 2. Process phase • Material used per unit 3. Output Phase • Production cost per unit. 4. Outcome phase • Return calculation Towards peak performance 13
  • 14.
    A TOTAL PERFORMANCEAPPROACH Return on Assets (ROA) Sales Identifying Critical Gross Margin $ 100.00 performance gaps $ 20.00 Net Profit Subtracted by $ 2.00 Subtracted by $ 80.00 Net Profit Margin $ 18.00 0.02 Divided by COGS Total Expenses $ 100.00 Return On Assets Inventory Sales 13 0.05 Times Sales $ 100.00 Added to Current Assets 2.5 Divided by 30 $ 13.00 Asset Turnover $ 40.00 Accounts Receivable Added to Total Assets 10 Added to 4 Fixed Assets Other Current Assets 14 Towards peak performance
  • 15.
    Strategy Map: Capturea Cause Effect Relationship from the Bottom Up Stakeholder More rapid and Improved Returns on accessible services Investments Internal Process Economic Model Reduce Re-Activities thru Establish Web Based Process ABC/M Self Services & Growth Learning Expand Global Leadership Knowledge Facility Reach Development Management Investments Facilities and Fixed IT Infrastructure Assets Human Capital Towards peak performance 15
  • 16.
    TNA : NewSkills, knowledge and Attitudes Building competencies and retaining talent In order for our employees to perform differently, what kind of new Skills, Knowledge and Attitudes they need to have? Existing Required •Skills • Skills •Knowledge • Knowledge •Attitudes • Attitudes Towards peak performance 16
  • 17.
    Mapping Purpose tothe Systems Model INPUT OUTPUT ANALYSIS C. Operational Community Purpose - Challenging Outcome A. Training Community Purpose - Checking C Performance 8. Estimate Value A Input Output Process Learning Programme 7. Changes in Practice 3. Candidates 4. Changes in Knowledge and Skills 5. Changes in Behaviour 6. Changes in Support Environment Performance Problem B 1. Establish the Need 2. Set success Criteria B. Operational Community Purpose - Steering Towards peak performance 17
  • 18.
    GRAPHIC ILLUSTRATION OFA PERFORMANCE AREA ROA as a KPI for the CEO 105% 600 200 1010% A 500 Before 100 S 400 Ă Industry Standards S 300 ß 1020% E č 50 200 After T S 100 0 0 10 20 30 40 50 PROFITS 18
  • 19.
    EXAMPLE OF THESALESMANAGER PERFORMANCE INDICATOR Sale per ringgit Advertising Advertising Sales/advertising KPI2 After Before Before After Sales 19 19
  • 20.
    EXAMPLES OF IMPROVEMENTPROGRAMS IMPROVEMENT MODELS MICRO - input output MACRO - ROE Chart dimension • Departmental strength and • Individual Strength and weaknesses weaknesses • Benchmark against industry • Benchmark against industry standards standard • Cascading the targets • Root cause analysis • Performance improvement • Performance appraisal metrics • Performance network • Strategic mappings • Competency gaps • Team buildings Towards peak performance 20
  • 21.
    5 steps inevaluating performance impact Step 1 – determine performance objectives Step 2 – accumulate input costs Step 3 – compute realistic key performance indicators Step 4 – obtain the output benefits / income Step 5 – Calculate the ROI Towards peak performance 21
  • 22.
    CORPORATE COMPETENCE Learning tasks- build the following business performance models. • Corporate Plans • Marketing plans • Operation plans • Staff plans • Financial Plans A must for all companies Towards peak performance 22
  • 23.
    Our services -a summary • Consulting – Training need analysis – Performance Audit – Develop effective business plans – Install the performance management system • Seminars / Workshops – Performance improvement – 2 day – Business Metrics – 2 day • Team building – A winning, efficient and effective teams Towards peak performance 23
  • 24.
    EVERY ONE CANBE BETTER The End © Arriffin 012-2786282 Kuala Lumpur, Malaysia