Are you planning on optimizing business performance for your business enterprise?
Perhaps you’re on the crossroad, and you are asking “How do I optimize my business performance to drive success”?
Or probably, you are in need of strategic steps your organization can deploy in optimizing business performance that drives and guarantee success?
If you answer ‘yes’ to any of the above questions, Then you will want to read every single word of this article because you are about to discover the five keys to optimizing your business performance for guaranteed success.
In today’s world, Organizations are constantly under pressure to improve business performance, measure their own performance against world class standards and focus their efforts on the customer.
Based on best practices, business development is of great essence for any new start-up business because without it, your business will struggle to survive let alone thrive.
When it comes to developing your business, maybe I should emphasize and make it clear that what we mean in essence is simply how to increase your business revenue.
And simplistically speaking there are only five ways that you can do that, and these are through performance measurement, benchmarking your business performance, adopting best practices, quality management, and business excellence.
Too often than not, we are fond of overcomplicating things, but in terms of revenue growth, these are the only options.
Note the clearer you see them the easier it is to address them, and all of your efforts should be directed toward these five tasks.
Your business venture must have concrete strategies for all five of these opportunities because if you do not have them then, your business will be missing a lot of opportunities and potentially leaving money on the table for your competitors to profit from.
Many use business excellence models to help them achieve their goals.
There are a number of techniques which is recognized internationally and are used to drive business performance and success, and many number of methodologies.
Let’s have a look at some of the concepts involved in optimizing business excellence;-
- Performance Management
- Benchmarking business performance
- Adopting Best Practices
- Quality management
- Business Excellence
Table of Contents
1. Performance Measurement
Let’s quickly take a look at the two words performance and measurement…
Performance simply means output results, or outcomes of processes or services that are evaluated against set goals or targets.
Measurement on the other hand means information that measures input, output, and performance of processes or services,
The term Performance measurement can be seen as the regular measurement of outcomes and results,
which produces measurable data which can be used to assess or evaluate the performance of an organization, team, or individual against set targets and objectives.
Therefore in business, you use this data to review and assess processes such as production, sales, or operating efficiency,
to get an unbiased or objective measure of how your business is operating and also identify areas that need improvement.
The secret to attaining greater organizational success is to have a Strong Performance Management system in place
—this is the processes you have created to measure and reward the capabilities of your staff to meet and exceed goals.
Also, the key to your business outperforming the competition is when you Improve morale, create loyalty and increase overall productivity in your workforces through performance management.
An effective performance management system is at its best when it institutes a true pay-for-performance culture which, in turn, develops staff engagement.
The procedure for connecting an organization’s compensation plan to a particular individual or team/group performance includes setting, measuring and rewarding attainable performance expectations.
There are various ways to tackle the task of producing a performance management process, but most are structured as follows:
- Individual goals and business strategy are well-defined and communicated business-wide.
- Progress with respect to goals is monitored, and management provides coaching on performance.
- Performance is appraised at individual level with feedback and formal documentation.
- Individual gain compensation based on performance. Reward is awarded when individual performance meets or exceeds the anticipated standard. Like a performance development plan is put in place to bridge the gap when performance does not meet the anticipated standards, which will eventually led to a new scheduled performance date.
In today’s world, there are several performance measurement systems in use.
A business venture will always use performance measurement to assess, measure and enumerate the progress made against set targets and objectives as defined in its strategy.
Factors to consider in designing a performance measurement system are;-
- The processes to be selected
- The unit of measurement
- In terms of cost/benefit will the measurement be financial, subjective or quantifiable
- How useful will the information be to your business in terms of the rationale to be measured
- Who will take ownership of the information
- How will your business profit from the use of the information
- Which of your business team will use the information
- Cost/benefit analysis for the exercise
Considering these factors before embarking on the exercise will ensure time and resources spent produces meaningful data that your business can use to drive improved performance.
2. Benchmarking business performance
This is the method of constructive comparisons with other people, processes or businesses, so as to learn from others, establish best follow and improve performance. It will either be informal, or formal.
Benchmarking your business is a concrete way to assess your performance against similar-sized businesses in your trade or industry. It provides you essential info regarding how you’ll improve your business.
There are numerous ways to benchmark your business. You could:
- buy financial benchmarking information to
- compare your business’s financial gain, expenses and profitableness against your industry averages
- examine the financial information of comparable businesses
- contact your business or trade association for info regarding trade standards to live your performance against
- Research and compare your business’s products, services and practices along with your competitors.
Benchmarking helps you to:
- see where you need to cut down on prices and improve efficacy
- assess the productivity of your business compared to your staff strength
- identify opportunities for improvement, new ideas and innovative practices
- highlight opportunities to make your business competitive
- forecast the impact of any changes and see a way to reinforce growth.
3. Adopting Best Practices
This is systematically choosing the tactic that’s evidenced to attain the most effective results.
It may appear axiomatic that organizations ought to study and adopt best practices. However, this isn’t invariably the case.
There definitely situations that others have found out a way to proffer solution to a problem and there’s no need to be compelled to reinvent the wheel.
It is profitable avoid the “not fictitious here syndrome” and stay cordial to learning from others.
Now there are situations where others have adopted and implemented the certain practices that are ineffective, or may be harmful to their business.
There are some best practices that will inevitably end up in replication of efforts, fragmented knowledge, and lost business synergies.
In addition, there are several instances that others have found solutions that work for them but however won’t work for you.
How will you as a business owner or manager tell that applying “best practices” will work for you or most extremely the most effective thing for you to do?
Two Kinds of Best Practices
Because the term “best practices” is deployed to explain a variety of various things, the primary step in understanding how and when to use best practices is to clarify the definition.
At one end of the spectrum, there are distinct processes like help-desk incident management and set-up change management.
Once a method is structured and repetitive, a “best practice” maps all the steps that require to be done and their interdependencies.
On the opposite end of the spectrum, their structural design queries like decentralization, outsourcing, company structures, values/culture, and governance mechanisms and also the array of leadership whims and catchwords represented over the past year and a half.
4. Quality Management
Quality management came into existence in the 1920s to control product control during the process of production. It involves scrutiny, sampling, and testing.
This process has evolved over time to embrace all concentrated quality activity and is usually referred to as Total Quality Management or TQM.
It will embody all quality familiarized programmes and tactics and will help client focus and continuous improvement. Successively Total Quality Management evolved into Business Excellence.
If you’re making an attempt to manage quality in your organization, then bear in mind that “the customer is usually the king”.
As living standards improve, the demand for improved quality of products and services also will increase.
Customers from all around the world have currently started demanding quality products and services – and that they are willing to travel all out and pay consequently in order that organizations meet their expectations and specifications.
In a customer-driven business, businesses everywhere on the planet are now more competitive in nature.
With the transformation of the world into what is now seen as a global village, the new mantra or slogan echoed by everyone is “world-class product and services”.
It is seen that factors that contribute towards business effectiveness are as follows:
- Pricing Competitiveness
- Timely Delivery
The emphasis is now on superior quality products and services which has currently forced organizations to adopt verified quality management systems to remain relevant and stay ahead of the competition.
Total Quality Management does not solely impact product and service quality enhancement, however, it conjointly covers different aspects of quality within the service sector.
In terms of quality improvement of products, there are different other dimensions of quality:
- Performance – the operations of the product
- Conformance – meeting the standards
- Features – adding “extras” to the essential features
- Durability – life-span of the product
- Reliability – the workings of the product over a duration of time
- Aesthetics – look, sound, feel, taste or smell
- Serviceability – the simplicity of it been repaired
The Four Basic Principles to Improving Quality
Total Quality Management covers these four basic principles for improving quality in any business venture:
- Delighting the client – begin by asking yourself what would delight your clients. This suggests that you simply ought to be the best at what is of utmost important to your clients, and this can be adjusted over time. Being in tuned with these changes and perpetually keeping your client happy are the necessary part of Total Quality Management (TQM).
- Managing quality by truth – Knowing the current quality standards of the products or service is the first step for improvement. You’ll be able to solely improve if you know the genesis of your product or service.
- People-based management – Your staff ought to be aware specifically of what they’re doing and why they’re going doing it so as to be driven by any reasonably feedback. With this, you’ll be able to offer them a lot of responsibility. The more your staff feel concerned, the stronger their commitment to satisfying the client are. Standards, systems and technology alone cannot offer quality. Individuals plays a vital role in the improvement of quality in any business enterprise.
- Continuous Improvement – Total Quality Management isn’t just a temporary technique that’s over once the target is met. It’s not a project or program. it’s a method that acknowledges the actual fact that no matter your level of improvement, your competitors keep on improving too and your customers will demand a lot and a lot of from you. Continuous improvement is crucial to any business enterprise.
In the past, managers had to face the speedily growing quality demands and expectations of the clients,
but today, with the arrival of Total Quality Management, managing quality in organizations and business enterprise is been carried out easily by managers
5. Business Excellence
Total Quality Management is currently stated as Business Excellence, and this is often the utilization of certain models and ideas to spot best practice and implement it to manage a business enterprise effectively and attain improved results.
Business Excellence models are adapted to drive business performance and effectiveness and involve the adoption of tested methods and business practices to optimize performance.
Business excellence models offer a framework designed to guide enterprises towards excellence.
Business excellence models are frameworks that, once applied within any business venture or company, will facilitate to focus thought and action in an exceedingly systematic and structured manner that ought to result in increased performance.
The models to be used in your establishment should be holistic in nature in that they focus upon all areas within the organization, and specifically, factors that drive performance.
These models are internationally recognized as each providing a framework to help the adoption of business excellence principles, and an efficient manner of assessing how completely this adoption has been incorporated.
Having discussed the 5 essential keys to optimizing business performance for guaranteed success in your business enterprise.
Let me conclude by saying that Individuals are the heart and mind of your business venture.
Processes and practices constitute the backbone of your operations while Data is the lifeblood that feeds all you do.
For your business venture to function at peak performance and deliver the needed results, people, processes and data must be individually healthy, as well as work in harmony.
Technology has continually been key to bringing people, process, and data together; nevertheless, technology’s significance is evolving.
With respect to that, the relationships among people, processes and technology are also changing.
Never forget that People are the source of the ideas and the engine-room of critical thinking that empowers you to turn customer needs and market forces into competitive and profitable opportunities for your business enterprise.
The human brain is wired exceptionally to deduce a large volume of information from the environment, critically analyze it and make decisions about how to respond.
The human mind, combined with passion and creativity, works as the source for your business’ innovative ideas – both to create new and to improve existing products and operations.
Ironically, most businesses have traditionally regarded human resources as the “strength” of their organization (workers), not the brains (thinkers).
To this end, to make an informed decision, it is advisable that your project team conducts research and identifies the pros and cons of each approach, taking into account your company’s resources, existing processes, and timeline.
I hope you found this article useful in optimizing your business performance for increase growth and revenue. Kindly share this articles with friends and colleagues who may be in need of this.