Strengthen your Performance Improvement Strategy

When recession threats were looming, every CEO was focused on driving efficiency. While that an economic downturn didn’t materialize, leaders are still navigating complex market forces — including high interest rates, tight labor markets, a retreat from globalization, and softening GDP growth.

In this environment, continuous performance improvement (CPI) remains critically important. C-suite leaders should be doing everything possible to preserve margins and increase value. That includes examining all functions and business units and improving or eliminating inefficient processes and the associated costs.

For some organizations, that kind of activity is business as usual for employees at every level. For them, CPI is a well-established discipline that delivers tangible and sustainable results. But in others, performance improvement is a series of initiatives, not part of the cultural “DNA.” And sometimes leaders talk about investing in CPI — but keep pushing it to the strategic backburner in favor of meeting more urgent demands.

Where does your organization fall on the continuum? Where do you have opportunities to improve? What follows are four key questions to prompt assessment and encourage progress.

Do you maintain relevant, achievable, and measurable KPIs?

You may reflectively answer “yes,” but challenge yourself to examine the range and precision of current KPIs. To implement robust CPI, you may need to add new ones — from more granular metrics to high-level performance benchmarks — that make it possible to capture the full range of inefficiencies. You are likely to unearth points of friction, which can be addressed with process changes that lead to significant financial impact.

C-suite leaders need to propose and get agreement on what measures are required early in the process. Those KPIs should become part of routine reporting, giving everyone in the organization visibility to outcomes. Over time, you can adjust metrics based on insights gained and lessons learned through your CPI process.

Are you providing the necessary technology and data to support CPI?

Your teams need tools to bring CPI to life as part of day-to-day operations. As you implement or upgrade supporting technology and data, be sure to properly test dependencies within and across functions. Functions should be able to stay in communication with each other as part of the evaluation and implementation process.

Is CPI woven into your organizational culture?

KPIs tracked by data and systems may help you identify opportunities for improvement. But it’s your people who will make or break success. If CPI isn’t already part of your culture, start by engaging employees as co-creators of process changes. Engage them with consistency and transparency so they understand not just what is happening but why. Listen to their feedback, invite their ideas, and celebrate wins together. Over time, they will value CPI efforts for better business processes and employee experience.

What governance and accountability have you implemented?

Anyone who has fallen short of an exercise, diet, or personal finance plan understands that knowing what to do is one thing. Doing it — day in, day out — is the hard part. The same is true of continuous performance improvement. You may think that you’ve set your KPIs, implemented mechanisms for measuring progress, and engaged your employees as change ambassadors. But how will you know that people are following through? And how will you hold managers accountable for their teams’ progress?

Project governance is an important enabler of lasting success. Be sure to link process-specific ideas to the overall financial performance, as well as to any transformation efforts also underway. Assign an owner for each improvement effort, with associated KPIs and timelines. Establish your key milestones and reporting cadence. Then call upon these leaders to communicate the results with each other and with the organization.

Now is the time for all organizations to get serious about CPI. In a climate of uncertainty and change, it’s a reliable mechanism for staying strong and agile. Eliminating inefficiencies in your business frees up resources to invest in innovation and growth. It’s a practice that will build your CPI “muscle” — so you can keep going farther, faster.

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