Disruptive Thinking Read (DTR) on Sunday-Your Performance Management should drive strategy

Disruptive Thinking Read (DTR) on Sunday

11/07/2021

Conversations with the Disruptive Thinker and Performance Enabler, Farai Mugabe from Zimbabwe

Good morning colleagues. I hope I find you well on this beautiful Sunday. It's a day to pray and praise the Lord.?

Today we discuss disruptive conversations at a time when the pandemic is unsettling us. We live at a time when we have lost our loved ones, nursing sick ones and in constant fear of what tomorrow holds for us. I pray for your strength and power to win this battle. The beauty of mankind is it's ability to adapt and innovate in changing times.?We are going to win. Let us keep safe and follow health guidelines that are being provided to us by Health authorities, workplaces, NGOs and other authoritative sources.?

I am very passionate about people and how excellent people management strategies can help businesses become more profitable. My HR calling is to help companies, individuals and teams to realize their truest potential. I do this by offering you a unique thinking, radical and results driven approach. I have helped companies and businesses to implement life-long HR solutions that impact bottom-line performance. I help companies make more money ?? through good HR practices. Today we discuss about performance management and how to align business KPIs into individual KPIs.?

Your Performance Management should drive strategy

Performance?management is a tool ensure that strategy is implemented through people. It is important that you transmit your key strategic goals and emphasis into your performance management systems so?to ensure effective strategy execution. In this small article, I am going to show how you can easily do it.?

How do you transmit your strategy into individual?employee performance?scorecards

?Let's assume that your company is called Zambezi Cola. You are into beverages manufacturing and selling.?Your key business target is to achieve US$20 million sales for your Cola and you have ten regions. Per every bottle that you sell, you get a Revenue of $1 and a net profit of $0.50?

Breaking this down it means that to make a sales of US$20 million, you have to sell 20 million bottles of COLA and make a profit of $10 million.?

Region A has the biggest plant capacity and contributes 65% of your sales and production volumes. Region B contributes 35% of your sales and production volumes.?

1. Set the right goals and business KPIs

The business goal is to sell?20 million bottles of COLA

How much should the SBUs sell per quarter? In Q1 sales the company makes 25% of it's sales and 15% of it's sales in Q2 because fewer people buy COLA in winter.?

Sales pick up as we approach summer. Q3 accounts for 25% of the sales whilst Q4 accounts for 35%.?

Per every bottle sold, the company makes a revenue of $1 and a net profit of $0.50.?

This should affect the way you set quarterly targets for the business, SBU, teams and individuals.?

2. Break them down to SBU level

How much should each SBU sell? SBU A should sell?13 million whilst SBU B should sell 7 million.

Break it down to quarters?based on the statistics in step 1.?

Based on these statistics, SBU A sales 13 million bottles. In Q1, it should sell 25% of it's bottles. It should sell?3 250 000 bottles in Q1. You can possibly want to stretch you team and give them a target of an extra 10% of the expected sales. After the adjustment, SBU A should sell 3 575 000 bottles and get a Revenue of $3 575 000. The net profit will be?$ 1 787 500

3. How much should?teams sell?

Break it down to individual teams. Suppose you have ten teams in region A. All the teams push similar volumes. This means that in Q1, the target is at 3 575 000 bottles of COLA. Each team should sell 375 500. You may want to add an additional 10% per team to make stretch the team. So each team should sell 393 250 bottles.?

4. Break it down the individual.

Each team has 12 players. Each team has a target of?393 250. Based on that each team player should sell 32 771 bottles. To stretch each team player you can add an additional 10% to adjust the target to 36 048 bottles.?

The Individual ScoreCard during Q1

So on the individual score card?for team members in SBU A during Q1, here is what we will find:

SBU Targets ?? during Q1

Revenue $3 575 000

Volume.??3 575 000 bottles

Net profit. $1 787 500

Team Targets ?? during Q1

Revenue $393 250

Volume.?393 250 bottles

Net profit $196 625

Individual targets ?? during Q1

Revenue.??$36 048

Volumes.??36 048 bottles

Net Profit.??$18 024

Other adjustments can be made but this is the initial guide.?

About the writer

Farai Mugabe?is a Disruptive Thinker, Publisher Author, Modern Thinker, Business Strategist, Talent and OD specialist and HR Specialist.?Farai is a trained and qualifed HR proffessional. He holds a Master's degree in Strategy and Governance degree and a BSc. In Human Resource Management degree.?He is a final year candidate for an MSc in Human Resource Management degree.?

Farai works for a growing company as an HR specialist. He published a book called?Manage your Career Like a Business. This book teaches people to outgrow their problems and realise their full potential.?

He writes in his personal capacity and this article has been written for sharing insights without any intention to cause harm or whatsoever. This article is not aimed at any individual, corporate, events or whatsoever. Therefore he accepts no liability of any harm this article might cause. He may be contacted at the following email, [email protected]. or +263777593115

#HR driving strategy through people