Research Report: Delivering Organisational Performance

The series of events in 2021-22 that PARC labelled its Performance Measurement Trilogy focused on how to define and measure organisational performance – from the perspective of different stakeholders – and covering both the financial and non-financial (ESG) measures.

It follows that, having determined what ‘superior business performance’ might look like, the task of organisational leadership is then to determine how to deliver that level of performance. This involves defining the organisational ‘Performance Model’ – both in the longer-term and in the annual timeframe – and creating a clear focus on the activities that will improve the company’s outcomes. Critical to the delivery of business performance is being able to cascade that performance model through the organisation. What is it that business leaders do to create the conditions, the behaviours and the processes that will achieve this level of performance? It is here that some companies run into difficulty. The gap between theory and execution is often wider than we anticipate. Translating the performance model into the everyday behaviour of people across the organisation can be a challenge. It can result in framing the delivery of ‘performance management’ as a set of activities that are focused on the individual rather than the over-arching goals of the organisation.

Our area of focus in the report is the aspects of superior business performance that can be attributed to the process by which senior management delivers performance, i.e. the impact of the ‘delivery process’ as distinct from the ‘product’. The aim is to focus on the impact of a company’s management and the role that senior and middle managers have in enabling the organisation to perform. How much of the company’s success is due to the way it has been and is being run?

We also explore how investors evaluate the quality of management performance, when deciding whether to invest in or acquire a company. When two companies in similar markets are seeking investment, what is it about the delivery process that persuades investors to back one rather than the other?

This report is authored by Steven Toft, and sponsored by beqom.