New Year, New Goals

New Year's Resolutions for Corporate Performance Management in 2021

For most people, it’s not enough just to get the new year off to a good start. It’s a question of getting through the months ahead in good shape as well. To achieve that, many will have resolved to change a thing or two in their lives: more exercise and fewer sweets are topping the list again in 2021.

But they also want to put themselves on track to succeed professionally – and that’s more challenging now than ever before. Those wishing to steer their business confidently into the future in uncertain times will count greater agility and a sharper focus on the essentials among their goals. What, though, does that mean in practice?

Communicate more

Financial controllers are right at the heart of things. They have all the latest figures and the relevant KPIs at their fingertips – not just for the company as a whole, but also for each department and division. Sending reports is therefore one of their routine tasks. At the same time, with the market environment becoming less and less predictable, ever greater demands are being placed on reporting.

To steer a safe course through troubled waters, you don’t just need extremely up-to-date reports. The design of a report plays an important role too. Presenting relevant data and key messages in a clear layout, while also allowing room for supplementary notes and comments, makes reports more informative and easier to understand. This requires a conceptual rethink: rather than preparing a conventional report, the aim is to produce an interactive newspaper. Ideally, the financial controller’s portal becomes a news portal in which CEOs, supervisory board members and other decision-makers can find up-to-date information, which has been put together to suit their individual needs, and comment on it directly.

Plan more frequently

The fast pace of change means that reports with up-to-date content are in demand, as are plans based on the latest trends. Revising one’s own plans regularly and whenever necessary is what leads to success, the aim being to respond rapidly to significant developments and, where possible, to run through several different scenarios. Managers will find plenty of suggestions for implementing their resolutions in the BARC study “Sound Decisions in Dynamic Times”. The study recommends planning and forecasting in considerably less detail.

In 2021, foresight means planning in less detail but more frequently. A meticulously prepared annual budget doesn’t enable an organization to respond resiliently to constant change – but rolling forecasts do.

Sharpen your focus

Efficient communication in reporting and less detailed but more frequent planning make a business more agile. But how can you ensure that, when narrowing the field of vision, the crucial perspectives won’t be ignored? Here, too, the BARC study “Sound Decisions in Dynamic Times” has a tip: only those who know what the drivers of their business model are and keep a close eye on them can identify and use the KPIs that count while sifting out the ones that are less relevant.

A look at the right KPIs enables course corrections to be made at short notice that are consistent with the company’s long and medium-term objectives. With driver-based planning, interrelationships can be revealed, automatic calculations defined, and forecasting speeded up considerably, all in very little time.

If organizations can name the value drivers of their business model without hesitation, that’s marvellous! If they can’t, they should get to work identifying the drivers – and keeping track of them. Only then will businesses be able to grow the strong backbone they need to carry them through unsettled times.

For more suggestions and practical recommendations, read the BARC study “Sound Decisions in Dynamic Times“.