How Corporate Culture Affects Performance Management
By tobyehatch on Feb 05, 2013
Good news – now there is research to support the idea that corporate culture really does impact corporate performance management!
A new article by the Business Research and Analysis Group (BRAG) was published in the January 2013 issue of Strategic Finance called "How Corporate Culture Affects Performance Management". Click here to read the article. It is an interesting piece that focuses on two main things:
1) An original bit of research on the attributes of effective CPM systems (EPM in Oracle vernacular) and
2) How/if those criteria support Howard Dresner’s Performance Culture Maturity Model. This model tracks 6 critical measurement criteria through four levels of maturity therefore highlighting the status of any company in fostering a performance directed culture.
The article starts off listing strategic and operational benefits that can result from having an effective EPM system, and then goes on to investigate how significant Dresner’s six criteria of a performance directed culture are to the organizations in the survey that had achieved significant strategic and operational benefits – with a view of the level of maturity organizations reached with respect to these criteria. In the end, we can see which factors impact the achievement of benefits from an EPM system.
Dresner’s six criteria from his Maturity Model are:
1) Alignment with Mission
2) Transparency and Accountability
3) Action on Insights
4) Conflict Resolution
5) Common Trust in Data
6) Availability and Currency of Information
Through a series of graphs and tables presented and an analysis performed, it was determined that three of the six criteria are very significant to achieving benefits from an EPM system, while the other three (although still important) are less significant to the sample of organizations involved in the study. The three very significant criteria are:
a) Alignment of an organization with its mission and vision
b) The presence of transparency and accountability
c) The ability of an organization to resolve conflict effectively
An interesting detail noted in this article was that in general, organizations are doing a poor job of achieving organizational maturity in the three areas that were found to have the most significant impact on achieving benefits! The four levels of maturity modeled were Level 1: Chaos Reigns, Level 2: Departmental Optimization, Level 3: Performance Directed Culture Emerging, Level 4 Performance-Directed Culture Realized.
Another interesting detail was that the ONE criteria that organizations have really improved upon over the years and have reached a higher degree of maturity on – was one that was considered to have less impact on achieving significant benefits (Availability and Currency of Information).
The big message here is although it is important to have good EPM information in a timely fashion upon which to base sound business decisions, corporate culture has an even bigger impact on being able to achieve significant EPM benefits.
Click here to access the article.