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Make managers accountable for improved performance - by giving them the tools to do it.

What if every store manager were alerted to each problem in his/her store as it started to occur? What if each merchant and marketing manager were alerted whenever a product isn't selling well - or as well as it could be - and were able to find out why and take care of the problem? What if all managers had such alerts, and if they didn't address those performance alerts quickly enough, their supervisors would be notified immediately?

Some of the nation's most renowned executives are giving managers accurate knowledge of problems as they arise. This way, early corrective action can be taken to improve performance. Because these managers are held accountable for results, business performance tends to improve more steadily.

It's human nature. You get what you measure. If executives measure people on what is really important and give them immediate feedback on their performance throughout the day, their performance improves.

Such accountability initiatives (also called total enterprise performance management or EPM initiatives) are one of today's strongest motivators. Of course, this is provided that staffs also get the tools to see in near-real time where performance is lagging so they can quickly diagnose the underlying problem.

Combined with supervisor alerts, carefully determined goals/metrics that are personalized by role, and possibly incentives, such EPM initiatives may be the largest ongoing source of return on investment (ROI) and improved competitiveness. More importantly, they deliver one of the most strategically important long-term improvements for retailers.

It makes sense that when managers and associates perceive that they are succeeding and being appreciated for it, they work harder and like their jobs more. That creates two additional sources of business gain from the same EPM investment: Decreased turnover and more satisfied employees (who then yield more satisfied customers).

Personalized KPI Dashboards

With EPM, a manager receives a dashboard personalized to the key performance indicators (KPIs) in his or her area of responsibility (e.g., a store, a category of merchandise, loss prevention, cash flow, etc.). In the past, it would take days, weeks, or months to get this kind of information to managers. Now, it takes minutes - or even seconds - so that corrective action can be taken early enough to make a considerable difference.

The dashboard tracks the KPIs for each manager. Whenever actual performance varies by more than a pre-set level, the dashboard automatically alerts the manager with either a red light on the computer screen, an email, or a phone call - whatever means that manager prefers.

When an alert occurs, the appropriate managers can click on a series of links to get details about the performance aberration, diagnose the problem in minutes, and take corrective action immediately.

The manager's supervisor receives reports and alerts according to triggers or thresholds that the supervisor selects. Senior management can use EPM to simplify the task of gradually changing each manager's performance measures for continuous improvement to financial results each year.

At Business Objects, we have worked with numerous leading retailers on EPM initiatives to develop a basic set of dashboards for many types of retail managers. These are quickly configured to meet each retail organization's individual goals, roles, measures, merchandise, and manager preferences.

Top Management Pre-Tests Changes

The EPM approach creates a top-down/bottom-up collaborative framework for aligning strategy and plans, aligning plans and execution, and improving goals and plans over time and based on execution.

What if senior management could know in advance the calculated effects of potential changes in strategy or policies before committing to them? The same EPM system for lower-level managers and supervisors can be used to pre-test or model new strategies and policies to identify and solve potential shortfalls. Senior management can calculate the sales, gross margin, and expense results in advance of instituting any change.

In fact, numerous senior managers use EPM-type systems to improve the entire budgeting process. Every manager uses the same single version of the truth. As a manager in one department makes changes, the cross-functional effects of those changes can be reflected in other managers' plans.

EPM streamlines the entire budgeting and business planning processes - and then measures execution according to plan, alerting the appropriate individuals as actual results occur and highlighting the opportunities and priorities for improving results.

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