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News from Members The 3 principles of the excellence in management

The 3 principles of the excellence in management

by PKF Finconta November 26, 2019

Author: Alina Făniță, CEO , PKF Finconta

In the age of efficiency, operational excellence is the key to success in the business environment. Large companies in high-income industries do not properly capitalize on their growth potential. Therefore, defining the operational processes of type "Order to Pay", "Invest to Recover" or "Develop to Launch" is decisive.

Although these combinations of words give the impression of a clear, easily intuitive understanding, most often when asked about process management, managers either do not know how to explain them, or they stop-frame only at some stages of a process. What is common to most managers is the approach of the operational processes on the company-> external environment direction, but not on the external-> company direction.

Excellence in management is guaranteed to be achieved if it respects these three principles:

1. Balancing the approach too focused on the internal perspective and lack of focus on what is happening in the external environment of the company in performance management. In another words, including the external perspective on the business from the external factors involved. Considering the contribution and requirements of each of these factors involved and the dynamics of the market is an important shift from the traditional performance management focused more on understanding only the internal performance.

2. Aligning the management processes with the company's mission and values. Because management processes are strategic, financial and operational, the key to success is aligning these processes at different levels, as well as across departments. The excellent results come only from the perfect execution of the plan and the need to connect the whole set of management processes. Traditional performance management often deals with management activities, such as planning, budgeting, forecasting, reporting and analysis in isolation, leading to inefficiencies.

3. Acknowledging the fact that, to create a learning organization that is agile, feedback loops between management processes are vital. This feedback allows companies to quickly identify changes, assess their impact on their plans, and quickly find alternative ways to approach their goals. These feedback loops should include optimal performance indicators at operational, financial and strategic levels.

Business strategies live and die if a company performs. Knowledge, strategies and plans remain theoretical unless someone puts them into action - and doesn't monitor them to see how they work. But performance management needs to do more than just monitor each process. It must overlap the different areas of activity and create a perspective on the causal relationship between the activities of each role and department. Missing information presents one of the main obstacles to the success of performance management.

Data management strategies are essential. To overcome this problem, performance management managers implement data management strategies, so that all departments use tools correlated with their activity but also with key processes for the company's performance. By doing so, companies gain a better visibility of business processes and increase their ability to proactively track and manage revenue growth factors, lower costs, and appreciate shareholder value.

The customer orientation of the organization, as a principle of quality management, is materialized by establishing the quality objectives and adopting the appropriate strategies to ensure the competitive advantages - differentiation and cost control. To this end, the process-based approach of the organization's activities defines the value chain whose analysis allows to highlight the ways in which the organization can offer more “valuable” products and services to its customers than its competitors.

 

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About PKF Finconta

For 25 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR, and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping and accounting advisory services, transfer pricing, payroll and personnel administration, and insolvency.

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