Dynamic Performance Management
Most businesses are swamped by key performance indicators (KPIs) and management dashboards that end up being little more than a distraction. It is generally accepted that only a few key metrics have a large influence on cash flow, but arriving at a full understanding of those key metrics and how they interact with each other often proves elusive.
Every part of the organization creates metrics that seem relevant to them, but the resulting mountain of KPIs is very rarely calibrated, linked or traded off against the overall long-term value of the business. The reporting structure and management information in most organizations add to the confusion.
To address the problem, L.E.K. Consulting has developed Dynamic Performance Management (DPM). This rigorous analytical framework uses a seven-stage process to create genuine insight into the critical KPIs and can become a catalyst for a step change in performance, organizational redesign, strategy refresh and ongoing, continuous improvement. In our experience, it is reasonable to expect this process to deliver viable profit improvement opportunities in excess of 30%.
L.E.K. DPM framework: seven-step process to profit enhancement
The benefits of the DPM process are far-reaching:
- Immediate performance improvement generated from focus on important KPIs that can be driven upward
- Dramatic increase in the understanding and collaboration between business domain leaders
- Speed of evaluation of alternative strategic scenarios via simple assumptions about operational metrics
- Alignment between “live” management information, budgeting and longer-term planning
- Immediate quantification of investment decisions based on the planned consequences for KPIs
- Catalyst for a complete refresh of strategy, organization and culture
- Opportunity to renew incentives and reward mechanisms linked directly to KPI movements
Examples of our work
To learn more about how we help our clients, please refer to these case examples:
- PMI support, including organizational integration, footprint rationalization and synergy validation, for the merger of a leading global specialty chemicals company. Read more
- Post-merger integration for a global scientific tools company in a $2 billion transaction. Read more
- Carve-out and post-merger integration for a global specialty pharmaceutical client. Read more
- Post-merger integration support for a global specialty pharmaceutical client looking to close a transaction on an accelerated time scale. Read more
- Support for a private equity firm’s “buy and build” strategy, developing and executing an integration plan for a newly acquired asset with a number of existing portfolio companies. Read more