At a minimum, Shared (Business) Services are counted on for cost reduction and quality of service. However, by ensuring the alignment of Shared Services objectives to organizational strategy, the unrealized value of Shared Services can be unlocked and leveraged to the benefit of all stakeholders.
A Peeriosity PeercastTM in the Shared Services Leadership research area featured an organization that has a well-defined strategic plan that is directly aligned with overall enterprise strategy and includes a set of Key Performance Measures (“KPI’s”) to track tangible results at all levels of Shared Services, including team and individual performance.
As with all Peeriosity PeercastsTM, participants answered iPolling® questions that helped frame the discussion:
The results indicate that the vast majority (68%) indicate that there is a clear alignment between Shared Services and strategic goals. However, the follow-up question indicates that while this alignment is clear, cascading this to individual performance measures can be challenging:
The PeercastTM feature company has been extremely successful in implementing a performance management system tied directly to their strategic planning process. They follow a three-phase, six-step process to ensure alignment:
· Step 1 – Gain a complete understanding of overall enterprise objectives
· Step 2 – Translate the strategy to specific goals and objectives of Shared Services
Plan Operations and Drive Performance
· Step 3 – Define and align overall Shared Services direction and associated KPIs
· Step 4 – Plan operations (resource allocation and organization, team and individual KPIs)
Optimize and Provide Business Intelligence
· Step 5 – Monitor, Learn and Improve
· Step 6 – Adjust, Test, Adapt
One of the key points made by our feature company was that in the three-phase process, collaboration with other functional areas and operations is critical to assure alignment across processes. If done in a silo, there is always the risk of conflicting initiatives and objectives. Shared Services leadership communicates often with other functional heads to optimize resources across the enterprise, as well as define roles and responsibilities and decision rights to avoid redundancy of effort.
Our feature company was fortunate enough to have an online Strategic Management tool in place across the enterprise to assist in assigning accountability, as well as providing visibility across the enterprise so conflicts could be quickly and easily identified.
The Shared Services leadership team continually monitors operational alignment to strategy. One of the key tools used is a color-coded operational KPI dashboard to quickly identify any issues, with drill-down capability to analyze the underlying detail. The KPIs are included as part of formalized operational reviews, which also include addressing challenge areas, new issues to be addressed, as well as resource allocation based on current priorities and other changes. Overall, these reviews are used to determine how well Shared Services is executing to meet the enterprise objectives and what adjustments are required.
Some of the best practices shared during the PeercastTM included:
· Line of site is critical. All employees should be able to link their activities to a KPI that is aligned clearly to an enterprise objective.
· People are more motivated when they know the “why” behind the “what” and have visibility of the scoreboard. Explain why it’s objective and let them know if they are winning or losing.
· Communicate and work across processes to avoid duplication of effort and/or conflicting objectives.
· Technology can be a great enabler of the entire performance management process. It can provide standardization of process, provide transparency, and clarify the roles, responsibilities, and decision rights of all stakeholders.
· Engage employees early in the planning process and communicate often.
· Stay focused on key objectives and exercise discipline. If everything is a priority, then nothing is a priority.
· Engage employees – educate, communicate, assess their understanding, and honestly manage their performance.
To the last point, our feature company shared their results in regards to employee engagement and understanding. No doubt, their excellent progress in improving performance is directly tied to these results (representing all Shared Services employees):
· 71% indicated that they understood and knew what to do to improve their individual performance and why it was important for the enterprise.
· 77% indicated they understood the strategy and the performance management process.
· 91% indicated they know and understand the Shared Services Mission, Vision, and Values.
How are you aligning your Shared Services performance to enterprise strategy?
Who are your peers and how are you collaborating with them?
1 “PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.