Whether you’re an up-and-coming startup or an established enterprise, sustainable growth is the name of the game. Getting there will require determining the right processes to adjust and the right metrics for measuring the results. The latter part of this equation can be determined through a business performance improvement (BPI) project. If done right, BPI can offer an overarching view of where you need to improve so that your organization can do a better job making money — whether it’s by improving your technology, employee processes, or data use.
Growing the right way
A business performance improvement project is all about understanding your strengths and weaknesses as an organization — and what processes need to change to meet a short- or long-term business goal. Defining “performance improvement” and finding the right metrics to measure it are the keys to success.
While business process improvement is all about adjusting methodologies throughout an organization, business performance improvement focuses on measuring how these process changes can impact bottom-line financial performance and cash flow. While many organizations turn to BPI after an unexpected dip in financial performance, the program can also be valuable during times of stability or as a way to increase revenue and market share.
Perhaps most importantly, performance improvement leaders need to be results-focused rather than looking exclusively at process changes. While processes are important, the ability to measure the impact of process improvements is critical. This mindset shift, while seemingly small, can inform how process improvement decisions are made and what performance indicators are monitored.
The benefits of a BPI project done right include:
- Technological improvements across your organization
- A better understanding of significant pain points and opportunity areas
- Streamlined processes and communication channels
- Improved financial accounting and reporting
While each of the above benefits is significant, the outcome of a business performance improvement plan is, ideally, increased overall revenue and market share. While the changes associated with BPI may be transformative, the goal shouldn’t only be to create a short-term positive result, — but rather to set up your enterprise for sustained growth and continuous improvement.
The kinds of processes you’ll need to improve will vary depending on what problems are holding you back. For some enterprises, that will mean restructuring to a simplified or centralized chain of command. Others may need to think about their communication strategies and technology. Taking a big picture view of any changes and thinking carefully about the performance metrics and timeframe you use to measure ROI is essential. For example, an organization looking to improve revenue or market-share in its sales department would define the appropriate metrics to measure, set an achievable goal for the near-term and work to determine what changes are needed to close the gap.
BPI in action: ZAGG
For organizations of any size, business performance improvement done right can offer major dividends. In one relatively recent case, Oliver Wight was able to help ZAGG Inc, a leader in mobile accessories and technology like mobile keyboards and protective cases. Company leaders Chris Ahern and Jim Kearns had noticed diminishing profit margins as sales continued to grow past the $500 million mark. Knowing there was a better way, the pair turned to Oliver Wight to help them implement an Integrated Business Planning initiative and get business performance back on track.
Very quickly, the context in which the company was working turned on its head when the COVID-19 pandemic shifted the market seemingly overnight. IBP and business performance improvement efforts helped by instilling continued trust in a larger strategy and aligning plans around it. The ZAGG team quickly reduced inventory to meet a low demand year, keeping margins relatively intact while continuing category-level planning on a 24-month rolling horizon.
“If we hadn’t had IBP, we wouldn’t have responded to COVID-19 as quickly. IBP created collaboration within the company and gave us a better lens on the business. We took material cost of goods sold impact out of the business,”
Despite the challenging circumstances presented by the pandemic, ZAGG started seeing results in as little as 12 months. The company was able to more effectively measure the impact of reductions in material cost of goods sold. Moving forward, ZAGG expects to see improvements in profitability. Leadership believed that the process left them in a far better position than they would have been if they had stayed the previous course going into the pandemic.
According to Director of Product Management and Product Review Lead Bryce Craig, the IBP process not only positively impacted performance, but gave leadership confidence about their position going into the future.
“We don’t know specifically what’s going to happen that far into the future with mobile device makers. But we do know when it is likely that mobile device makers will launch their newest phones. When we start thinking of it that way, we realize that things are much more predictable than we had thought,” said Craig
Overall, the leadership said they felt no regrets about implementing IBP during the COVID-19 pandemic, as it provided a key framework for handling a crisis while still looking at the big picture. Through IBP, ZAGG was able to get away from only focusing on strategy to start routinely examining execution and performance.
At Oliver Wight, we use our decades of experience to not only improve business processes but get real results. To learn more about how we’ve helped our clients find new ways to increase revenue and market share, take a look at our Client Success Stories.