Monthly Performance Management Reporting

Maybe PACE members might consider whether they agree with the approach to monthly performance management reporting in this article.

It seems to me that we can categorise at least four organization states concerning strategic planning. ChatGPT4 agreed with my four (initially three) suggested categories and added comments and examples on request. The  following is a summary, indicating the treatment of stakeholders in each case:

1.      A Proactive Organization actively engages in strategic change and innovation, using frameworks like the Balanced Scorecard and Strategy Maps. It treats stakeholders as collaborators in the change process, with structured communication and engagement plans. Example: Microsoft under Satya Nadella.

2.      An Incremental Improvement organization prioritizes stability, efficiency, and gradual evolution but not major transformations. It manages stakeholders conservatively with a focus on the status quo. Example: Kodak (1980s-early 2000s).

3.      A Responsive Change organization is reacting to crises, disruptions, or external shocks. It does not plan for major transformations. Risk assessments may result in the organization treating stakeholders abruptly or inconsistently. Example: Nokia (Telecommunications) reaction to the launch of Apple’s iPhone (2007).

4.      A Start-Up organization is typically in the early stages of market entry and shows experimentation, agility, and pursuit of market share over efficiency. It may lack strategic planning systems and set short-term goals to survive and grow. Example: Stripe Start-Up phase (early 2010s).

Research indicates that many organizations do not have a formal strategic plan, and many fail in executing a plan if they do have one. Organization executives may concentrate on short-term issues in monitoring and controlling the organization, whatever initial plans (if any) were agreed.

This means, in broad terms, for monthly reporting:

1.      A proactive organization may monitor KPI derived from strategic plans.

2.      An Incremental Improvement organization may monitor key indicators based on evolution of its existing business.

3.      A Responsive Change organization may monitor key indicators critical to reacting to a crisis.

4.      A Start-Up organization may monitor key indicators emphasizing niche expansion.

Reports should reflect a comprehensive approach in my view. This means that an organization also needs to monitor activity of important stakeholders for the continuity of the organization, even if those stakeholders are not the targets in the current strategy or top concerns of executives. An organization needs to survive in the short term if it is to grow and prosper in the long term. As an example, I researched three major accidents as part of a preliminary paper on monthly reporting on organization performance and found a common factor was neglect of safety issues: 

https://ssrn.com/abstract=4830384

It does not seem efficient for an organization to have two measurement systems: one for the key concerns of executives and one for general maintenance operations. One solution may be to monitor all important stakeholders and emphasize key concerns of the executives in monthly reports. For example, an organization may show KPI based on critical concerns in capital letters, or black type, and all other key indicators in small letters, ordinary type.

The following simple diagram summarises the idea.

The above Critical Indicators may be KPI for strategic changes planned, or KPI important for evolutionary growth, or defensive indicators to ward off a crisis, or critical establishment indicators for a Start-Up. Critical Indicators that derive from strategic plans may link directly to financial performance. The Operational Indicators above are not likely to link to financial performance but jolly important to monitor for continuity, such as a safety index or total accidents or weather statistic.  

There is a real problem in managing the mass of operational data concerned with maintaining an organization. Compliance data is likely to be voluminous. Maybe an index summarising all fails in safety steps and tests might be possible with reporting on an exception basis.

In summary, this paper proposes that a monthly report on organization performance should present summaries in readable format for CEO, directors, and managers of

(a) critical activity for all important stakeholders, and

(b) important but non-critical activity for all important stakeholders, and

(c) summary financial performance data.

Do PACE members believe that this approach makes sense?

Do PACE members want to suggest amendments to the above or submit an alternative?

Do PACE members agree with basing monthly reports on important stakeholder activity rather than important organization objectives?

Geoff Williams 2025 03 31