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Introduction and challenges

Managing corporate performance starts with formalising the management framework, the dimensions and levels of the operational and financial performance monitoring grid, e.g. tracking the margin contribution per point of sale and EBIT per product line, etc. 

Formalised or not, the management framework is not often revisited as a whole and yet this is necessary for three main reasons:

  1. The perimeter of companies changes over time in the context of growth or disposal of operations
  2. Business models are ever-changing as a result of new service offerings, new means, new ways of generating turnover and results
  3. Organisational structures are changing and becoming more complex (matrix organisations, large numbers of P&Ls with a P&L consolidation requirement)

The CEO and CFO must adapt the management framework, according to their new vision of corporate performance management. Depending on the level of disruption, the change in management framework can disrupt governance, requiring a dedicated change management approach.

How we can help

Argon & Co provides a methodological framework to support the CEO and CFO in defining the enterprise performance management framework, firstly by raising key questions related to the enterprise’s challenges. For example:  

  • How to adapt the management framework to changes in the enterprise’s business model?
  • What type of financial governance should be implemented to manage an international matrix organisation?
  • How to incentivise existing organisations to collaborate?  
  • How to define operating cash flow objectives? Can we define homogeneous rules for the application of the DSO and associated formulas?

The next step is to formalise the management framework and implement it:

  • Definition of all dimensions and steering indicators
  • Specification and implementation of performance measurement tools
  • Support for implementation

A dedicated change management approach may be necessary:

  • Strong sponsorship from senior management
  • A shared vision at the Excom level of the business models of the enterprise and the new performance management framework 
  • The involvement of managerial lines to ensure that the implementation of the framework meets the needs of operational performance