BSC Toolkit for Crisis Management

No company should forego the implementation of recession KPIs. There is much need to do so now, to deal with the effects of recession for the survival of the enterprise.

With the ongoing economic downturn and things going haywire for virtually all sorts of companies and industries in the corporate world, any sane and logical person would definitely say that recession has definitely hit the primetime spot everywhere. The effects of recession are certainly felt at a global scale today and it is high time that you take a good, close look at your company to see how this economic downturn is affecting your enterprise. You need to evaluate performance as objectively as possible. Check if your company is having problems meeting set forecasts regarding research and development, production, the whole nine yards. Check your status on your short-term debts as well. Are there problems when it comes to settling them? Do you find these short-term debts significantly increasing? Check your people as well. Do you see them exhibiting low morale? Do you see this in your customers as well? If your company is having all of these problems, then it is high time for you not just to consider implementing recession KPIs, but to go ahead and implement them already.

A lot of people might say that the implementation of such KPIs or key performance indicators is yet another investment and would yet be costly on the corporate budget. Still, this is a worth investment to make because these KPIs will help you a lot, especially in dealing with the sad turn of events brought about by this recession.

How should you start then? The first step is to have a fresh perspective on all causes possible behind your enterprise’s internal and external problems. Take note that ALL causes should be determined here so you have to look for both qualitative and quantitative signs.

Quantitative signs can include declining market margins, declining sales, and increasing short-term debts. How you company is unable to meet set forecasts can also be used as a quantitative sign here. With qualitative signs, you can begin with high employment turnover, high management turnover, and degradation in terms of the market value of the company. This last sign can be either real or perceived and should be regarded as important because it has much impact on the psyche of the employees themselves – even if this is perceived.

The next step is to check your IT systems. Make sure they are still producing information that is relevant and supportive towards effective decision-making. For this, you can actually use business intelligence software. Just make sure to include only a few KPIs that are relevant to your purpose. Having too many KPIs would just cloud your judgment. Check for KPIs that need to be modified. Just because you have been using a certain group of KPIs for a while now does not mean these would still be as effective.

Both short-term and long-term actions should then be devised and implemented to deal with changes being made. Re-forecasting should also be done because the set forecasts would no longer be effective because recession has certainly blown all of these away. The entire process of developing and implementing recession KPIs will very well take a lot of time but this would really help any company weather the effects of this economic downturn.

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With the appropriate metrics outlined, any suffering company would definitely be on the right path towards improved performance management through recession metrics implemented.

Recession indeed presents a very difficult time for any existing enterprise in today’s corporate world and no company is exempted from this at all. Thus, it is a must for every company to know how to implement the right metric set for this very trying period. Performance management through recession metrics implemented is indeed a must.

If there is one thing that is hard to maintain in any company during this extremely trying and frustrating period, it would be employee morale. Yes, employee morale would certainly degrade – and at an exponential rate as well – thereby presenting quite the leadership challenge in any existing company or organization. Your metrics should then be geared towards this.

On the surface, companies would expect any employee who survived inevitable retrenchment due to cost-cutting to feel grateful that he or she has been spared. Yes, there would be that grateful feeling still; however, evidence pertaining to past recession periods strongly suggest that it does not take too long for the remaining employees to feel overworked and still vulnerable, even threatened, at the possibility that they could still end up losing their jobs. Thus, even if they surpassed the survival of the fittest stage, their morale would still suffer ultimately. And any company with dwindling employee morale better prepare because things would definitely take a turn for the worse.

Just how worse can things be? Have you heard of recession fatigue? This is actually the scenario wherein companies experience problems happening consecutively. This include deteriorating customer service, falling sales, a significant decline in productivity, higher costs, increased sick days, as well as lower profits. To battle recession fatigue successfully, companies should then take a proactive strategy to the problem at hand.

Communication should definitely be one of the focus points of your recession metrics. Open communication should be administered because without this, the informal grapevine would then be the ultimate source of havoc in the company. Anxiety levels would be raised and the employees themselves would feel detached and angry because they are not being told everything that has been going on under their noses. Eventual resignation is inevitable for the most part here.

The restructuring of the organization should also be included in your metric set. Downsizing is inevitable so there will certainly be a lot of people that the company would have to let go. But the work does not stop there. After downsizing and letting employees go, there should then be a procedure for transition implemented for it is not only the employees let go who are experiencing low morale – the ones left behind are experiencing this, too. More importantly, the employees left behind are the ones who need to do more work with fewer resources so they might need to work longer hours and shorter days – to maximize time and cut costs. Thus, the restructuring of the organization and the workforce should be done systematically so that employee morale would not be made to suffer more.

Recession is really a very unfortunate event that we all have to go through this time. As long as you keep to the idea of implementing the appropriate metrics, then you would certainly be on the path towards better performance management through recession metrics.

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Performance management during economic downturn seems a lost cause these days. However, this need not be the case with the help of the implementation of recession KPIs.

We all know how the concept of performance management during economic downturn can be a bit hazy, especially today when the effects of recession are now being felt all over the world. All sorts of companies and industries are affected by this financial bind that we have found ourselves in. What is worse is the fact that this economic recession we find ourselves in is not about to end anytime soon. We are not even at the lowest point yet, as claimed by expert analysts. With all the bad things going on around you and with nearly everything falling apart in your own enterprise, could there still be something that you could do? Yes, there actually are a few things that you can do to somewhat alleviate this difficult situation. The most important of your options is actually the implementation of recession KPIs or key performance indicators. Recession KPIs can indeed help you maintain a more stable performance for your enterprise.

So, how then can you do this? The first step is to take on a fresh perspective of all sorts of problems circulating in your enterprise. By all problems, we mean both the internal and the external ones. When examining these problems, make sure to look out for every possible cause behind each one of them. Look for both the qualitative and the quantitative ones. Quantitative signs could include the company’s inability to meet standard set forecasts, declining market margins or market shares, declining sales, as well as an increasing number of short-term debts.

Qualitative signs, meanwhile, can include high employee turnover, high management turnover, and degradation of the enterprise’s market value. The last sign can be either real or perceived. However, this remains extremely important no matter the nature of the sign because it affects the psyche of the enterprise’s workforce. If employees perceive that the market value of the company is degrading, then they would not hesitate to start looking elsewhere for greener and safer pastures. This then makes performance management much harder to achieve. A lot worse could definitely happen if the last sign is indeed real, not just perceived. All the more would employees leave the enterprise for greener pastures willingly.

After identifying internal and external issues, you should then check the IT systems currently being used in your company. Are these systems still working efficiently? Is the information they provide still relevant – to the extent that they can be relied on to based good decisions from? This is exactly where KPIs are the most needed. Now, do not make the mistake of assuming that the KPIs you once used would still be effective. There are significant changes that have surfaced so these KPIs need much revamping as well. Do not go for broke with the number of KPIs to use. Just go for a significant few, roughly five in number.

With the causes of all issues determined, plans of action can then be developed. Usually, senior management members would be the ones responsible for the development of strategies as well as the communicating of these strategies to investors, stakeholders, and the employees themselves. However, to maintain an unbiased perspective, it is recommended to hand this task over to an external advisor or consultant.

Recession KPIs can definitely help when it comes to performance management during economic downturn. The process may take long but it will certainly be worth your while.

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Maintaining performance control through the recession scorecard can certainly make it easier to handle the effects of recession. The underlying concept is maximization of limited resources to counter economic downturn.

Recession is not just lurking corners anymore; it is definitely careening the streets of cities of countries all over the world. Yes, economic downturn has finally sunk in its hooks and with it comes a wide variety of financial problems and issues that all companies have to deal with. Any company would certainly find their employees slacking off in terms of performance. This is understandable because really, what employee would be able to concentrate fully on the job if he or she sees so many employees all over the world being taken off the payroll? It is but natural for any employee to feel a little edgy and nervous about the possibility of losing his or her job. But then, with employee performance degrading, this would just mean more problems for the company itself. Thus, there has to be balance struck here. Fortunately, there is something you can do – you still ensure performance control through the recession scorecard. The first step ever in maintaining optimum performance in any company is hiring the right people. Thus, that task would land on the HR department and the recession scorecard should then be geared towards that department.

You have to understand that with the many changes happening around the world, companies and enterprises just cannot help but feel lost are strung off the paths they have taken. However, you just cannot stop these changes from happening because these are effects of the economic downturn that all of us are going through. These changes can be useful, in the sense that business partners and clients would be able to share fresh expectations about the enterprise itself. At times, the expectations are reasoned out among the clients and partners. Most of the time, however, these are not discussed anymore. These expectations would then just be charged to wishful thinking – which makes them all the more difficult to understand and realize.

What makes the situation worse is the fact that many automation tools have been developed during the last decade. These tools focus on the creation and the monitoring of metric systems that effectively measure company performance. Many companies assume that performance would still improve as long as there are metrics implemented and even if recession is already underway.

So, what metrics can then be used on your recession scorecard?

Cost per Hire

This metric has an extremely volatile nature. This makes it the more dangerous metric to deal with. It is actually recommended to use this metric only when you are creating budget plans and when you are reviewing reports on performance improvement.

Quality of Hire

This metric gives you a review of how your possible candidates match the descriptions of available jobs. This metric should be used only when the hiring process is completed. This is the metric you should use to determine if you made the right choice hiring that particular candidate for that particular position.

Time to Fill

This is the period that the HR department takes for it to find new employees for the new positions. The period starts from the time the job positions were posted and made available to the time when the qualified employees start working.

By incorporating these metrics, it would then be easier to manage performance control through the recession scorecard. With everything going on during this economic downturn, we need all the help we can get.

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