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By Omar Aguilar
MANAGEMENT REPORTING
In many companies, managers are inundated with voluminous reports that fail to give them the precise information they need to assess what's happening and take
appropriate action. In addition, it's almost impossible for management to reward good performance if it can't "see" where that performance is coming from.
To create an effective management reporting system, a company must first establish its strategic and operational goals, measures, targets, budgets, and forecasts. Once these are in place, it can accurately determine what information must be reported, in what detail, and how often.
Because managers at different levels require different information, the company must ensure that managers get the specific information they need to guide them in planning actions, with top management getting primarily strategic reports and operational management getting tactical data. In short, good management reports are concise and provide information that can be acted upon. They are also consistent throughout the company in the sense that they offer one version of the truth.
At NationsBank, now integrated with Bank of America, performance measures and reporting requirements were defined first; then the appropriate recipients for different levels and types of information were determined. Now the performance measurement process gathers relevant information from throughout the organization and transmits it electronically to managers in concise reports, typically two or three pages. For more detail about a particular measure, managers can drill down by doubleclicking on that measure's line in the electronic report. As a result, managers at every level can readily see if targeted objectives are being met, can tell where the best performance is coming from, and reward those responsible.
In best-practice companies, technology plays a major role in management reporting by integrating the reporting process into other systems so that managers can access useful information online and then drill down for additional details. For example, at Knight Ridder the reporting system also enables senior management to ask what-if questions and investigate alternative scenarios.
ORGANIZATIONAL CULTURE AND REWARD SYSTEMS
In most companies, the energy level is high at the top and fades as it moves down through the organization. One of the goals of performance management is to energize employees, first by making performance more visible and then by recognizing and rewarding good performance.
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