Monitoring Performance of Businesses

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Monitoring Performance of Businesses
Please recommends books or articles on how to implement performance management framework for an investment holding company. Our company holds investments in core businesses and private equity. How to set up an effective reporting mechanism to monitor the performance of these investments?

Monitoring Performance of Businesses
Stephan Szugat, Member
Hi, first think about your reporting requirements and the result drivers of the businesses you are invested in. See if they have something in common. Not all businesses could be measured with the same numbers, but many are very similar.
When you have your reporting needs, find some KPI's which reflect them. Only use a few KPI's. Prepare yourself a dashboard for each area of investment (similarity of businesses). Have a KPI-dashboard for each business as well.
Do not summarize everything into one KPI, such as ROI, it doesn't take all views into account. With the above described dashboards or one-page-reports you will have a basis for a bigger reporting package. Always remember your needs and the result drivers for each business.
Well, now I didn't recommanded any book, that's because theory is mostly black and white, but life has a lot grey colors as well. So I just preferred to provide you a practical tip, hope you don't mind and hope it helps.

Performance Measurement Dimensions
Dear Vatsala,
Books and articles for your situation are still poor and rare. I had the same question working in a family office sometime ago. Following questions to answer was our way to solve the task:
1. What is the purpose of your holding company?
2. What is the reason why you are doing performance management? (just to check people or to improve management decisions)
3. What is the management of the investment holding willing to decide on (just buy or sell stakes or even being active strategic shareholder)
4. What "Objects" do you have to look at to enhance the decision process of your holding management? Legal entities or even business units/products/markets)
5. How does your yearly financial calendar looks like (defined in shareholder contracts)?
6. What performance management "content" are you able to discuss (P&L,BL,CF,KPIs)?
7. What corporate systems and interfaces are you able to roll out and run?
AND: do not try to get to deep into operations. Focus on your business.



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