Chief Performance Officer – Does Your Organization Have One – Should IT??

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As President Elect Obama announced the creation of the position of Chief Performance Officer to his administration yesterday, it occurred to me that the government – yes, I said the government – has just taken a step that most US businesses haven't even considered. The creation of a function that is charged with the responsibility and accountability for performance improvement.

How could this be, you ask. Given the demise of many of our manufacturing jobs and companies, has no one concluded that “performance improvement” CAN'T be an ad-hoc or part time effort. Well, I have to say – it appears not. Having worked with hundreds of companies in support of their efforts to make their products or deliver their services – better, faster and at a lower cost – the idea that such efforts need to be more than a “shared-responsibility” has not gained traction. 

Some suggest performance improvement is the responsibility of all company team members. I would agree with this as an operation philosophy. However, based on a “general” definition of performance improvement - “the process of identifying and analyzing important organizational and individual performance gaps, planning for the future performance improvement, designing and developing cost-effective and ethically justifiable interventions to close performance gaps, implementing the interventions, and evaluation the financial and non- financial results”

Is the scope contained in this definition achievable through an informal or ad-hoc effort? Hummmm. Perhaps! However, if it is critical to the success and long term existence of the organization shouldn't the effort have corporate visibility and clear responsibility for results. Yes! To keep any critical initiative at the top of management's priority list requires the dedication and leadership of an individual charged with the responsibility and accountability to get it done – every day.

Would a CPO be of value to your organization?   Let's look at some numbers.

For a $50 million manufacturing company realizing a 10% net income – OK, already the best of the best – it would make $5.0 million.

That means you are expending $45.0 million to run the business. If the CPO could reduce total costs by 2% per year the savings would be $900,000 per year less the cost to implement the changes. Assuming a low cost/no cost philosophy, let's use $150,000. That results in $750,000 of net annual savings. What would you pay someone to save your company $750,000/year – every year?? 

So, does your company need a “Chief Performance Officer”? Can you afford not to have one??

If you would like to explore creating a Chief Performance Officer position in your company or just interested in getting better results from your present improvement programs, give me a call 1 866 286 8713. 

To learn additional information on Performance Measurement Metrics  and how to create A Framework for Performance Metrics  OR visit our website Visionary Solution Resources for other performance improvement ideas.