What is performance improvement?


What is performance improvement?

The idea of improving business processes is nothing new; the concept has gone by many names (and quite a few fads) over the years.
 

  • Business process improvement
  • Process efficiency
  • Process reengineering
  • Lean manufacturing
  • Six Sigma

The list goes on and on, and we have no desire to create yet another buzz term or passing fad. But for the purposes of this text, we will stipulate the following:
 
Business processes are the instruments by which companies are able to transform raw inputs into value-added outputs.
 
Improvements in business processes directly impact the efficiency of an organization, which, in turn, impacts a firm’s competitive positioning, ability to generate revenue and earn profits.
 

Performance improvement is the task of increasing the efficiency of an organization in order to improve its financial performance.

 
The statements above are not particularly eloquent, but that does not make them any less true or powerful. One could point out that factors such as competitive positioning, brand equity, customer sentiment, reputation, operational efficiency are not included in the above—and this is true, except for the fact that all of these factors are reflected in a firm’s financial performance.
 

Make no mistake; firms exist for many reasons. Many entrepreneurs take pride with the knowledge that their businesses provide employment for a community. Many managers take pride in the brands they have built, or the benefit their offerings deliver to society. All of these factors are important.
 

But the truth is that no firm can provide employment, address a customer need or benefit society unless it is able to deliver stable financial performance.

 

About the Kabardian Group: We help clients achieve profitable growth. Short, simple and to the point. Our clients include companies large and small and at every stage of their development, including start-ups. www.kabardian.com