Establishing key performance metrics is critical for private companies: PricewaterhouseCoopers



    TORONTO, Aug. 21 /CNW/ - To succeed during an economic downturn, many
private business owners respond by battening down the hatches and cutting any
fat that may have built up. Yet, according to PricewaterhouseCoopers (PwC),
private companies need to get out of their ruts and set up very clear and
precise measures - or performance metrics - to succeed in bad times as well as
good.
    Proper performance metrics highlight whether a company is achieving its
strategic objectives. They measure not only financial outcomes, but also
drivers of performance related to customers, people and innovation. According
to PwC, while the majority of private companies create business plans and
strategies, many of them are not setting targets or establishing metrics. Only
56.1% of private companies surveyed by PwC had metrics in place to track their
business performance.
    "Identifying proper performance metrics is critical," says Scott McLean,
partner in PwC's Performance Management, Private Company Services practice.
"Instead of concentrating on just financial metrics, which look to the past
and focus primarily on profitability and revenue growth, a balanced set of
performance metrics help companies keep their eyes on the road ahead, so that
they can manage through an economic downturn."
    According to McLean, private companies need to understand strategically
what the business is trying to achieve and have metrics that indicate whether
they're executing well against the strategy. Private companies should also
share the strategy and vision with employees to enable them to understand
their role in the overall strategy.
    McLean suggests that private companies use leading indicators as part of
their performance metrics, so that they have an idea of what their business is
facing and the direction they are going. Some examples include:

    
    - Customer feedback and satisfaction
    - Inventory accuracy and health
    - Safety
    - Employee engagement
    - Business processes productivity
    - Sales activity

    Details on these indicators can be found at
    www.pwc.com/ca/businessinsights.
    

    This is the second in a series of articles from PwC that aim to help
private companies increase their understanding of some of the critical issues
and opportunities that can affect the performance of their business. PwC's
2008 Business Insights(TM) Survey, an annual survey that analyzes the opinions
of private business leaders and provides benchmarking for similar companies,
will be available after the summer.

    PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance,
tax and advisory services to build public trust and enhance value for its
clients and their stakeholders. More than 146,000 people in 150 countries
across our network share their thinking, experience and solutions to develop
fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP
(www.pwc.com/ca) and its related entities have more than 5,200 partners and
staff in offices across the country.
    "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership, or, as the context requires, the
PricewaterhouseCoopers global network or other member firms of the network,
each of which is a separate and independent legal entity.





For further information:

For further information: Nina Godard, PricewaterhouseCoopers LLP, (416)
941-8383 ext. 13520, nina.godard@ca.pwc.com; Carolyn Forest,
PricewaterhouseCoopers LLP, (416) 814-5730, carolyn.forest@ca.pwc.com

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