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Management: Tasks, Responsibilities, Practices

Peter F. Drucker · 1973

In a sentence

Enterprise performance management is not merely dashboards and financial reporting but the integration of multiple managerial methodologies—spiced with predictive analytics and risk management—that enables organizations to execute (not just formulate) strategy and create sustained value.

Gary Cokins argues that most organizations are 'over-managed but under-led,' able to formulate strategy but failing to execute it. In this conversational, example-rich compilation, he demolishes the narrow view that performance management equals scorecards plus budgeting and instead presents it as an umbrella framework integrating strategy maps, balanced scorecards, activity-based costing, customer value management, rolling forecasts, enterprise risk management, human capital analytics, and predictive analytics—all mounted on a common business-intelligence platform. The payoff is an organization that can anticipate, react, and respond faster and smarter, aligning employee behavior with strategy, understanding which customers and products truly earn money, and converting potential value into realized shareholder wealth. Whether you are a newcomer or a seasoned practitioner, the book shows not just what and why, but how—including how to overcome the human resistance to change that dooms most implementations.

The four lenses

  • Science
  • Statistics
  • Systems
  • Strategy

Tags

f1-strategy

The model

A causal framework in which design levers (integrated methodologies, analytics, leadership) and contextual conditions drive psychological and behavioral states (strategic alignment, employee buy-in, decision quality) that produce outcome metrics (profitable customer value and shareholder wealth creation). Central thesis: shareholder wealth is a result, not a goal, achieved by integrating methodologies, aligning behavior with strategy, and infusing analytics and risk management.

Integration of Managerial Methodologiesdesign lever

The degree to which improvement methodologies (strategy maps, balanced scorecards, activity-based costing, budgeting/forecasting, CRM, supply chain, Six Sigma/lean, capacity planning) are unified, seamlessly connected, and synchronized on a common information platform rather than operated in isolated silos.

Use of Predictive Analyticsdesign lever

The extent to which the organization applies analytics of all flavors—statistical correlation, segmentation, forecasting, what-if scenarios, optimization—especially forward-looking predictive analytics, to shift from after-the-fact control to anticipatory, proactive planning and decision making.

Managerial Accounting Cost Accuracydesign lever

The degree to which resource expenses are traced to products, channels, and customers based on cause-and-effect drivers (as in activity-based costing) rather than arbitrary broad-average allocations, providing accurate, transparent, decision-relevant cost and profit visibility.

Leadership Vision and Strategy Communicationdesign lever

The extent to which executives set direction, communicate a clear strategy (via strategy maps), inspire and empower employees, foster trust and tolerance for dissent, and manage change rather than merely administering rules and budgets.

Behavioral Change Managementdesign lever

The organization's deliberate effort to consider and alter employee attitudes and behavior—via communication planning, involvement, and buy-in—to overcome the natural resistance to change that stalls adoption of performance management methodologies.

Enterprise Risk Management Maturitydesign lever

The degree to which the organization systematically identifies, quantifies (probability, severity, response capability), and manages risks—matching risk exposure to risk appetite across strategic, operational, financial, and hazard categories—and integrates risk with performance management.

External Uncertainty and Volatilitycontextual condition

The contextual condition of unprecedented change speed, competitive pressure, commoditization, and market volatility that makes calendar-based long-cycle planning unsuitable and raises the stakes for decision quality and responsiveness.

Strategic Alignment of Work and Prioritiespsychological state

The degree to which the behavior, priorities, projects, initiatives, and resources of managers and employee teams are aligned with the executive team's strategic objectives, such that individuals understand how their weekly/monthly work contributes to strategy.

Employee Buy-in and Engagementpsychological state

The extent to which managers and employees accept, commit to, and take ownership of performance methodologies and measures—versus passive resistance or 'convince me' skepticism—driven by involvement, trust, and understanding.

Quality and Speed of Decision Makingbehavioral pattern

The capability of managers and employees to make better, faster, fact-based trade-off decisions—anticipating, reacting, and responding to change—supported by reliable information, analytics, and clear understanding of causality.

Profitable Customer Value Creationoutcome metric

The outcome of acquiring, retaining, growing, and winning back the right customer microsegments at optimal spend—maximizing profitable sales growth and customer lifetime economic value rather than mere sales volume.

Shareholder Wealth Creationoutcome metric

The ultimate financial outcome—sustained economic value creation and positive free cash flow for shareholders/stakeholders—understood as a result of integrating methodologies, aligning behavior with strategy, and serving customers profitably rather than as a directly pursued goal.

How they connect

  • methodology integration → predicts strategic alignment
  • leadership communication → predicts strategic alignment
  • leadership communication → predicts employee buyin
  • change management → predicts employee buyin
  • change management → moderates methodology integration
  • cost accuracy → predicts decision quality
  • methodology integration → influences cost accuracy
  • predictive analytics use → predicts decision quality
  • strategic alignment → predicts decision quality
  • employee buyin → predicts strategic alignment
  • decision quality → predicts profitable customer value
  • cost accuracy → predicts profitable customer value
  • profitable customer value → predicts shareholder wealth creation
  • decision quality → predicts shareholder wealth creation
  • risk management maturity → moderates shareholder wealth creation
  • external uncertainty → moderates predictive analytics use
  • strategic alignment → mediates shareholder wealth creation

The story

The reader A manager, executive, or performance-management practitioner who wants to improve their organization's performance and successfully execute its strategy.

External problem

The organization formulates strategy but fails to execute it, uses misleading cost data, cannot tell which customers and products are profitable, and drowns in disconnected data and obsolete budgets.

Internal problem

The reader feels frustrated, over-managed but under-led, uncertain whether decisions are right, and skeptical that the effort of change is worth it.

Philosophical problem

It is just plain wrong to keep making decisions on intuition, politics, and flawed information when the data, math, and tools exist to manage fact-based and create real value.

The plan

  1. Understand that performance management is a broad, integrated framework—not just dashboards.
  2. Communicate strategy clearly using strategy maps and derive a balanced scorecard with the vital few KPIs.
  3. Reform managerial accounting with activity-based costing to reveal true product, channel, and customer profitability.
  4. Apply customer value management to target the right customers and optimize marketing spend.
  5. Replace obsolete budgeting with driver-based planning and rolling financial forecasts.
  6. Integrate risk management, human capital analytics, and predictive analytics on a common business-intelligence platform.
  7. Drive adoption through rapid prototyping, communication planning, and behavioral change management.

Success

  • The organization executes its strategy, with employees aligned to what matters and able to answer 'How am I doing on what is important?'
  • Managers see accurate, transparent costs and profits and make better trade-off decisions.
  • Marketing spend is optimized across customer microsegments, growing profitable revenue.
  • The enterprise anticipates and mitigates risk, moves the dials rather than just monitoring them, and creates sustained shareholder wealth faster and smarter.

At stake

  • Continued strategy execution failure, executive job turnover, and drifting sideways below full potential.
  • Decisions based on flawed cost data, misallocated marketing resources, and unprofitable customers.
  • Obsolete budgets, disconnected spreadsheets, and reactive after-the-fact control.
  • Competitors who adopt performance management first capture the advantage while the organization stagnates or declines.

Questions this book answers

What is enterprise performance management and how does it differ from the narrow view of dashboards and financial reporting?
Why do executives fail to execute well-formulated strategies, and how can that be fixed?
How do the various improvement methodologies (strategy maps, scorecards, ABC, CRM, forecasting) integrate into a single framework?
Which customers, products, and channels are truly profitable—today and in the future—and how much should be spent to acquire, retain, grow, or win them back?
How can predictive analytics and risk management convert reactive control into proactive, anticipatory management?

Glossary

Integration of Managerial Methodologies
The degree to which multiple improvement methodologies are unified, interconnected, synchronized, and mounted on a common information platform rather than operated in isolated silos.
Use of Predictive Analytics
The extent to which the organization applies forward-looking analytics—correlation, segmentation, forecasting, what-if scenarios, optimization—to move from reactive control to anticipatory planning.
Managerial Accounting Cost Accuracy
The degree to which resource expenses are traced to products, channels, and customers via cause-and-effect drivers (ABC) rather than arbitrary broad-average allocations, yielding accurate, transparent cost and profit visibility.
Leadership Vision and Strategy Communication
The extent to which executives set direction, communicate strategy clearly, inspire and empower employees, foster trust and dissent tolerance, and lead change rather than merely manage complexity.
Behavioral Change Management
The organization's deliberate effort to alter employee attitudes and behavior—through communication planning, involvement, and buy-in—to overcome natural resistance to change.
Enterprise Risk Management Maturity
The degree to which the organization systematically identifies, quantifies, and manages risks—matching exposure to appetite across strategic, operational, financial, and hazard categories—and integrates risk with performance management.
External Uncertainty and Volatility
The contextual condition of rapid change, competitive pressure, commoditization, and market volatility that makes long-cycle planning unsuitable and raises the stakes for responsiveness.
Strategic Alignment of Work and Priorities
The degree to which employees' behavior, priorities, projects, and resources are aligned with executive strategic objectives, such that individuals understand how their work contributes to strategy.