If you cannot measure it, you may be in trouble!

June 17, 2015

weights and measures‘If you can’t measure it, you can’t manage it’ is a refrain that managers often hear but do not fully appreciate until confronted with a major challenge such as the complexity of a business transformation programme.  The need to diagnose the problems, stop the rot and prescribe timely and effective treatment, often quickly overwhelms management that is more used to reactive management of day to day events.

Driving through the strategy should be the focus of all management.  Performance management enables managers to maximise and sustain corporate performance by measuring and managing the drivers of future profitability.  Those drivers are what a business should invest in now to sustain and improve performance. The start point must be to quickly establish the necessary disciplines and approaches for the design and implementation of an effective management information system.  Such systems must comprise not only the key performance indicators (KPI’s), but also the execution management skills and processes to use them effectively in achieving operational and strategic objectives.

Silo’d Confusion

An organisation’s efforts to develop effective management information systems are often hampered by confusion caused by factors that include a one-dimensional, simplistic view of the problems.  For example:

  • The finance view‘All we need to do is supplement our financial information with a range of non‑financial          measures.’
  • The IT view – ‘All we need is a data warehouse and interrogation software to exploit the operational data.’
  • The management view‘All we need are better managers and staff.’
  • The staff view‘All we need is a business strategy and effective management.’

All these views may be valid, but the inter-relationships and dependencies between them are not identified and so critical thinking is impossible.  The absence of a universally accepted discipline for management information, similar to that for accounting which underpins the development and integrity of financial information, means there is limitless scope for confusion and paralysis.

A disciplined and structured approach to developing a performance management system must address the execution management processes, training and personnel issues to make effective interventions and encourage appropriate behaviours.

The Performance Measurement Framework

Business managers inhabit a practical world of reacting to day to day operational issues.  They may not haveThe Performance Management Framework the time nor interest in relating the management theories and measurement concepts that underlie the design of a performance management system.

The Performance Measurement Framework model links business objectives to the interventions needed to manage their achievement and gives managers a key to relating the concepts with the practical steps they can immediately take to develop their own performance measures.

The framework model is structured as a sequence of provocations linking business objectives with performance measures.  The performance measures feed the performance management process to actively manage the business on timely actionable intelligence.  Each of the provocations is addressed by practical approaches and quality assured by the pre-determined design principles.

The design principles reflect the values and behaviours that an organisation wishes to embed in all aspects of its structure, processes and relationships.

The Performance Management Process

A performance measurement system is often described as a ‘dashboard’, similar to that of a car.  Taking the analogy further, the performance management process ensures that the driver is sitting in the driving seat, knows how to drive and where he is going!  As with a car, the driver must plan the route and fuel the car, monitor the journey and take control with appropriate actions to ensure a safe and timely arrival.  Managers use just such a cycle to ‘drive’ through the business strategy.PerfManProc

The Performance Management Process is one of the tools Blue-Plate uses to support the KeyneLink Strategy Execution Management approach, and enable managers to visualise and understand the component parts of the process.

This conceptual understanding is a prerequisite to equipping managers to design and implement a performance management process that is appropriate for their organisation.


Bloomington, Luxembourg and No Change in 800 years

May 17, 2013

May 2013 Newsletter

All change at the FSA

From April 1st the Financial Services Authority was no more, having been split between the Prudential Regulation Authority and the Financial Conduct Authority.  Read more about what has changed and will it work to prevent more PPI scandals at The New Regulators are No Joke

Foreign travel

Bloomington Indiana

I had the pleasure of attending a KeyneInsight (www.keyneinsight.com)  Strategy Execution Management workshop in Bloomington Indiana.  After negotiating trains, planes and automobiles in getting to Bloomington from the UK, much was learned from the experience of other Keynelink distributors including, the benefits to Keynelink clients of:

  • a complete audit trail and details of performance progress meetings held between a manager and their subordinates. Such information has been successfully used in defence of legal actions taken by disgruntled employees.
  • leadership and management development, for example.

–  the power of having visibility of whether and how the key strategic initiatives are being supported and progressed throughout the organisation.

–  promoting regular conversations between managers and their subordinates.

  • turnarounds – where Keynelink is a key enabler in supporting a successful turnaround

Luxembourg

Luxembourg is a less complex trip than Bloomington and resulted in an enthusiastic response from a Life Assurer for Keynelink to support their current performance management system in providing:

  • Transparent structure and process

– clear alignment with strategic objectives and values

– consistent process discipline

– comprehensive metrics to maintain alignment

  • System support and data repository

– dynamic, fully-operationalised role definitions

– audit trail of issues

  • support for development of excellent management practice
  • evidence for contentious actions

High School

A similarly enthusiastic local high school wants a speedy implementation of Keynelink to support the management of support staff in performance appraisal system, culture change and provide the Head and Senior Management Team with transparency on progress with the strategic initiatives and individual performance.

Every organisation has a Strategy Execution Management “system”

…most don’t work and look something like this…

SEM Process

 

What does yours look like?

Target Operating Models

A recent project generated some new thinking in applying private sector target operating model concepts to a consumer protection focused public sector regulator subject to major change.  The top 5 lessons learned included:

  1. The customer value proposition through which a commercial strategy is operationalised must be considered in terms of the regulatory lifecycle; being the types of interactions that the regulator will have with the regulated community and the consumer.
  2. Strategy encompasses not only the governing regulations but also more importantly the way in which the regulations are to be applied.  It is this regulatory approach which is operationalised through the design of the target operating model and the regulator’s risk appetite and available resources.
  3. Think process not silo’d functions.  This is no different from a commercial TOM but the challenge is in how any new powers and the regulatory approach will be supported in a seamless way across the organisation and its boundaries.
  4. The relationships with other members of the regulatory family must also be considered and coordinated.
  5. Complete focus on protecting the interests of the consumer while fairly balancing the costs and impact on the regulated community.

Rules for the Conduct of Life

In a ceremony dating back to the 13th century, new Freeman of the City of London are presented with a Freedom certificate and a small red book of Rules for the Conduct of Life. The rules are for the use of “such Freemen of London as take apprentices”. Rule XXVI states that

“Where you are not able to finish a business without the help of others, call in speedily such persons to your assistance as are fit to be employed in it. The more hands are employed, the more work is done; provided they are managed in such good order as not to be a hindrance to one another.”

Regards

Jeff Herman