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.


Execution Management vs. Performance Management

February 17, 2013

by Kelly Nelsen, Ph.D.

Performance management generally refers to measuring past performance and making an adjustment or two in order to increase performance next time. In the workplace, you perform to some standard, and your boss measures your performance to see if it met the standard.  Based upon the results of that measurement, you adjust your performance (or the standard) as necessary in order to meet it the next time around.  At its essence, it’s nothing more than an employee appraisal process that the human resources department typically owns.

Execution management is a bit different.  Execution is the act of doing something, and when you manage execution, you’re focused on managing an act rather than a result. That’s not to say that execution management is or should be about micro-management – far from it.  But shouldn’t management be about leading, guiding, and motivating people to greatness rather than simply judging them at the end?

Shouldn’t management be about leading, guiding, and motivating people to greatness rather than simply judging them at the end?

The Way Sports Teams Do It

Organizations usually set goals at the beginning of the year and then look at them again at the end of the year to see if they were met. Based upon this annual review, adjustments are then made for the coming year. But what if a football coach managed its players this way? The coach would set a goal at the beginning of the season to win 15 out of 16 games, let’s say, but only at the end of the season would he look back and discover that they only won six. That would be one sure way of getting fired as a coach, wouldn’t it? Instead, the players are coached throughout the game, and the game itself is reviewed in detail at its conclusion. This way, players can make adjustments as they go. Shouldn’t organizations work that way, too? Shouldn’t they practice execution management the same way that sports teams do?

Driven by Strategy

It’s not enough to manage the execution of individuals in an organization; rather, individuals’ activities need to be driven by the organization’s strategy and goals. Just as the individual football players’ activities are driven by the team’s, management’s, and owner’s goals, so must individual employees’ activities be driven by higher-level goals and strategies.

Unlike performance management, execution management is owned by senior executives. It starts with defining the strategy and continues with the execution of it. While the purpose of performance management is to determine how well employees are performing for succession planning, training, merit raises, and the like, the purpose of execution management is to successfully carry out the strategic plan in order to realize the organization’s vision. Because strategic plans are identified at the highest levels in an organization, execution management is the ultimate responsibility of the executive team. Performance management, on the other hand, is typically the ultimate responsibility of Human Resources.

If you want a system that merely looks at past performance of employees to see if they deserve a raise or a bonus, a simple performance measurement system will do. But if you want to manage the successful execution of your strategic plan, take a look at Keyne Insight’s strategy execution management system at http://www.keyneinsight.com.

Kelly Nelsen, Ph.D., is the CEO of Keyne Insight