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Performance
Management
Do I Need a Performance Management Program? What is it?
All organizations, public or private, must have the ability-and we believe the
obligation-to consistently meet the needs of their customers. To remain viable,
they must also continue to grow and sustain the delivery of value to their
stakeholders: Employees, partners, members, communities, and shareholders alike.
This is not an easy task, as it requires commitment to continuous, open-minded,
and self-critical assessment of how the organization is performing compared to its
strategic and operational goals.
Executives, middle managers, and line personnel must plan and act in ways that
move the company in the direction of these goals. At ThotWave, our approach to
performance management encompasses the full spectrum of how a company’s performance
may be assessed, from strategic, tactical, and operational perspectives.
To Manage...You Must Measure
Performance measurements are designed to hold managers responsible for the complete
business process, not just their own narrow silo of responsibility. Measurements,
usually in the form of metrics, let us know whether we’ve reached a goal, whether
and how fast we are approaching it, or when we are not even close or perhaps, off-mark.
Measurement is a practical business tool that accountants and
stockholders, especially, understand, but it is also something every human being
needs. Valid measures that provide clear, specific feedback enable us to direct
energy to appropriate tasks, protect us from making poor decisions, engage in
productive performance improvement plans, and improve throughout the organization-as
individuals, teams, divisions and units.
Strategic to Tactical to Operational
The performance management process is cyclical, from strategic to tactical and from
tactical to strategic. The performance management cycle includes setting strategic
direction and infusing that strategy throughout the organization, with each successive
layer supporting that of its higher level. This cascade of instilling strategy becomes
translated to explicit performance measures on every level, down to the work group
level and the individuals themselves.
This necessitates strategic-to-tactical goal setting.
Organizations need measures that target future performance goals in addition
to measures that communicate current performance. Some examples of what to
measure include operational risk, product order and fulfillment cycle time,
and client satisfaction. Determining measures for operational performance
management, for instance, means examining operational actions that drive
day-to-day business operations. Here, an application can continuously monitor
performance measures in order to detect actual or potential problems so that
swift decisions can be made to correct them. Detection may involve, for example,
sending an alert to a business user to inform him about a problem that requires
urgent action, routing an action message to an operational application to offer a
special deal on a product, or recommending specific services to a web customer.
Performance management can provide immediate and short-term return on investment
(ROI) to any company. This explains the vast interest in Gartner's Business
Activity Monitoring (BAM) concept and in business process management (BPM)
and associated business processing intelligence concepts and technologies.
Operational to Tactical to Strategic
Armed with a shared vision of what success means, everyone in the organization
will understand how their day-to-day activities contribute to that success.
Managers will focus both on improving business processes under their scope of
control as well as collaborating with those upstream and downstream in the
flow of products and services to the customer.
Each person is accountable-for their actions and that of their
peers. The results are improved products and services delivered to the customer
according to each one’s needs. Typically these criteria include economically,
quickly, safely, according to specifications, and with high quality.
The only way we can know if we are meeting strategic objectives
is through continuous measurement of the vertical and horizontal inputs, processes,
and outputs throughout the product development lifecycle. This is the tactical and
operational feedback that provides input into the process of validating and,
if necessary, modifying the strategic goals of the organization.
What are the Next Steps?
Performance Management is only possible when you have a combination of well-trained
and motivated people, optimized processes, and the appropriate technology.
ThotWave’s leadership and experience in leveraging business intelligence
technology to performance management enables your organization to execute a
performance improvement program.
Our technology will surface performance measures in real-time,
daily, monthly, quarterly, or just-in-time based on what is appropriate for your
business process. We follow an 8-step process for building the performance
management system. To ensure success, the scope must be very well defined
and stable so that the system returns tangible value early. Normally, one
business unit and a set of key measures that have data sources are identified.
This initial effort can be referred to as a pilot, so that the concept, process,
and technology are proven without the client shouldering excessive risks
associated with larger implementations.
ThotWave’s 8-Step Process:
Building and maturing the performance management infrastructure
- A two day assessment and readiness evaluation is completed.
Success criteria are clearly identified in order to assist with planning the
scope of the pilot effort.
- After the project planning document is complete and signed off,
key executives and managers are interviewed to understand financial objectives,
corporate themes, shared services with other SBUs, other relationships, and opportunities
for improvement.
- The business unit’s strategy is documented; objectives are
identified and collated according to business perspectives that have been
decided on (i.e. Financial, Knowledge and Growth, Process, and Customer).
The team then determines cause and effect relationships between the objectives.
- The executive team selects and designs strategic, tactical,
and operational measures based on the scope of the pilot.
- The team cascades the performance system at appropriate
levels within the business unit.
- The performance management implementation plan, including the human,
process, and technology components, is developed by the team.
- The new system is implemented, tested, and accepted per
the success criteria and scope definition.
- The performance Management Process Cycle is now leveraged
to grow and scale the pilot to include other prioritized business units.
Screen shots of ThotWave Performance Management Dashboards:
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