Ingredients for a Performance Management System to Succeed

This is the transcript of an in-person customer seminar hosted by InetSoft on the topic of "Ingredients for a Performance Management System to Succeed." The speaker is Christopher Wren, Principal Consultant at TFI Consulting.

This presentation is really going to talk about three things. What are the necessary ingredients for a performance management system to succeed? What are the challenges that you face as you build a management system like this and what are some best practices that you can take home with you on Monday morning and apply?

I also like to start with the quote that I think captures the essence of a performance management system. And I’m going to talk about both performance planning and management systems, and I’ll share with you as we go a little bit further along why I think it’s important to link those two into an integrated system rather than treat them as separate ones.

Here is the first part of the quote, we’re working so hard to make sure that the right things are done right. What is that? You know, that’s about tactics and operations and processes and efficiency. It’s the measure of are we doing well with the tasks that we have set about for ourselves to do.

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Answer The Strategy Question First

The bigger question is, are we doing the right things in the first place? That’s a strategy question. I will argue with you that it is necessary to answer the strategy question before we can ask the process question. All of our work with clients starts with a high level strategy and strategic thinking process -- a process of discovery before we get down to worrying about management and then operations.

We have to get strategy right and I know the research says that you don’t have to worry about that. Most organizations fail because they don’t execute very well. I’ve been doing this for about 10 years, and that’s not my experience at all. Most of the organizations that we have worked with over those many years claim to have strategy which is usually little more than the sum of all the stuff we’re currently doing by the way. We call that strategy.

And in fact, when you asked them to connect the dots between mission and vision and strategy and core values and the customer value proposition, what you get back is a big sort of muddle. So the first thing that we always do with folks is spend time getting those dots connected before we build a balanced scorecard system as a management tool.

We want to make sure that we’ve used the process of discovery to help them get their strategy lined up correctly. I have yet to work for a client where we’ve not made a change in either the vision, the mission, the strategic themes or the core values as a result of this thinking process. I’ve yet to meet a client. So that’s the way we’re going to proceed on this.

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Start With Strategy and Then Work Down

We’ll start with strategy and then work down. Why do we do this stuff in the you know in the first place? I mean, simply put, we want to get better alignment in our organization, and we want to improve performance. And most of the organizations that I have worked with, you know, the vectors of energy look like this. Right. We got a lot of folks working toward a conclusion and recommendations. They are on the same path, but an awful lot of energy is going the wrong direction, or it’s not all going in the smooth direction.

What we are trying to do is get all those arrows aligned. We’re trying to get folks working together. That’s a communications issue. That’s a change management issue. It’s a performance measurement issue. It’s all of those things. But the key is let’s get folks doing the right things and then get folks doing things right, it’s a two step process.

I’ve thrown in some cartoons here as well as in the slides that you have in your handout. So the numbering won’t be exactly the same if you have a handout of the slides. Let’s take a look at what we mean by alignment. This is from some work we did with a non profit client.

They were struggling with not having a shared vision, not having performance measures, having too many initiatives, and no prioritization. So they asked us to help them, and what we came up with, with them, was a mission that was directly tied to a vision. A vision was directly decomposable or divisible, if you will, and there’s some specific focus areas called strategic themes, the pillars of excellence of this organization if you will, and this is a government agency.

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Tie a Strategic Result to a Theme

So now we’ll take one of those strategic themes, tie a strategic result to it, so we can answer the question how well we know success when we see it. Right? Because it’s not enough to talk about this stuff in the abstract. You have to be able to answer the question, how will we know. So now we have a vision that’s built on two pillars. We have a strategic result tied to a theme.

Now, let’s take that result and translate it into some specific strategic objectives. Strategic objectives are the DNA of strategy. They are the building blocks of your strategic themes and of your business strategy. That’s the way we connect the dots going from high altitude mission and vision, down to the shop floor.