Frequently, an organisation’s performance management practices develop incrementally over time, as the organisation matures. This organic change can result in an approach to managing performance that does not fully align with the needs of the present organisation. In accelerating changes in performance management practices, we find the following are key success factors.
Understand the drivers of improvement. In our experience, improving performance management practices covers more than simply selecting a new set of measures. The performance management approach is the primary tool used to align activity, measure results and drive decision making. We find that designing the approach requires a careful match with an organisation’s way of working.
Our full performance management methodology is built on a combination of research and practical experience from all sectors. It is built on an integrated model that ties all the key components of successful performance management together. For a successful implementation, there needs to be a balance between each of these enablers.
Enablers of Performance Management
This model describes the enablers of performance management that need to be present for success:
- Leadership and Governance considers why improvements in performance management are wanted, the priorities of the changes and mechanism for delivering these. For example: Leadership coaching, Accountabilities and Stakeholder management.
- Objectives and Measures define what is important and the means of focussing and aligning the organisation. For example: Vision, Objectives, KPIs and aligning the organisation.
- Information and Insight looks at the information needed and whether it is available and the most is made of it to understand performance and take actions. For example: Reporting, Insight, Performance meetings and Decision making processes.
- Processes and Systems investigates the systems used throughout the organisation and the supporting business processes. For example: Data quality and supply, Budgeting and Planning processes, and resource management.
- Capabilities and Cultural aspects make sure that people are equipped and mobilised to work in the new regime and are supported in their efforts to do so. For example: Employee engagement, Incentives and rewards, and Communications.
Take a progressive approach. In working with our clients, we find that a progressive approach is necessary to improving management practices. Organisations follow a growth journey as their services expand and their stakeholders become more demanding and “market aware”. These different stages along the journey give rise to different management needs as the priorities of the business change.
The purpose is to drive actions and decisions. A common pitfall we encounter is that the measurement process becomes an end in itself. Measures exist to provide an insight into the performance of the organisation and drive informed decision making. This enables management to gauge the consequences of a decision and understand the levers of performance. We advise management to develop a predictive organisation that can identify and adapt to changing circumstances more quickly.
