#39 Have You Got What It Takes To Be A Performance Measurement Leader?

There are no professional guidelines (yet) which define what it means to be a Performance Measurement Practitioner - not like there are for Accountants, Project Managers, Finance Officers and Engineers. So there's little wonder that there are so many talented and capable performance measurement practitioners out there who are underselling themselves.

Are you one of them? Find out with this quiz:

Q1: How much of your time do you spend - or should you spend - on performance measurement activities?

Performance Measurement Practitioners routinely spend at least 40% of their work time devoted to a broad range of performance measurement activities, including the selection of measures aligned to strategy, collection and collation of performance data, analysis and reporting of performance, interpreting and using performance measures to improve performance.
If you spend a good deal of your time on at least half of the following activities, then you very likely should be calling yourself a Performance Measurement Practitioner:

• data collation
• performance report production
• designing or developing performance dashboards/scorecards
• performance data analysis
• helping people choose KPIs/measures
• linking KPIs/measures to strategy
• explaining or teaching performance measurement concepts to colleagues
• using performance measures to guide performance improvement projects/activities

Q2: Have you had some exposure to structured performance measurement methodologies?

Performance Measurement Practitioners will have at least a rudimentary working knowledge of one or more formally structured and tested performance measurement approaches, such as the Balanced Scorecard, the Six Sigma Scorecard, the Performance Prism, PuMP® or the Performance Measure Blueprint^(TM).
This means that you:

• have read the book or done the course to learn the approach
• have lead, been involved or witnessed close-hand the implementation of the approach
• can successfully describe how this approach works to a colleague

Q3: Can you design and implement simple business projects?

Performance Measurement Practitioners need to have reasonable project management skills and experience, because managing a performance measurement implementation, and a corporate performance management system, needs planning of tasks, milestones and resources.
You'll have gotten this skill if you have:

• been a project manager
• worked in a small project team on a project that was well-managed
• taken a project management course
• lead a group of people through the steps to define, analyse, design, implement and successfully achieve a solution to a problem

Q4: Are you confident with your presentation and facilitation skills?

Performance Measurement Practitioners need to feel confident with presenting to groups, and also managing group interactions and dynamics in workshop settings, because they run a lot of meetings with teams to plan and implement various aspects of the performance measurement system.
There are several ways you'll know you have these skills too:

• taken a presentation skills course
• learned how to engage an audience through the failures and successes of your personal experience
• role-modeled a manager or other colleague with great presentation/facilitation skills
• get regular feedback from people in your "audiences" on your great presentation style

Q5: Can you speak about performance measurement in a way that engages your colleagues?

Performance Measurement Practitioners work with internal client teams to design and implement the organisation's performance measurement system - they don't do it on their own! So they must be able to engage their colleagues to commit to implementing the performance measurement process with them.
You get a 'yes' to this quiz question if you have:

• offered advice on performance measurement that your colleagues acted on
• opened people's minds to what good measurement means, and why it matters, through your conversations with them
• offered to facilitate meetings with people to help them with measures, and they accepted
• given feedback to colleagues on their measures, which was openly received and considered
• often been sought out for advice or tips or resources to do with performance measurement

Q6: Do you feel passionate about performance measurement?

Performance Measurement Practitioners have a passion for performance measurement and the profound transformation it can effect for an organisation. They also have a passion for learning and refining their capability, as a significant component of their career path.
You know you have the passion when you:

• collect books, articles, newsletters and websites on performance measurement for your personal library (and read them!)
• find yourself automatically asking people when they talk about goals, "And how will you measure your success with that?"
• feel a surge of motivation and inspiration when you are reminded of how organisations have been transformed by measuring the right stuff
• develop your own little systems to help you with measuring performance, like your own KPI library, templates and ready-to-go PowerPoints

Just like any quiz, the value is not in right or wrong answers. The value comes from considering the questions and seeing what comes up for you. So, how do you feel NOW about having what it takes to be a performance leader, or Performance Measurement Practitioner?

TAKING ACTION:
What value would being a Performance Measurement Practitioner have for your career? Start with describing yourself in your ideal role 3 to 5 years from now, and then describe how you got there. You'll be surprised how powerful it is to plan from the end-point looking backward, compared with the traditional approach of planning from the start-point looking forward! (And you may want to take another look at the PuMP Certification Program for 2010 - perhaps you ARE ready!)

#38 Do You Really Need A Corporate Performance Office?

They're popping up like mushrooms after ground-soaking rains: the Corporate Performance Office, a small team of people devoted to developing, coordinating, and facilitating their organisation's performance measurement and management system, from top to bottom, left to right, and back to front. But do YOU really need one too?

Let's take a look as some of the most compelling "pros" to have a Corporate Performance Office, and trade them off against some of the more deterring "cons" not to.

PRO: Credibility. A CEO endorsed venture like a Corporate Performance Office puts meaningful performance measurement on everyone's radar. Coupled with a team that has respected qualifications and experience in performance measurement, and an official and clearly articulated role in coordinating and facilitating performance measurement organisation-wide, this gives performance measurement lots of healthy credibility.

PRO: Organisation. A single place to go looking for useful templates, time-saving tools, up to date information on strategic goals and current measures, the latest performance data - imagine that! A good Corporate Performance Office will be the single port of call for all things measurement, conserving the blood, sweat and tears of managers and employees to pour into operational priorities instead.

PRO: Efficiency. When the performance measurement system has a central hub like a Corporate Performance Office, the potential for erradicating duplication of effort in measure design, data collection, analysis and reporting is grand. Who's going to complain about having to spend less time copying and pasting data from one spreadsheet into another, and reformatting the monthly report every month? Their time is better spent improving performance, not reporting it.

PRO: Consistency. When the Corporate Performance Office facilitates a consistent process for designing, implementing and using performance measures right across the organisation, it makes it heaps easier for everyone to link to strategy, collaborate across functional and departmental boundaries, and no one is left behind to struggle with outdated measurement methods.

PRO: Cost Decrease. The hidden costs of mountains of data management, maintaining myriad dashboard systems, and manual performance reporting aren't to hard to expose, and when you do expose them, you can see how potent a Corporate Performance Office - focused on organisation, efficiency and consistency - would be in stripping back these costs.

CON: Cost Increase. Employing people in performance measurement roles full time has a cost. But this cost needs to be seen in the context of the hidden costs that are already there, like duplication of reporting, rework and wasted time in finding meaningful measures, missed opportunities to improve performance due to measures not being linked to strategy and operational priorities.

CON: Threat. Some people won't like having the joys and freedom of ad hoc performance measurement taken away from them. They won't buy in to new methods of measuring and managing performance, even if they work better. If that's the attitude, then maybe you really do need a Corporate Performance Office to change the performance culture!

CON: Finding People. It's true that the field of performance measurement hasn't been professionalised yet, and that makes it hard to find people with convincing skills in performance measurement and management. This can be a setback for creating a Corporate Performance Office, but there are programs out there for acquiring these skills, and many people whose experience means they're at least part way there already.

TAKING ACTION:

Grab some coloured pens, unlined paper, and a coffee (or beverage of choice) and fantasise for a while: How would YOU design your Corporate Performance Office if you got the green light and a clean slate?

#37 The Third of Three Things I Don't Like About The Balanced Scorecard

In the first part of this three part series, I posed the first challenge that I face with the Balanced Scorecard: it is hard to cascade meaningfully. And in part two was the second challenge: the Balanced Scorecard perspectives are too limiting.

The third thing I don't like about it is this:

CHALLENGE 3: The Balanced Scorecard is not a performance measurement methodology.

How dare I utter such a blasphemous suggestion!

But I truly beleive it. The Balanced Scorecard is, in my book, far more a strategy design methodology than a performance measurement methodology. And here's why: A performance measurement methodology has to go much further than just suggesting how to determine a balanced and cause-effect linked strategy.

A performance measurement methodology has to help you design and implement and use performance measures, too:

1. It has to help you find meaningful measures, particularly when the strategies seem at first to be immeasurable. There are many Balanced Scorecards that are filled with lame, vague measures when they don't have to be.
2. It has to help you nut out the details of your measures, so they can be implemented as intended. Too many of our performance measures are poor substitutes for what we originally intended them to be, because not enough thought went into the appropriate calculation and data requirements.
3. It has to help you analyse and report your measures so they clearly and engagingly tell the story of actual performance.
4. It has to help you engage people to measure performance willingly and honestly, and as easily as possible so the measures have the best chance of truthfully telling the story of performance.
5. It has to help you validly interpret the quantitative information that the performance measures are providing, so decisions are based on patterns and trends instead of knee-jerk reactions to individual points of data.

The Balanced Scorecard does nothing to help you with these challenges. It isn't a performance measurement methodology - it's a strategy design methodology.

But before you think I'm on a one-woman mission to bag the bejesus out of the Balanced Scorecard, let me say this: I don't advocate you don't use it, I just want you to be aware of its limitations despite its popularity, and make sure you take from its strengths and compensate for its weaknesses.

TAKING ACTION:
Do you have a step-by-step performance measurement process to populate your Balanced Scorecard with meaningful measures, and then implement and use those measures to execute and achieve the strategy implied by your Balanced Scorecard?

#36 The Second of Three Things I Don't Like About The Balanced Scorecard

In the first part of this three part series, I posed the first challenge that I face with the Balanced Scorecard: it is hard to cascade meaningfully.

The second thing I don't like about it is this:

CHALLENGE 2: The Balanced Scorecard perspectives are too limiting.

The four perspectives that comprise the Balanced Scorecard are Financial, Customer, Internal Business Processes, and Learning and Growth. And these four perspectives work in a cause-effect flow, from Learning and Growth up through to the Financial perspective.

The idea is that you design your strategy across these perspectives, and you choose measures (KPIs) aligned to this strategy, and hence you have your Balanced Scorecard.

Do Four Perspectives Developed Over 15 Years Ago Still Apply?

In an age where social responsibility, environmental responsibility and systems thinking are driving much of our thinking about what matters in managing organisational success, I struggle to accept that all that matters in a strategy can fit into the Balanced Scorecard's four perspectives.

And indeed, in the numerous situations where I've seen the Balanced Scorecard used, that's exactly the way people behave: they try and fit their strategy into it. Alternatively, they create their own perspectives, often around Critical Success Factors that emerged from their business scanning and SWOT analysis.

Alternative Ways To Design A Corporate Strategy.

One model I really like is designing perspectives around key stakeholders (like customers, shareholders/owners, strategic partners, employees, and the community) and their definitions of the value the organisation or company provides them. It's a great model if social responsibility is important to, at least as much as profit is.

The Performance Prism is one such stakeholder model.

Another model that's quite common is TBL or Triple Bottom Line, which moves away from profit as sole definition of organisational or company success and brings in a new idea of balance with the People and Planet bottom lines companioning the Profit bottom line.

Perhaps if you apply some systems thinking, examine your internal and external business environments, and take your SWOT analysis seriously, you will see what really matters for your organisation's or company's success. And if you then explore how each business process and function impacts those strategic results, you'll more naturally cascade the strategy.

One More Challenge...

In part three of this series, I'll discuss the final thing I don't like about the Balanced Scorecard, and again will suggest some tips for compensating for this challenge.

TAKING ACTION:

In using the Balanced Scorecard, what important results are you ignoring because they don't fit? What results are you focusing on and measuring, because you think you should have something in each of the four perspectives of the Balanced Scorecard? Let's continue the discussion, at the Measure Up blog!

#35 The First of Three Things I Don't Like About The Balanced Scorecard

We have to applaud the Balanced Scorecard for the evolution it triggered in organisational performance measurement and strategy execution. But no model is without its limitations.

Certainly, on account of the Balanced Scorecard, we're now seeing the measurement of non-financial results rather than just the financial, and we're seeing strategies laid out in logical and cause-effect linked plans designed for execution rather than shelving.

But a few challenges continue to baffle those that embrace the Balanced Scorecard way. One of the challenges is easy and quick to remedy within the current Balanced Scorecard theory. But the other two, I believe, require a more radical re-think.

In this first part of a three part series, we'll look at one of those challenges that does indeed need a more radical re-think.

CHALLENGE 1: The Balanced Scorecard is hard to cascade meaningfully.
 
You might argue with me on this point, because part of the Balanced Scorecard's claim to fame is it's focus on strategy execution and cascading strategy to operational levels. But those famous four perspectives that were the revelation of this framework are also the limitation on meaningfully cascading strategy.

What Happens Is "Mini-me" Syndrome.
 
I call it the "Mini-me" syndrome (inspired by the Austin Powers movies), where what ends up being cascaded are localised scaled-down copies of the corporate scorecard. Each department or team has the same perspectives as the corporate scorecard, almost the same strategy map, but tailored to the scope of their work.

If injury reduction is in the corporate scorecard, then every department and team has injury reduction in their scorecard: even those departments where injury risk is infinitesimal. If cost reduction is in the corporate scorecard, then every department or team has cost reduction in their scorecard: even those departments (like Human Resources or Process Improvement, whose costs must increase in order for other areas' costs to decrease.

That's not true cause-effect thinking, and it leaves many managers and employees bemused and cynical about having to measure things that don't really matter to them, and that don't really focus on their specific and unique contribution to the corporate direction.

Additive Thinking Is Not Cause-Effect Thinking.
 
When the focus is on maintaining the four perspectives in everyone's scorecard to link up to the corporate scorecard, the attention has moved away from where it needs to be: focusing on the performance results and process improvements that have the highest leverage to achieve the corporate strategy.

What happens instead is a collection of additive scorecards, where you can add up or combine the metrics from scorecards across the departmental tier, and end up with the values for the corporate scorecard. Likewise, you could add up the add up or combine the metrics from scorecards across teams within a department, and end up with the values for the departmental scorecard. This isn't cause-effect thinking. It's additive thinking.

Cascade True Cause-Effect, Not The Scorecard.
 
To apply true cause-effect thinking, we have to let go of structure. We have to openly explore and analyse how the performance of a part truly does impact on the performance of the whole. The four perspectives of the Balanced Scorecard don't encourage that open exploration and analysis, and that's why we have the Mini-me problem.

I haven't found a sensible and easy way to help departments and teams cascade the Balanced Scorecard in a way that's sensible for them and truly aligned to the corporate direction. Instead, we use a more open approach called Results Mapping, which encourages them to start with a conversation about the corporate direction (or scorecard) and explore the question "How and where do our results and our processes most impact on the corporate direction?"
Two More Challenges...
In parts two and three of this series, I'll discuss two more things I don't like about the Balanced Scorecard, and suggest some tips for compensating for these challenges also.

TAKING ACTION:
Where are you trying to cascade the Balanced Scorecard? Is it making sense to the teams it is cascading to? Is there anything in their scorecard that isn't really that important, or anything missing that actually is important? What questions are you asking to guide the way that strategy is cascaded in your organisation or company?

#34 The 8 Steps to Build Buy-in to KPIs

You're not truly implementing performance measurement - nor getting the gains it will deliver - if you don't have your staff, your colleagues and your managers engaged. Nor do you have to wait until they are engaged before you get started!

Adapting John Kotter's process for leading change, which he details in his book "Leading Change", here are 8 steps you can follow, as the performance leader that you are, to engage people in measuring performance:

STEP 1: Find an Urgent Performance Problem

Usually people won't give their time to measuring performance because it's never seen as urgent enough, even if they do think it's important. So create a burning platform: find, point out and fan the flames of a performance problem that needs fixing, like NOW!

STEP 2: Create a Powerful Measures Team

Don't try and lead it alone. You need a support team of influencers in your company organisation to give the performance measurement initiative credibility and fuel.

STEP 3: Describe Your Vision of Performance Measurement Success

People don't care about measures, they care about results. So what are the results you want to get by measuring? How will yours and their world be different if you succeed?

STEP 4: Sell the Vision of Success

You cannot succeed as a performance measurement practitioner unless you have marketing skills. It's one of the most challenging topics to excite people about, and marketing is the means to reframe it to something more enticing than just numbers and graphs.

STEP 5: Expect Resistance, and Be Persistent

You won't get everyone engaged, and there will be people and circumstances that try to slow your progress. Tenacity and persistence (with a smile) is what you'll need along the way. Don't give up!

STEP 6: Start Small & Punchy

Don't aim for a complete corporate performance measurement system if the vast majority of people don't feel engaged in measuring. You'll move faster if you start smaller, on individual performance problems or goals. Momentum will build exponentially as you make progress.

STEP 7: Sell the Performance Wins

Marketing again: and this time it's to make sure you keep showing people the benefits of performance measurement. Talk about the real (measurable!) improvements that have been made by measuring and focusing on what matters. Create hunger for more.

STEP 8: Make Measuring Performance Business-As-Usual

Measurement is actually everybody's job, so make it easier for that to happen. When engagement levels pick up, start making training and templates and other time-saving resources available to support people to measure and improve performance for themselves.

TAKING ACTION:
Look our for a new course coming up soon, where we'll go deep into these steps so you can develop and implement your very practical and very realistic performance measurement engagement plan. Post a COMMENT on this article, to share your experiences with building buy-in.

#33 Three Types of Performance Measure Relationships

If you think about when organisations work well, it's because all the parts are coordinated together and managed as an integrated whole. And that's a very good reason why we ought to treat our performance measures the same.

By understanding how measures are related to one another, you increase their power to help you understand and diagnose performance, and thus how you can report those measures together to make performance understanding and diagnosis easier.

RELATIONSHIP TYPE 1: Cause-Effect

As the most commonly talked about relationship between measures or KPIs, the cause-effect relationship isn't too hard to understand. It simply means that when one measure improves or deteriorates in performance, it causes another measure to improve or deteriorate in performance as a consequence.

For example, reducing rework can cause costs to reduce; improving recruitment of talent can cause workforce capability to improve; if employee engagement slides then it can cause customer satisfaction to slide too.

RELATIONSHIP TYPE 2: Companion

Measures have a companion relationship when they each tell a part of a complete story of performance. If you relied on just one of the measures, you wouldn't have a full enough picture to take the best action.

For example, number of new prosects and prospect conversion rate are companions to track a marketing process; customer lifetime value and number of active customers are companions to understand drivers of profit.

RELATIONSHIP TYPE 3: Conflict

Because you can't have your cake and eat it too, you often can't maximise the performance of any one measure. Other measures of performance can pay the price, and that's where you get conflict relationships between measures.

For example, improving workplace safety can conflict with on-time delivery to customers; reducing call handling time (in a call centre) can conflict with first call resolution; improving product quality can conflict with cost reduction.

TAKING ACTION:
Look at one of your organisation's performance reports, and the suite of measures or KPIs it includes. How are these measures related to one another? Does this appreciation of the relationships suggest any opportunities to improve the way your report the measures, so they are more useful?