It’s not performance measures, nor dashboards, nor informed decisions. Those are just outputs. The outcome of performance measurement is that the right things are being improved, across the whole organisation or business, and regularly.

How would you measure that outcome? The simplest measure I can think of is the percentage of people in the organisation who are regularly making measurable improvements in the performance results that are strategically important or mission-critical. This measure is called the Performance Excellence Score.

How do you improve that outcome? You need to improve your approach to performance measurement to better engage people in measuring what matters, to give them better skills and tools to do it well, and to make it a more natural a part of doing their job. And to help you plan and monitor your progress, you can use your Performance Excellence Score and benchmark which stage you’re at on the Performance Measurement Excellence journey.

Stage 1 is Appreciation. If your organisation or business is moving through the Appreciate Stage, it’s likely that there are few, if any, good measures of performance. People don’t understand what to measure or why they should do it. Measurable performance improvement is uncommon. Your priority is to give people reasons to appreciate the value of measuring performance.

Stage 2 is Engagement. Here, more and more people are able to describe the mission-critical and strategically important results for the organisation or business and how they contribute to them. A few areas are attempting to measure and improve those results. Your priority is give people quick and easy ways to measure just a few useful things, to nurture their engagement in measuring.

Stage 3 is Commitment. You’ll have some ad hoc areas measuring mission-critical and strategically important performance results, and some of the “quick win” performance improvements are generating interest among other areas. Deepen and broaden the commitment by teaching more people how to have similar successes with performance improvement.

Stage 4 is Focus. The purpose of performance measurement as a driver of continuous improvement is understood more widely, and there are quite a few areas starting to use meaningful performance measures to improve performance. Share case studies of measurement successes to inspire and guide people, and put a lot of emphasis on aligning their measures with the strategic direction.

These first four stages parallel the development of a performance culture that is nurtured through quick wins to raise awareness of what good performance measurement is really all about, and basic guidance in how to develop good measures. A reasonably strong performance culture is an essential foundation to lay before you worry too much about the technical side of measuring.

Stage 5 is Alignment. A cross-section of people throughout the organisation are setting up performance measures that align to strategy, and they are using them to improve performance toward targets. It’s now time to develop a corporate-wide approach to performance measurement, test it, and get it ready to roll out.

Stage 6 is Capability. Most of the organisation is using performance measures that align to strategy, with many areas showing real performance improvements and achieving targets. Here, your priority is to systematically train people in how to use your corporate performance measurement framework.

Stage 7 is Integration. The alignment of performance measures to strategy and to business processes is strong. Improvement in process performance routinely leads to improvement in mission-critical or strategically important areas. Start embedding your performance measurement framework into business planning, strategy execution and performance reporting.

These three stages happen when frameworks for an organisation-wide performance measurement approach are designed, tested and standardised. When you have a unified approach, it’s easier to deploy and to improve.

Stage 8 is Evolution. Performance measurement is a natural part of everyone’s job, and they are consistently reaching or exceeding targets in mission-critical or strategically important areas. Set up the systems and routines to continually monitor how your performance measurement framework is working, treating it like you should any other formal business process.

Stage 9 is Acceleration. At this stage, performance measurement is as natural a part of doing business as financial management. Performance measurement is managed as a formal business process that is, itself, routinely measured and improved to better achieve performance targets. The idea here is that you focus improvements in your performance measurement process on the outcomes of achieving stretch targets, faster and with fewer resources. This is performance excellence.

These last two stages happen when there are well designed and implemented systems for formally managing and continually improving your performance measurement process as a natural part of doing business.

Can you see how these stages logically build on each other, and that you need to be very careful about when and how you plan your journey to performance excellence?

TAKE ACTION: Learn how to find out your current stage of Performance Measurement Excellence, and how to improve it. Then ask yourself this question: What are the best three things I can do in 2012 to move closer to performance excellence?

IN THIS EPISODE:

Upcoming Events: 2012 Performance Measure Blueprint Workshops, and Online Programs.
Practical Tip: Performance Measures – From Awful to Awesome
Your Questions: Jo asks how to focus planning on outcomes, not activities.
Getting More: Getting Started, The Wrong Idea, 8 Steps to Build Buy-in

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IN THIS EPISODE:

Upcoming Events: Free Webinar – Is Your Strategy Strong Enough to Measure?
Practical Tip: Why do YOU Measure Performance?
How-to Resources: How to design useful and usable performance reports…
Your Questions: Andy asks – Do you keep measuring after reaching your goal?
Getting More: Reach For The Sky! (Target Setting), KPIs Should Make You Feel Uncomfortable!, Using Targets to Set Your Success Trajectory

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Key #1: Start small

Zoom in on a single goal or performance result and work to only measure that. They say a bird in the hand is worth two in the bush, and I say a measure you can use right now is worth dozens you’re putting off until later.

Key #2: Commit

Lock it into your diary the tasks to choose that single goal or performance result, to design its performance measure, to get the data and graph it, to use the measure to improve performance. Keep a reminder close to your person at all times about why it matters (a note, a picture), so your commitment stays true to real performance improvement and you don’t just jump through performance measurement hoops for the sake of having a measure.

Key #3: Find those who know

Make a list of all the experts or specialists or authors or colleagues who have succeeded to measure the right things and improve performance. Learn from them, take their advice, model their approaches so you don’t waste time reinventing wheels or falling into traps.

Key #4: Build gradually

Start with meaningfully measuring a single goal, and when you’ve succeeded at that, continue with two goals, and when you’ve succeeded at those, continue further with four goals. Practice takes multiple iterations of action learning: select an approach, try it out, learn from the results, improve the approach.

Key #5: Make mistakes

Make mistakes, but make new ones. Don’t repeat the mistakes that others have already shown you how to avoid. If you’re stuck on how to do something, then design a little experiment and try it out. Learn, whether it fails or succeeds.

Key #6: Balance, not sacrifice

Yes, you’re super busy. Yes, your colleagues are super busy. That’s not a reason not to measure performance. It’s an excuse. The idea is to take the time you can get. Give 15 or 30 minutes to design a better measure this week, rather than delaying for months until you have a full day to design 10 better measures.

Key #7: Have a support system

Form a Measures Team of four to six volunteers in your business or organisation and meet weekly or monthly to share the performance measurement workload. Grow a network beyond your organisation of fellow performance measurement practitioners for sanity checks and inspiration. Find and use templates that save time. Be organised so you always make the time.

Key #8: Blinders on

People have more objections to performance measurement than just about anything else. They’re very well practiced at saying why it doesn’t work, why it fails, why they can’t do it. Don’t let anyone’s objections get into your head. Hold on to your beliefs about why measuring matters, how it can work, what the true value is in doing it.

Key #9: Enjoy it

Stay connected to the reason why we measure performance – ongoing improvement and excelling at what our organisations exist to do. Rise to the challenge and enjoy the success of making things fundamentally better. Experiment with ways to inject fun into performance measurement tasks.

TAKE ACTION: Is there just one of these nine keys that resonates with you, that feels like improving it would make a noticable difference in your performance measurement success? Give it a two-week focus, thinking about it each day, coming up with ideas to strengthen your ability to do it, testing those ideas. Aren’t you tired of waiting for the planets to line up before you make some real-deal performance measurement progress?

If you only measure what you already know you can achieve, those measures or KPIs probably won’t take you any further. They’re just confirming that things are as you expect. They’re not pushing you to try harder, think smarter or reach higher.

Ever since I was 14 years old, running has been my favourite sport. Over the first 26 years, I managed to get my 10km time down from 60 minutes to 54 minutes (I was a “jogger”). But over the last 2 years, my 10km time has gone from 54 minutes down to 45 minutes. Even though I have always measured my running performance and strived to improve it, I had to train harder and smarter to accomplish the bigger improvement over the last 2 years and graduate from “jogger” to “runner”.

Some of my training runs over these 2 years have pushed me to the point of almost throwing up. Many of my training runs have pushed me beyond my comfort zone, to a point where I’ve really had to talk myself into continuing. But that’s how you get stronger and fitter and faster – by going outside your comfort zone. I didn’t do that during the first 26 years – I just went out and jogged about the same distance and speed each time.

It’s really no different in business. If you want better results, you have to get better at producing those results. Too many people think they can buy better performance with a bigger budget, or more staff, or better resources. But the only way to truly improve performance, to get better results that will last, is to go outside your comfort zone and train yourself to work harder, think smarter and reach higher.

I’m not trying to contradict the “work smarter, not harder” mantra, either. It’s just that there IS a certain amount of effort you have to invest before you can work smarter, to make true change happen and stick. It will feel stressful, but stress is what makes you stronger, as long as you don’t go overboard with the stress.

Whatever it is you’re measuring (customer satisfaction, cycle time, costs, revenue, rework, error rates, widgets per day, whatever), are you measuring it to prove what you are already doing, or to strive for better, even if you’re not yet sure what it will take to get better?

When you push outside your comfort zone (sensibly), you get stronger, you get more capable. And a higher level of performance becomes the new norm. Your comfort zone is bigger. That’s what I think the real benefit of KPIs and performance measures is: to inspire us to keep expanding our comfort zones so we continually improve the results we want most.

TAKE ACTION: Stocktake your existing suite of performance measures or KPIs and honestly appraise which ones are inspiring you to expand your comfort zone and achieve more, and which ones have you aiming for where you already are.

IN THIS EPISODE:

Article: KPIs Should Make You Feel Uncomfortable!
Q&A: How to measure for continuous improvement?
Quick Tip: Set 3 targets for each KPI.

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IN THIS EPISODE:

Feature: 3 Things You Must Have Before KPIs Can Work.
Q&A: How do you implement KPIs efficiently?
Quick Tip: The Power of a Measures Team.

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People don’t use the KPIs, they complain about them, and even fail to bring them to life (that is, report them). That’s because at least 3 important must-haves are missing.

MUST-HAVE #1: A climate of trust.

For a lot of people, KPI is a dirty word (well, acronym to be accurate, but let’s not get distracted). They have all manner of bad experiences anchored to that word and as a result they don’t trust you when you say that KPIs are good for them and good for the organisation.

Ask yourself this question: What will the measures be used for? And be honest when you answer it. You really need the right reason to measure before KPIs can work for you. The right reason is organisational performance improvement. The wrong reason is controlling or managing people’s performance.

MUST-HAVE #2: A clear strategy.

You can really measure just about anything and lots of people try. Or at least they’ll measure just about everything that’s easy to measure. Or that has already been measured in the past. Or they’ll measure whatever they have data for. But they’re rarely measuring what matters.

All performance measurement should be driven by the strategic direction and priorities for the organisation. Only measure what you should, can and will do something about. If you shouldn’t improve it, can’t improve it or won’t improve it, then don’t measure it.

MUST-HAVE #3: A performance measurement champion.

It’s all well and good to train people how to measure performance, to create templates for KPIs and to invest in dashboard software. But no performance measurement project ever gets real traction just by throwing resources at it. It needs to be given serious priority.

When you have a CEO or Executive who believes that measuring what matters is essential to success and is willing to shout from the mountain tops that measuring what matters is essential to success, as well as give her or his time to measuring what matters, you have a chance.

TAKE ACTION:
How much trust do you have in your organisation around performance measurement? What’s limiting it? How clear is your strategy? What would it take to make it more easily measurable? Do you have a performance measurement champion? How could you influence the right people to take on that role?

May you be motivated and sufficiently focused to truly make a real difference with performance measurement this year, beyond your wildest dreams:

KPI Resolution #1: Toss the time-wasting measures.

A version of the spring-clean, you could review all your existing KPIs (if inclined, stocktake them all) and then use a set of criteria to cull those that aren’t worth the pie charts they’re plotted on.

KPI Resolution #2: Challenge at least one weasel word every day.

The first person, each day, who utters a vague and meaning-devoid word like efficient, effective, sustainable, engaged, transparent, accountable, reliable, quality, enhanced or best-practice, ask them what they really mean, specifically. If you can’t pin it down into the real world, you can’t measure it. And frustratingly, most goals and objectives and strategy are filled with weasel words, rendering them immeasurable.

KPI Resolution #3: Invest in learning how to develop KPIs (not searching for them off-the-shelf)

The fast-food or quick-and-dirty approach to finding KPIs – by searching for them in a list or database somewhere – is one of the big reasons why most organisation’s KPIs suck. There’s no buy-in, no link to strategy, no resultant performance improvement. Instead, learn how to design and choose your measures by starting with a better understanding of the goals you’re trying to measure and designing the right measures for those specific results.

KPI Resolution #4: Make performance measurement PART of everyone’s job, not additional to the job.

Turning up to work means we’re responsible for specific results. If we’re responsible for results, we’re responsible for achieving them. If we’re responsible for achieving results, we have to measure them to know. And because standing still means going backward, we’re also responsible for improving results too (and seeing these improvements in our measures). Monitoring the performance of our work should be a responsibility in everyone’s role description.

KPI Resolution #5: Make time to measure performance.

Don’t wait until you have spare time to do performance measurement. It won’t happen. Measurement is fundamentally important to business or organisational success and actually has a higher priority than a lot of what’s eating up your colleagues’ and your time. Stop doing something less important than measuring performance.

KPI Resolution #6: Read “Understanding Variation” by Donald Wheeler.

It’s one of my all-time favourite books for performance measurement and it will have a revolutionary impact on how you present and interpret your performance data. The idea is to learn how to see the real signals in your performance measures, and stop knee-jerk reacting to differences between this month and last month, or this month and the same month last year. This book rocks.

KPI Resolution #7: Create two successful KPI case studies.

Apply a straightforward performance measurement process to select, implement and use a KPI to get a real improvement in performance that supports the current strategic direction of your organisation or business. Write up the experience as a case study, then do it again to improve another area of performance, and share these case studies with anyone you want to influence to take measurement more seriously. Show them that measuring what matters works.

TAKE ACTION:
Focus, focus, focus! Just one KPI New Year’s Resolution can make a big difference in how you measure what matters this year. Pick one from the list, or let the list inspire your own, but set yourself a goal and get stuck into achieving it. No more waiting for the perfect opportunity or perfect time. It’s now.

IN THIS EPISODE:

Article: 7 KPI New Year’s Resolutions
Q&A: How do you convince busy managers that they should spend time developing the right measures?
Quick Tip: Start with a Pilot Project to build momentum and engagement.

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