The Essential Systems to Entrench Good Performance MeasurementMay 17, 2016 by Stacey Barr
Too often we assume that performance measurement depends on technical systems, like a business intelligence system or dashboard application. But for performance measurement to become entrenched in how our organisations work, it’s the non-technical systems that matter most.
Performance measurement doesn’t work just because we have technical systems, like business intelligence or analytics or big data. Too many data warehouses and BI systems are bloated with unused data. And it doesn’t depend on building a dashboard. Too many dashboards have been built and soon ignored, because they fail to give insightful information.
These technical systems can certainly make performance measurement work better, but only when the non-technical systems are working well first.
The planning system.
The planning system is what sets the purpose and goals for the organisation, and all its parts. It’s the way to set priorities for performance improvement. Without a clear direction, measurement has not focus and not boundaries. To work well, the planning system needs to make it clear what are the fewest things that are most worth measuring.
The belief system.
The beliefs about what performance measurement is really about need to be clearly defined, openly spoken about, and actively role-modelled by leaders and managers. To work well, the belief system needs to be centred on continuous process improvement and not on judgement and control.
The measure design system.
The system for choosing and creating measures is about getting the best evidence of how well the important goals are being achieved. To work well, the measure design system has to be a deliberate procedure that selects real performance measures to tightly monitor the goals. And it needs to ensure those measures are implemented correctly and consistently.
The strategy cascading system.
The cascading of strategy is about engaging everyone in finding their place in the purpose of the organisation, and measuring the impact they have from that place. To work well, the cascading system needs to help each part of the organisation identify their biggest impact on the current strategic direction, and how they need to work on their processes and not just in them.
The strategy execution and performance improvement system.
Executing the strategy and continuously improving performance is about making changes happen; the changes that truly elevate performance and reach the goals that matter. To work well, the strategy execution and performance improvement system need to start with the measures, so energy is always going to the highest priorities. And they need to end with the measures, so the organisation can learn what works and what doesn’t in achieving the goals that matter.
The accountability system.
Accountability is about having someone take ownership of a goal and its measures, because goals don’t achieve themselves and improvements don’t happen spontaneously. To work well, the accountability system needs to focus on people fulfilling the roles of monitoring the measures, validly interpreting them, and initiating action when action is needed. It shouldn’t focus on hitting targets. No-one has that much control.
When these non-technical systems are in place, there will be a much larger return on investment in the technical systems we so often associate with measuring performance.
Where’s the emphasis in your organisation? On the technical system of performance measurement, or the non-technical?
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