Targets are good. They work.
Comparing this quarters performance with last quarters, is good. It works
Benchmarking performance against a group of other organisations, is good. That works too.
Calm down! Let’s go back a bit….
Q: What’s the first question to ask of any system?
A: “What is the purpose of this system?”
You can’t know if an activity makes sense unless you know what it is supposed to do in the context of the system it is in. Until you know it’s purpose, you’ll never know if a part is doing the right thing.
So, what’s the purpose of a performance management system?
Not the usual rubbish answer either, the real answer. The POSIWID answer.
Look closely at how people act with performance information and you will see that the purpose of a performance management system is to provide one of two words….
When a performance report is in the executive boardroom, the question being asked ALWAYS requires a yes/no answer.
Questions such as…
- Have you hit your target?
- Are we better than this time last quarter?
- Are we good compared with others?
To get these questions answered you simply compare…
- an actual performance against a target GIVES you a yes or a no.
- this quarters with last quarters GIVES you a yes or a no.
- yourself against others in a ranked list GIVES you a yes or a no.
In a command and control organisation the method of management is management by objectives. People, especially senior managers, are held responsible for delivering certain numerical objectives. That’s the command bit. The control bit is measuring whether they have or not through corporate performance management. The yes/no is provided quarterly at a big table in an even bigger report stuffed full of yes/no’s.
Targets, benchmarking and other binary comparisons are characteristics of measures that are fit for purpose.
It is just not the purpose you might assume it to be.
This is why it NEVER works to try and improve poor performance measures without improving the thinking that created them.
A common error is to go in at the level of the tool, to show why targets dont work but control charts do. There is a reason why they were using targets in the first place. You cannot assume that people have what you consider “poor measures” because they aren’t good at maths or because they haven’t read the right books.
Instead go in at the level of the thinking. Ask them what questions specifically they are trying to answer. Ask what specific problems they are trying to solve. There is a reason why people do everything they do. It makes sense to them, it needn’t make sense to you.
The purpose of this whole blog is about changing management thinking. If you don’t change management thinking, you’re not doing much at all. In the case of performance measures if you don’t address the thinking…
- show someone a control chart, they will ask where the target is.
- come up with a measure of customer purpose, they will ask how they can benchmark it.
- if you put measures in the hands of people doing the work, someone will want it reported to a boardroom far away.
These are 5 characteristics of measures that are fit for purpose if the purpose is to provide a yes/no answer…
The Wrong Measure
1. Do they relate to targets, standards and other arbitrary benchmarks?
2. Do they measure functional performance and activity not attainment of purpose
Shown The Wrong Way
3. Are they expressed as static data points, averages , percentages, RAG etc??
Used in the wrong place by the wrong people
4. Are they primarily used for reporting to the boardroom?
5. Are they used as a carrot or a stick, not a tool for learning and improvement??
These are characteristics to aspire to in a command and control organisation. That is why to go in at the level of the performance measure trying to improve that, is a waste of time. The following are characteritics of good performance measures that are fit for purpose if the purpose is to provoke a question, not provide an answer..
The Right Measure
1. Does it measure purpose and what matters to the customer as defined by the customer?
Shown The Right Way
2. Does it demonstrate predictable capability (to meet purpose & what matters) and variation over time?
3. Is it used to connect actions with consequences so learning can take place
Used in the right place by the right people
4. Is it used by people doing the work it measures, in the work being measured, to understand and improve the work?
5. Does it lead people to learn and improve against purpose?
NB All this stuff is Vanguard content, all I do is copy and paste. But I do it beautifully.