To improve your Organisational Performance Management approach it helps to understand which management problems you are trying to solve.

Different levels of control require different types of organisational performance management

Making strategy happen involves management using a variety of different levers of control. So your performance management approach needs to be flexible enough to handle all of these situations. (Unfortunately many aren't). The diagram below shows some of the different levers of control and performance that organisations typically employ. Below we explore what these mean for performance management.

Risks and controls

Of course you need to ensure you have financial system compliance, the place is safe to work, people are treated with respect and codes of conduct are followed. These are important. and you need to ensure compliance. If you are failing in some of these they need attention and fixing, but they do not represent "a strategy". They can lead to the organisation failing. Implementing Sarbannes-Oxley or improving health and safety at work are examples of these. (For more see our case studies)

Beliefs and values

Likewise, organisations have chosen rules, beliefs and values by which you make judgments and decisions. There will be a purpose or mission for the organisation. People need to sign up to these and follow them. You will look for behaviour and evidence that indicate this. It represents where you want to be and the principles for getting there.

Organisational performance management approaches tend not to address this area. It is often left to individual appraisals and cultural surveys. However, the beliefs and values are expressed as behaviours and these can be observed, experienced, measures and managed. Performance management approaches that include these are far more sensitive to understanding how change and whether change is occuring in the organisation. To find out more simply talk to us. (For more see our case studies)

Operational performance

Much performance management is focused on operational detail. You will have many measures of performance at different levels of the organisation that tell you how it is performing. Measuring this on a day to day basis is operational control and management.

This is like the heart rate of your organisation. You weren't monitoring your heart rate before we started talking about it. Your body has delegated it to your sub-conscious (autonomic) systems to look after. If there is a problem it will warn you. Others will also notice pretty quickly that something is wrong.

Someone needs to be monitor these things, but do you need to? There are many operational details like this in the body and in the organisation. Operations whose day to day functions, measurement and management can and should be delegated to lower level functions to look after. You should be able to trust that they are being managed properly and that exceptions will be reported if they occur.

Of course if there are problems they will need special attention. You can always drill down into the detail if you need it. Likewise, should you need to check what is going on, you can always do some diagnosis (like a doctor checking your pulse) and explore the detail.

If this information is not available, you will need to get control of the organisation. This will enable you to find out what is happening and put the organisation on an even keel. Getting reliable and consistent information will enable you to manage the situation better. Then you can understand the problems, diagnose issues and fix them.

Standard sets of data and measures, gathered and presented consistently, will help this The standard sets of performance measures will save you time and effort rather than re-inventing the wheel. Standard performance reporting tools will help you collect and present systematically. We have standard sets of measures and tools that will help you get a grip quickly. We have standard scorecards we can help you implement that will save you time and effort so that you get control quicker.

However, there is usually an large volume of this sort of detail in organisations already. Once they are in place, if you pay attention to this level of detail all the time, you will have no capacity to concentrate on the few things that really matter. Moreover your middle managers won't be managing, but will merely be passing information through for for you to manage. In worse cases they may not being trusted much or allowed to use their judgment, so they will be underutilized and you won't get the best from them. At the same time you will be snowed under with measures, targets and information.

The dilemma of performance measurement is that more measurement does not necessarily mean better performance.

Many performance management systems and scorecards operate at this level. They fulfil the role of collect and reporting every measure they can get find. This is useful, at some level, but not all will be strategic. Overall this can lead to "Managing what you can measure", rather than "Measuring what you want to manage".

Worse still, some organisations insist that every measure need a target. So, targets are applied to everything as well. When this happens if becomes difficult to work out which are actually important. When the culture of measurement and target setting goes this wrong it can lead to dysfunctional behaviour.

Of course if you get it right you develop a culture of performance. Get it wrong and you get measurement mania. (For more see our case studies)

Strategic levers

When you have sufficient control, are collecting reliable information and understand the key problems, you can focus attention on the strategy and changes you want to make.

Management attention will have more focus. You will know which levers of change you want to pull and communicate. You are more likely to concentrate on objectives (rather than measures). You may draw attention to behaviours (how things are done), rather than what is done. You wiull also focus on end results and external objectives (financial and for the customers).

You may have a clear understanding of how the culture, behaviours and activities of the organisation affects your customers and delivers financial results. You will also be aligning the organisational resources and effort to the strategy. Your focus may be on getting the organisation to work together better.

You should be able to read the strategy from your objectives, measures and targets.

Strategy maps come into their own at this stage. They help you communicate the strategy, focus on what matters, explain the levers of change, and people can carry the strategy around in their pockets.

Public sector: In the public sector, externally (nationally) imposed measures and targets can often dominate local management.

Implications

Implications for software:

To maximize the potential of your investment, choose software that allows you to move between these various uses. If you are looking for new software, or to get more from you existing software, we provide or independent software software selection and implementation advice: We help you get the best from your technology and your provider.  Save money, with the right choice of software, well implemented, that allows most flexibility.

Implications for performance management

Performance management is about making informed decisions to influence people's behaviour. To get people behind the strategy and deliver results. To gather feedback for management so you can refine the direction and message. Ultimately, to deliver results.

Likewise, the sort of performance management approach, and the design of your balanced scorecard will vary with these.

This is what we do. We help you develop the performance management system that supports your strategy. Talk to us to find out more

Evidence that Strategic Performance Management makes improvements

Research shows that world class organisations are three times more likely to use a Mature Balanced Scorecard approach: It is more than measurement.  It is about measuring what you want to manage and influence. It is not measures in four perspectives, but one that drives and links to your strategy. (See "Making the case" in our case studies)

Clients are still using our approach over 5 years after we worked with them, which demonstrates the effectiveness and persistency of our consultancy approach.  Having worked with the originators of the Balanced Scorecard, Norton & Kaplan, for over 4 years, and being implementing Strategic Balanced Scorecards for another ten years, we have unique, and extensive, experience of how to use it effectively, to execute strategy successfully and to improve the performance of your organisation. We know what was not put in the books and how to make it work.  If you are after some guidelines, for what makes a good performance management system and the mistakes to avoid then talk to us.

What next

For more information take a look at:

The dilemma of performance management

On Balanced Scorecards:

Please don't use old style Balanced Scorecards

Use a Strategy Map and Balanced Scorecard

10 principles for a successful Balanced Scorecard

You could explore our range of Balanced Scorecard services, but it is far better to talk to us, so we can develop what you need.