| Performance management is often seen as some | | | | they meet the 5 to 9 measure criteria? |
| back office function run by highly technical people. Yet | | | | 4. Determine the question you are trying to answer |
| in reality, effective performance measurement plays a | | | | An excellent technique for establishing what measure |
| critical role in achieving business success. So what are | | | | you need or whether you have the right measure is to |
| the 6 essentials to transform performance | | | | ask yourself what question you are trying to answer. If |
| management so that it becomes a key contributor to | | | | you use this as a reference point, it will be easier to |
| business success? | | | | see if you have the best measure. Another technique |
| 1. Link performance management to business strategy | | | | is to ask what action you cannot take without the |
| At the end of the day, you and your leadership team | | | | measure. |
| will be judged in terms of how successful you have | | | | 5. Have a balanced set of measures |
| been in achieving your business strategy. You need to | | | | Financial measures are the most common in many |
| measure the right things to establish whether you are | | | | organisations. While they are important, they are |
| on or off track in terms of achieving your strategy. | | | | generally what are regarded as lag measures. By that |
| You will only do this if your performance management | | | | we mean measures that tell you after the event what |
| system in clearly linked to your business strategy. | | | | you achieved. It is important to have a range of non |
| 2. Be clear on your critical success factors | | | | financial measures in addition to the financial measures |
| In every organisation there will be things that the | | | | which focus on areas like customer satisfaction, |
| business has to get right if it is to deliver the business | | | | productivity and innovation to name just a few. |
| strategy. These critical success factors are the key | | | | 6. Involve people |
| levers that need to be operating optimally if the desired | | | | As a leader, don't fall into the trap of developing |
| results are to be achieved. As a leadership team, you | | | | performance measures in isolation. Often those |
| need to be able to clearly define what those critical | | | | closest to the delivery of the service or making the |
| success factors are so that you can determine | | | | product have the greatest insights into what is most |
| effective measures. | | | | critical to success. Make sure you use that expertise |
| 3. Avoid overload | | | | to get results for the organisation. |
| It is easy to believe that the more measures someone | | | | At the end of the day, performance management can |
| has the better the system is. The reality is somewhat | | | | be a real contributor to organisation success. So what |
| different. One person can only really focus on | | | | steps do you need to take in order to gain real |
| between 5 and 9 measures at any one time. How | | | | benefits from your performance management |
| many measures are you and your leadership and | | | | system? |
| management teams focusing on right now? Would | | | | |