performance management_linda balboul

Performance Management

Linda [email protected]

012 8995 5433

KPIsBalanced Scorecard

StrategyManagement Value

EFQMObjectives

CPM/BPM/EPMStrategy maps

IT implementationFrameworks

Management processesAttention matrix

Performance insightMeasures

Outputs and outcomesDrivers

PerspectivesFeedback loopsCause and effect

Decision flowOptimisation

BSC software

mailto:[email protected]

How many organisations are aligned from top to bottom and side to side?

“I wish the top team really were a team!”

“Most managers are an obstacle to change!”

“Why do people seem to hang up their brains when they walk through the door?”

Organisations are successful when a clear management process exists

Organisations are successful when a clear management process exists

An old story ……….……… but still true

“Any organisation which boasts one Statement of Purpose, one Vision, five Values, six Goals, seven Strategic Priorities and eight Key Performance Indicators without any clear correlation between them is producing a recipe for total confusion and exasperation.”

Learmont Report, October 1995 on the Prison Service

Misalignment …. can be perceived by everyone

• Personal agendas• Politicking• No agreed routemap

• No consistent measures • No stretch targets• Shop floor disengaged

TQMTQM

ContinuousImprovementContinuous

ImprovementCustomer

FocusCustomer

Focus

ProductivityProductivity

EmpowermentEmpowerment

Too manyindependent initiatives

Just in timeJust in time reskillingreskilling

sales force effectivenesssales force

effectiveness

EDIEDI

No Clear Leadership

Disillusioned Management

Performance managementKey components

Purpose Frameworks Process Measures People Information


PM

FrameworksBalanced scorecardEFQMValue-based management/EVAActivity based costingPerformance Prism

ProcessesStrategy formulationBudgeting and forecastingGoal settingPerformance feedbackRisk management

MeasuresFinancial and non-financialShort-term and long-termQuantitative and qualitativeLagging and leadingAligned

InformationInternal and externalAvailableTimely, accurate and relevantCost effectiveWell presented and understood

PeopleCultureLeadership/delegationLink to compensationCapabilitiesCommunication and reporting

PurposeStakeholdersAttentionROIValue from complianceDecision support

Performance Management Purpose

0

10

20

30

40

50

60

70

Quality Delivery Lead time Price

MD PM


Define the purpose or performance management Stakeholders Attention ROI Value from compliance Decision support

Challenges Leaders not making it clear what

is important and why National agendas Moving away from the old way

of doing things

Example best practices Involve members

“The evidence from peer reviews indicates that local authorities that have involved members in the development of their corporate performance management arrangements manage performance better than those that do not involve members”

Challenge status quo“Effective leaders challenge the status quo

both by insisting that the current system cannot remain and by offering clear ideas about superior alternatives”

Communicate objectives“Clear objectives need to be stated,

repeated and communicated widely” Use national agenda

“….translate national frameworks or agendas into something that is meaningful instead of seeing them as a burden ….”


Op

erat

ion

alS

trat

egic

Are we doing things right?

Are we doing the right thing?


Atten

tion

to S

trategic P

erform

ance M

easurem

ent

High

Low

Attention to Tactical Performance Measurement

HighLow


Atten

tion

to S

trategic P

erform

ance M

easurem

ent

High

Low

Attention to Tactical Performance Measurement

HighLow

The Explorers The Crusaders

The Harvesters The Fighters

Performance Management Framework

Define the performance management framework Balanced scorecard EFQM Value-based management/EVA Activity based costing Performance Prism

Challenges A framework is no substitute for

the thinking and decision making Remembering the purpose is

improvement and not the framework

Complication

Example best practices You are unique

“… each organisation and its strategic goals are unique, so a ready made framework may not suit, or support it effectively”

Simplicity“Frameworks work best when they are

simple, flexible and link with other corporate systems”

Flexibility“…. They have encouraged local ownership,

emphasising flexibility rather than perfect alignment”

Discussions“They recognised that the discussions people

had about services….were as important as the framework itself”

Performance ManagementFramework


Objective

How will we do it?

How do we knowwe’re winning?

Why important to us?

Authority aimsAuthority aims

Reduce crimeBetter place to liveAttract investment

Community representativesMap neighbourhoods

Employment ratesCrime rates

Strengthenneighbourhoods

What risks couldhinder us? Delay in funding

Enhance revenue opportunities

Update delivery structures

Improve productivity

Customer

Financial

Internal

Learningand growth

Reliable andaccessible services

Migrate customers to on-line services

Joint servicedelivery

Increase funding

Grow tax base

Attract and retain key people

Improve management processes

Strategic themes

Perspectives

Develop third party relationshipsService leadership

Automate processesSecure funding partners

Grow income

Strengthenneighbourhoods


Balanced Scorecard (BSC)


Our Vision:

Critical Success Factors:

Our Objectives:

Our Perspectives:*

To ensure the provision of well-focused, high quality business support

• Effective branding and marketing• Programmes that are well-focused, coherent, flexible• High quality, timely and efficient evaluation and

customer feedback mechanism• Internal financial arrangements (system &

structures) that work simply and effectively and allow strategic control

• Real, measurable and growing impact on productivity, innovation and regional development, particularly at the small firm level

• High and improving customer/intermediary satisfaction - stakeholder applause

• A product that is simple enough for any business/intermediary to access and use

Increase Impact Develop better relationships with

partners & intermediaries

Maximise value & efficiency

Encourage core behaviours

Flexible, Effective solutions

Target Customer groups

Improve management information

Empower delivery partners

Increase admin efficiency

Improve customer experience High performing

BS team

PeoplePerformance ProcessesRelationships

DTI Business Support

Performance Management Process

Integrate the management processes Strategy formulation Budgeting and forecasting Goal setting Performance feedback Risk management

Challenges There are too many priorities There is no time to learn Being serious about establishing

new management processes Budgeting processes can be

monsters

Example best practices Take action

“Take action on what matters most … ensure everyone knows what a great day’s work looks like”

Prioritise“Focus on what matters, prioritise and

do something”

Align reporting“We have decided … what is reported to

us”

Across departments“….the members were very clear that

they wanted….managers to deal with issues that crossed departmental boundaries…”

Goals


Results

Insights ActionsCascade

Execu

teAnalyse

Interpret

Describe where we want to goSet targets and benchmarksPrioritise what to improvePrioritise skills/processes to improve

Plan resources and actionsPrioritise actionsIdentify underperformance

Process performanceMeasures against goalsDetailed reporting

Trend analysisSegment hot spotsRoot cause analysisImprovement potential


ActionAction

Strategy

PerformanceScorecard

Strategic Learning Loop

Operational Learning Loop MeasurePlan

Questionassumptions

Updatescorecard

TestFocusPredict

MeasureAnalysePresent

Test hypothesisSimulateCause and effect

CollaborateAllocate

Budget

inputs outputs

Performance Management Measures

Measure what matters Financial and non-financial Short-term and long-term Quantitative and qualitative Lagging and leading Aligned

Challenges Data quality Measuring can take on a life of

its own Measuring just what is

collectable

Example best practices Don’t compromise

“… start from what we wanted to achieve and then work out how we were going to measure it”

Outcomes“Focus on outcomes as well as inputs

and outputs” Use regularly

“Use information regularly: this will improve its accuracy”

Fit for use“….indicators will vary depending on

the purpose of reporting …accountability and BVPIs…day-to-day service management…and the audience”


Output

Outcome

Measure

Process

Exams passed

Operations performed

Arrests made

Objective

Result

National competitiveness

Improved nations’ health

Safer streets

Don

’t lo

se s

ight

of w

hat

you’

re t

ryin

g to

ach

ieve

Indicator type


Outcome

Output

Process

Input

What is the impact of this service?

Is the project achieving its objectives?

What level of service is being provided?

How many units of service are being delivered?

Is what needs to be done being done?

Are we on track to meet targets?

What resource are used to deliver the service?

Question


Outcomes Outputs Inputs

Strategic Planning Budgeting

Being an Efficient Organisation

Being an Effective Organisation

Highways cannot be an effective organisation unless it is managing the achievement of Outputs,

… and has linked a balanced range of External and Internal Outcomes to Outputs

Having aneffective strategy

Being effective inimplementing your strategy

Strategic

Financial

Peop

le

Org

anisa

tiona

lpe

rspe

ctive

s

Strategic

hypotheses

Objectives &alignmentKPIs &

hierarchies

Processes& System

s

Report

s &

visibil

ity

Mgt. process& cascade

Coaching &appraisal

Rewards &

incentives

Strategic

Financial

Peop

le

Org

anisa

tiona

lpe

rspe

ctive

s

Strategic

hypotheses


hierarchies

Processes& System

s

Report

s &

visibil

ity


Coaching &appraisal

Rewards &

incentives

Strategic

Financial

Peop

le

Org

anisa

tiona

lpe

rspe

ctive

s

Strategic

hypotheses


hierarchies

Processes& System

s

Report

s &

visibil

ity


Coaching &appraisal

Rewards &

incentives

Strategic

Financial

Peop

le

Org

anisa

tiona

lpe

rspe

ctive

s

Strategic

hypotheses


hierarchies

Processes& System

s

Report

s &

visibil

ity


Coaching &appraisal

Rewards &

incentives

Org

anisa

tiona

lpe

rspe

ctive

s

Strategic

hypotheses


hierarchies

Processes& System

s

Report

s &

visibil

ity


Coaching &appraisal

Rewards &

incentives

Highways Agency

Performance Management People

Enable people to perform at their best Culture Leadership/delegation Link to compensation Capabilities Communication and reporting

Challenges Avoid creating a ‘blame’ culture Turning priorities into action Improving services means change Addressing under performance

Example best practices Delegate

“Staff should be given some of the responsibility for developing indicators and setting targets”

Learning opportunities“Effective performance management also

demands a mature approach from members …[which] must not be allowed to block the opportunities for learning”

Incentives“Give middle managers support and

incentives”

Performance culture“Help people to perform….create a

climate in which they can empower themselves”


Organisational culture 79% Management leadership 71% Compensation link 67% Education and understanding 67% Communication and reporting 63% Review and update of CPM system 63% Data processes and IT 50% CPM framework 50%


Capability“I am able to do it”

Capability“I am able to do it”

Motivate“I want to do it”

Motivate“I want to do it”

Communicate“I know what to do”

Communicate“I know what to do”

Authority“I am allowed to do it”

Authority“I am allowed to do it”

Source: “Kaizen Strategies for Customer Care”; Wellington

Performance Management Information

Use information to give context to the performance measures Internal and external Available Timely, accurate and relevant Cost effective Well presented and understood

Challenges Measures without context are

meaningless Gaining insight takes time Providing what’s wanted rather

than everything all the time

Example best practices Reflection

“Sometimes just taking an hour out with colleagues to think ‘what is really going on here?’ can give you a chance to step back and avoid wasting energy trying to solve the wrong problems”

Exception reporting“Avoid information overload by focusing on

priorities, or by exception reporting”

Successes“Present and highlight successes as well as

problems”

Insight “If performance is not on target, reports

should explain why and … what will be done to rectify matters”


Information Insight Action

Load Aim Fire


Customer Satisfaction

LateDeparture


Cabin Crew Service

(+)

Customer Satisfaction

(+)

Willingness to recommend

(+)

Turnover

Departureon Time

(-)

Meal Rating(+)

Check-in Service

(+)

Performance managementKey components

PM

FrameworksBalanced scorecardEFQMValue-based management/EVAActivity based costingPerformance Prism

ProcessesStrategy formulationBudgeting and forecastingGoal settingPerformance feedbackRisk management

MeasuresFinancial and non-financialShort-term and long-termQuantitative and qualitativeLagging and leadingAligned

InformationInternal and externalAvailableTimely, accurate and relevantCost effectiveWell presented and understood

PeopleCultureLeadership/delegationLink to compensationCapabilitiesCommunication and reporting

PurposeStakeholdersAttentionROIValue from complianceDecision support


KPIsBalanced Scorecard

StrategyManagement Value

EFQMObjectives

CPM/BPM/EPMStrategy maps

IT implementationFrameworks

Management processesAttention matrix

Performance insightMeasures

Outputs and outcomesDrivers

PerspectivesFeedback loopsCause and effect

Decision flowOptimisation

BSC software

Q & A

performance management_linda balboul

Documents

clear ideas

clear correlation

performance managementlinda

key performance indicators

old way

statement of purpose

national frameworks

routemapno consistent