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April 29, 2005

Performance, Success, and Strategy

Much of what will appear in this site's content pertains to an accepted or conventional use of the term "performance".

But in order to reinforce consistency in examining what "management" manages, it helps to distinguish between "performance" and "success". Here's a great definition of success ripped from Dictionary.com: The achievement of something desired, planned, or attempted. This definition makes it pretty easy to focus on the idea that a business has an ultimate measure (success) while it acknowledges variance in the effort to get there (performance). It also makes it easier to understand strategy as something that logically relates performance and success.

An immediate extension of this is the notion that "success management" and "performance management" are separated but related.

Success, represented by desired achievements, stages a level of further consideration that is mainly about determining whether goals should be reprioritized, retained, replaced, revised, etc. This has an obvious bearing on the idea that some success can pave the way for more success -- the ambition both of the business and of its stakeholders -- whether "more" means longevity or volume. Most importantly, it stresses attention on whether there is agreement or not between the business and its stakeholders on what goals are important at what time.

Performance, represented by the quality of the effort to succeed, becomes more obviously about improvement and about cause-and-effect. Here, emphasis on competency is the point. The notion of competency has a great precedent and use in legal and medical fields, where the meaning references the ability of a person to both spontaneously and consistently call upon relevant functions("faculties") in the face of demand for responsiveness. The most interesting observation about competency is that if the spontaneity and consistency are verified, the competency is validated even if it does not result in an advantage for the competent party. Parties that can stand trial or withstand surgery will not necessarily prevail, but incompetents will not be subjected to the stress of trial or surgery in the first place. Performance management understands that it can help the party "come through with flying colors" but acknowledge that the jury is still out and may finally come in with an undesirable outcome.

Strategy has the very interesting challenge of synchronizing available performance levels with currently prioritized goals. This responsibility makes it more obvious why risk management and change management are fundamental to strategy, along with scenario modeling and forecasting. Strategy can be prescriptively influential on both success and performance, but it cannot "cause" either of them. Instead, it gives a plausible argument for being able to establish, maintain and leverage the synchronization within certain ranges of certainty that include variation in both success management and performance management.

A final note on these distinctions is two-fold:
- first, the generic distinctions between success, performance and strategy apply whether the level of attention is enterprise-wide or task-wide; if on a given level all three things are not well-related, there may be little reason to believe that a higher level can depend on the lower one...
- And, in each of the three cases, the "management" discipline not only attends to a focal point (e.g., "competency") but also to the means for addressing that focal point.

As will be seen in lots of other content in this site, the above illustrates that the conventional concern about the gap between strategy and execution is really much easier to understand in terms of a gap between success and performance. To put a bighter light on the reality of this more precise difference, we only have to remember that in fact the "best" team does not always "win"...

Posted by Malcolm Ryder at April 29, 2005 11:59 PM

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