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June 21, 2005

Strategic Factors in Managing Performance

The working definition of "performance" takes hold for managers in the ability to define desired effects and to measure degrees of achievement towards those effects.

When it comes to achievement, the organization has two basic outlooks: prospective or forward-looking, and retrospective or backward-looking.

Putting those perspectives into practice, an organization approaches the issue of achievement primarily through motivation and accountability.

Motivation looks prospectively at achievement, with emphasis on establishing an awareness of why what we do is valuable and how we are identified with that value.

In general, a value system represents "necessities" and "priorities" as understood from a certain point of view or major objective. The main challenge is to establish agreement to the objective by all key players, even when not all players have the same stake in the benefits (and risks) of the agreement.

Accountability looks retrospectively at achievement, with the goal of identifying how achievement was developed from operations.

As with other types of development, design and testing of the achievement are fundamental to assuring the quality of the final executed result.

With those factors in play, organizations are often put in a position where the chance of maximizing actual performance originates in the organization's ability to make and "sell" strategic policies to its constituent members, and to likewise make and sell strategic processes to them.

Policies represent the agreement to the objective. Specifically, policies represent the company member's commitment to be self-governing in terms of the objective. Policies include the protocol and business rules that characterize the "sense and response" posture of the organization to its circumstances. As seen in organizations -- especially teams -- that rise to the occasion during crises or competition, the ability to rally around and rely on a sense of identity and purpose originates in a cohesiveness that reflects a common sense of what matters and how to execute on it. Policy is the container of that common sense.

Processes represent the methods behind the achievement. Specifically, processes represent the integration of skills and knowledge to organize control of the quality of achievement and of each individual's contribution to it. Processes explain how people get to make things work.

The irony of performance management is that so often it is dominated by measurements of effects instead of measurements of causes. Effects must be measured, but the effort to get future effects to match or exceed them requires acuity in the observation of people's experience of identification and inclusion .

Because operational performance is so largely dependent on people's identification and inclusion, performance improvement and optimization should logically be focused on improvement in the supporting policies and processes.

Related to that, experts agree that two critical approaches to fostering greater motivation and accountability are, respectively, collaboration and performance modeling.

Collaboration proactively incorporates multiple points of view into the goal of creating agreeable policy, by making the creation co-operative. Performance modeling clarifies the logic of cause and effect while communicating how requirements relate to individual contributions. Together, they increase the sense of empowerment within the organization.

The most important point to make about using these approaches is that collaboration applies to both motivation and accountability, and likewise modeling applies to both. Collaboration negotiates rules and roles; and modeling relates them both. Both collaboration and modeling allow the organization's members to perticipate in the actual envisioning of the mission and the operations that will execute it.

Meanwhile, a key observation to make is that neither collaboration nor modeling is dependent on measurement, but both may generate measurements. As real-time management touchpoints, measurements allow practical monitoring, which affects the decisions that constitute management.

Posted by Malcolm Ryder at June 21, 2005 10:13 PM

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