Effective performance management is critical to any organization and it’s success. Before we “jump in,’ let’s be clear about what “performance management” is. Every “result” is the output of an “activity” or “activities.” These “activities” may be a sequenced set, or process. But it is still simple “input – output.” This relationship between key activities and results is often lost over time in the ongoing day-to-day challenge of operating a business, or worse yet, never developed and deployed.
Developing a 1) verified set of key results, 2) key activities that achieve those results, 3) delegating those activities and results to individuals (who have the ability, resources, authority and responsibility to achieve them), and 4) measurement systems and processes to determine the results achieved and the activity or activities executed to achieve them, are the cornerstones of effective performance management, for both individuals and groups.
But for small businesses, continuous effective performance management is often overlooked altogether, replaced by crises-management, “managing on the fly,” or reliance on outdated assumptions or the status quo. But effective performance management requires a relevant, up-to-date strategy, plan, and the ability to dynamically envision and manage from the whole to the details, and vice versa. Easier said than done, and it’s not for everyone.
One of the biggest “value killers” of any business is leadership not knowing the “why’s” of their business. And the “why’s” are often the causal relationship between “activity” and “result.”
Below is a set of 10 questions designed to get you thinking about effective performance management and what you might be able to do to improve it, and in doing so, improve the performance and results of your business?
- What’s the one result most indicative of and critical to your business’ success?
- What’s the one single activity that most influences that one result?
- Who is the single person most responsible for the successful execution of that activity?
- How does each member of your company contribute to that one most-critical result?
- Does each member of your company have a specific, key success indicator – that one result that most contributes to your key success indicator?
- Does each member of your company have a specific key performance indicator, that one activity that most influences their key success indicator?
- Does each member know what his or her key success and performance indicators?
- Are you measuring what’s more relevant and important?
- Are you generating the information you need to analyze and evaluate your business?
- Are you getting all the insight you can and should from your information?
Yes? Maybe? Truth is, often times the answer is “no.” And if you answered “maybe” or “no” to any of these questions, there is likely room for measurable improvement in your company’s collective and individual performance and results. But effectively addressing, answering, and most importantly, acting on these questions and issues are easier said than done.
The time, expertise, experience, and passion to effectively assess and act on effective performance management, and the improved performance and results may not be readily available. Effective performance management is critically important in achieving sustainable, managed, controlled success, growth, and increased company value. With so much to gain, it will be more than worthwhile for you to make it a priority to make effective performance management standard operating procedure.
To download or print: 10 Questions to Ignite Your Performance Management