Performance Management a holistic management discipline which needs to connect many relevant dots to involve development, enablement, and enhancement.
Enterprise Performance Management is a multidisciplinary management discipline. It is critical because new competitive challenges and active market changes underscore the strategic imperative of managing performance more than ever. Enterprise performance management is about how organizations manage performance at both strategic and operational level to achieve the well-set business goals and objectives. Here are five aspects to unlock digital performance.
Enterprise Performance Management is a multidisciplinary management discipline. It is critical because new competitive challenges and active market changes underscore the strategic imperative of managing performance more than ever. Enterprise performance management is about how organizations manage performance at both strategic and operational level to achieve the well-set business goals and objectives. Here are five aspects to unlock digital performance.
Performance management at a strategic level: The purpose of managing performance is about setting performance metrics to evaluate the status of strategy management, making objective assessments, and understanding performance measurement result. It is important to track the right metrics and know what to do with them to see the performance improvement. At the strategic level, the performance measurement setting should focus on achieving the ultimate goals of the organization as a whole for the long term, not just individual, one team or one department performance only. Because usually there are two sides of measurement, the good measures motivate teams to achieve more and the bad measures distract the management from achieving the ultimate business goals. In fact, the effective way to track the achievement of strategic goals is to cascade those down throughout the organization, to a more specific level of tactical tasks of divisions and the individual’s work goals. Performance management is not an isolated management discipline. At the strategic level, performance management should connect multidisciplinary management dots to tell the full story with the business context, and ensure the business as a whole is superior to the sum of pieces.
Performance Management at the operational level: It is imperative that you link lower level metrics with higher level strategic objectives. That’s what most of the performance management methodologies are all about. When the strategic goals further cascade down to operational objectives, it becomes more traceable and measurable. Performance management should also make objective assessments of those tactical goals, either at the functional or individual level. Compared to strategic value often focuses on long-term, the operational value is the ability to run short-term operations successfully. Daily operational tasks realize strategic value. The digital organization needs to expand the capacity by improving operation efficiency and effectiveness with the KPIs to resolve problems. It needs to measure organizational efficiencies, such as productivity which includes operating expenses, and effectiveness, such as on-time delivery, inventory, write-off, quality, levels, capacity planning. And if the operational tasks are done well, finally the strategic value can be realized seamlessly.
Talent Performance Management: Mapping the employee’s performance to the overall business performance is also an important aspect of running a high-performance organization. The management should first consider the desired outcome of the performance management process and scenario. The desired outcome is to assess the employee's contribution and ability to fulfill tasks and objectives in line with the organizational goals (both at the strategic and operational level) and vision (both qualitatively and quantitatively). In many traditional organizations, people performance management turns out to be an annual routine to focus mainly on past performance. The hindsight driven performance management could become the barrier to unleash the talent potential and achieve the long-term strategic goals of the business. The organization should identify their high performers, changes agents, and innovators via objective and updated performance management methodologies and practices.
Decision Performance Management: Performance Management is more as decision management. All company’s performance is directly related to the decisions people make every day, from top-level executives to the front-line workers, across functional areas and geographical regions. Thus, an organization needs to define the set of measures that help it make informed decisions across the organizational scope consistently. High effective performance management should facilitate the flow of the right information to the right people at the right time to make the right decisions, to help and coordinate the business strategy, tactics, and risks. The measurement for internal process quality for decision making is a good starting point, the goal is to improve decision effectiveness and overall organizational maturity to ensure people do right things in the right ways and achieve high-performance results.
Performance METRICS: Performance measurements are the number in context. The performance metrics are not just number but tell stories, and the good measurement aids setting direction for the digital transformation journey. Traditional performance measurement systems for most businesses have been financing driven. However, in many businesses, financial indicators only cover part of the story. It is critical to define the right set of measures which should cover all areas that contribute to business value creating. The right sets of metrics are those used to inform the multidimensional performance result tailoring varying business stakeholders, to drive people engagement throughout the enterprise for improving business performance ultimately and accelerate business changes relentlessly.
Performance Management is not a bunch of paperwork, but a combination of management approaches leading to constantly improving business results. Performance management is not a silo management practice to monitor or measure the quantitative delivery of staff, a team or a division,; but a holistic management discipline which needs to connect many relevant dots to involve development, enablement, and enhancement.
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