Often the more meaningful and important thing you want to assess, the harder it is to measure objectively.
Performance Management is not about managing numbers, but telling an information-enriched story. Performance management is not an isolated management discipline, but a holistic approach with a well set of methodologies and practices via connecting multidisciplinary management dots to make progressive changes.
Critical Thinking is crucial because there are blind spots in performance management which are perhaps inevitable, the point is how business leaders or professionals learn to deal with them and close them seamlessly. First, you need to consider why you need to do performance management. Then, how to do it in the right way.
Apply critical thinking to select metrics: Metrics or KPI selection is not an easy task, sometimes it needs a number of measures around the same issues to gain a complete picture. Companies have resource constraints and performance measurement is overhead. Thus, critical thinking is a crucial thought process to help select metrics, and get feedback from people at the different levels of the organization, understand what those metrics are, what they are trying to achieve, and why you think they are appropriate in that specific context. Otherwise, it causes confusion and resistance in using metrics and further leads to decision ineffectiveness.
There are people extremely obsessed with metrics, who end up creating a huge set of meaningless metrics and cause management pain points. Apply critical thinking to ensure that performance measures are both qualitative and quantitative. The right metric is requested in the right context but without giving any explanation of why it is requested, or without concern for whether there is a better way to gather the metric that achieves the well-defined goals, the measurement can easily go wrong. Goals of performance measurement should be clear and attainable, linking your key performance indicators at the strategic level all the way back to your transactional metrics defined in your source systems, and making an objective assessment of business performance objectively.
Leverage critical thinking and use metrics as pointers to areas requiring further investigation: Running a business is fundamentally a problem-solving continuum. With reliable performance data, the management can guide the team to understand the purpose of doing metrics, leverage critical thinking to make inquiries, and use metrics as pointers to areas requiring further investigation, frame the right issues, and fix the root cause of the problems. Critical thinking is important because sometimes the metrics can be twisted to desired ends, to what the management wants to hear rather than what they need to know. It’s about clarifying “WHAT” (performance result) you have achieved, but also about “WHY” (the strategic vision) and “HOW” (the decision-action scenario) to achieve high-performance business results.
Silo mentality is a reality. The larger the organization, the more and more isolated business goals become when considered in the context of the enterprise’s goals. The true critical thinking systems will be hard to emerge in corporate management. Often in these environments, each department measures on their own success, with ignorance of the business as a whole. Or the preoccupation with the short-term time horizon and the skew of incentives toward it is perhaps why Performance Management is not synchronized with business strategy management and mislead the organization in the wrong direction sooner or later.
Lack of critical thinking or honest feedback to make continuous improvement: The peril of measurement management such as the wrong metrics selection or ineffective measurement practices perhaps cause dysfunctional behaviors and motivates people to hide bad news on delays and cost overruns, further causes management conflicts, resource misalignment, or business stagnation. Lack of effective feedback management will deepen the functional gaps and create measurement blind spots.
Great critical thinkers who can provide useful feedback on business action/impacts/outcomes, project realization/implementation, or organizational potential, can significantly improve business performance. Regular feedback is a must and incentives should be comparable to expectation set and engage more people as advocates in building the momentum. Different stakeholders can provide great feedback, their respective viewpoints can indicate useful areas for further performance exploration and confirmation.
Managing performance means leveraging critical thinking and multidimensional thought processes in understanding results, setting metrics, and making continuous improvement. Often the more meaningful and important thing you want to assess, the harder it is to measure objectively. High-performance businesses can select and measure KPIs and also become very adept at measuring business results and make performance improvements continuously.
There are people extremely obsessed with metrics, who end up creating a huge set of meaningless metrics and cause management pain points. Apply critical thinking to ensure that performance measures are both qualitative and quantitative. The right metric is requested in the right context but without giving any explanation of why it is requested, or without concern for whether there is a better way to gather the metric that achieves the well-defined goals, the measurement can easily go wrong. Goals of performance measurement should be clear and attainable, linking your key performance indicators at the strategic level all the way back to your transactional metrics defined in your source systems, and making an objective assessment of business performance objectively.
Leverage critical thinking and use metrics as pointers to areas requiring further investigation: Running a business is fundamentally a problem-solving continuum. With reliable performance data, the management can guide the team to understand the purpose of doing metrics, leverage critical thinking to make inquiries, and use metrics as pointers to areas requiring further investigation, frame the right issues, and fix the root cause of the problems. Critical thinking is important because sometimes the metrics can be twisted to desired ends, to what the management wants to hear rather than what they need to know. It’s about clarifying “WHAT” (performance result) you have achieved, but also about “WHY” (the strategic vision) and “HOW” (the decision-action scenario) to achieve high-performance business results.
Silo mentality is a reality. The larger the organization, the more and more isolated business goals become when considered in the context of the enterprise’s goals. The true critical thinking systems will be hard to emerge in corporate management. Often in these environments, each department measures on their own success, with ignorance of the business as a whole. Or the preoccupation with the short-term time horizon and the skew of incentives toward it is perhaps why Performance Management is not synchronized with business strategy management and mislead the organization in the wrong direction sooner or later.
Lack of critical thinking or honest feedback to make continuous improvement: The peril of measurement management such as the wrong metrics selection or ineffective measurement practices perhaps cause dysfunctional behaviors and motivates people to hide bad news on delays and cost overruns, further causes management conflicts, resource misalignment, or business stagnation. Lack of effective feedback management will deepen the functional gaps and create measurement blind spots.
Great critical thinkers who can provide useful feedback on business action/impacts/outcomes, project realization/implementation, or organizational potential, can significantly improve business performance. Regular feedback is a must and incentives should be comparable to expectation set and engage more people as advocates in building the momentum. Different stakeholders can provide great feedback, their respective viewpoints can indicate useful areas for further performance exploration and confirmation.
1 comments:
Nice information on performance management. Thanks for sharing
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