The more contractors or departments involved in a project, the more chances for variation and, often, more confusion. There is always the opportunity for misalignment and miscommunication. The larger the organization, the more opportunity for missing cues on priorities and direction. For the process owner, the challenge is to align a team to drive progress towards the goal. For the team member, there is the question of identifying the actions that will drive progress of the entire system; the problem of managing and aligning performance at the global level and local level. To put it more simply, how does the actor at the local level know which actions to take to drive the system towards the global objective? How does the process owner know if his team is doing the right things to move progress towards the goal?
In a more practical sense, if I’m a leader of an organization, how do I know my team is doing the right things? If I’m a team member, how do I know what actions to take?
Every organization is formed for a purpose. In order to achieve its purpose and goals, organizations develop around sub-organizations (functions) and processes that accomplish them. These sub-organizations then have their own purpose and goals, for example; accounts payable’s goal is to ensure the bills get paid. Presumably, each of these sub-organizations is in alignment with overall goals and objectives of the global organization.
As the organization becomes more complex, it becomes more challenging to maintain this alignment, so the organization establishes performance management systems to maintain alignment of purpose and activity among the constituent (local) organizations. These systems are often referred to colloquially as “the measurement system” or “the metrics”. Managers seek the relevant measurements to make decisions and drive appropriate behavior in the enterprise; whether to correct a course of action, direct a new course, or even stop.
The performance management system is the formal and informal process of measuring and responding to the organizational process to achieve its goal(s). It creates and applies uniform standards, quantifying and managing process performance.
Here are a few things to think about.
Establish the standards. Create a common benchmark of performance. This can take the form of a database of work to be done, a common set of objectives, or even an agreed upon set of goals. If you don’t know what the objective is, anything will be acceptable. So be purposeful and deliberate about determining your direction. Essentially, the standard are the “why” of what is to be performed.
Know the process. The process is the “what” of your process – the details that determine your progress towards success. If you have never mapped the process or supply chain, now is the time to do it! It’s essential to know the behaviors required and the results of those behaviors – you can’t measure what you can’t quantify.
Create decision gates. Now that you have the process mapped and can clearly articulate the steps towards the goal, you can identify where decisions need to be made. Quantify the decision process – who can make what decisions and when escalation is required.
Identify the constraint. Now that the process is mapped and all steps are clear, you can see where the bottlenecks are and what is holding up the process or supply chain from moving faster – you can focus on the areas that are most critical.
During the oil spill in the Gulf of Mexico, BP built the largest civilian maritime fleet ever seen (over 14,000 vessels). In the haste of containing the spill, keeping detailed records were not a priority. Equipment was rented and used with no documentation and boats were commissioned to clean oil with no record of their model or serial number. This lack of communication and documentation became a big problem when it was time to decontaminate the cleanup vessels. We employed these lessons to drive the process and completed a task in less than six months that was originally estimated to take years. These lessons worked in the worst conditions, imagine how they could help you now.
Read how we achieved great results by applying uniformed standards in lesson 6 in our eBook, Achieving Top Performance Under the Worst Conditions: 7 Lessons Learned from a Disaster.
Also, have a look at some of our thought leadership on performance management here.
As always if, you have questions or comments please feel free to contact me by emailing me.