Bill Gaw's, Best-in-Class,
Basic No. 7: Performance Management
Financial numbers may tell us we’re winning the war,
but it takes performance management to show us how to focus our
energy and efforts to win each of the battles along the way.
a good friend and prior coworker, once said, "You can’t control what you
don’t measure". Imagine trying to fly an airplane across the country
and the cockpit had no dashboard, no gauges and no idiot lights. You
may get it up off the ground but without performance measurement the
chances of getting to where you want to go are slim to none.
Business success may not be a life-death situation but like piloting
an airplane it takes performance measurement and management to get you to where you
want to go.
measurement training can be motivational or de-motivational. The
individual goal setting of the 80’s is a good example of
de-motivational measurement – it tested one individual or group
against the other, and while satisfying some individual egos, it
contributed little to company growth and earnings.
the "Cascading Performance Scorecard" is a performance measurement and
management system that
helps companies create a winning culture and achievements beyond
expectations. The scorecard uses
both internal and external benchmarking and employs a relevant
cascading method of performance goal setting. Achievements are
documented and celebrated on a "real time" basis and not at the
traditional annual review.
performance scorecard process to be motivational it must provide
timely and accurate data. Simplicity is a key to the validity of
measurements and the tractability of problems to their root cause.
Data collection design must employ simple and easy to maintain
databases to assure data integrity. When people are trained in this
process and are permitted to participate in relevant goal setting,
performance measurement can motivate teams to higher achievements –
including the exceeding of growth and profit expectations.
key elements of the performance
scorecard training are:
Establish a "no status-quo" mind-set – if you’re not winning, you’re
Define company "key success factors" – examples: cost, speed and
Identify stretch goals that are relevant to the company’s "key
Implement training/coaching programs – education is the pathway to
Celebrate goal achievements and raise the bar - don’t wait
until next year.
mature performance management process, "benchmarking" has become the
standard for establishing performance objectives.
Benchmarking is still one of the most ill-defined management
concepts and is one of those words that mean different things to
different people. Our preferred definition describes benchmarking as: "the continuous process of measuring our
products, services and business practices against the toughest
competition and those companies recognized as industry leaders".
objective of benchmarking is to build on the ideas of others to
improve future performance. The expectation being that by comparing
your processes to best practice – major improvements can be
realized. You should not consider carrying out external benchmarking
until you have thoroughly analyzed your internal operations and an
effective system of internal measurement and performance has been established.
kind of results can you expect when a management team introduces the
process of the Cascading Balanced Scorecard? First, people will
become motivated and focused on the continuous improvement of their
company’s strategic objectives. Second, personal and team achievements will become recognized and rewarded – creating an
exciting, winning, work environment. Teamwork will improve and
key employee retention will rise. Finally, and most important is the
company-wide euphoria as "bottom line" results improve and financial
pressures no longer create a stressful and defensive work
If you found this article of value, do your colleagues a favor... forward it to them.
If you're not receiving my Back-to-Basics, MRP-LEAN Manufacturing
e-Bulletins and would like to...
simply click here.
Organizations that are lean, agile and quick to respond clearly
have the edge. To Increase your edge...
Knowledge and implementation
know-how you'll not find in the books at Amazon.com,
neither in YouTube videos,