Performance Management
John Wilkes
Capgemini
@
KPIs
Balanced Scorecard
Strategy
Management Value
EFQM
Objectives
CPM/BPM/EPM
Strategy maps
IT implementation
Frameworks
Management processes
Attention matrix
Performance insight
Measures
Outputs and outcomes
Drivers
Perspectives
Feedback loops
Cause and effect
Decision flow
Optimisation
BSC software
P rf ma ce M na e nt
How many organisations are aligned from top to bottom and side to side?
“I wish the top team really were a team!”
“Most managers are an obstacle to change!”
“Why do people seem to hang up their brains when they walk through the door?”
Organisations are successful when a clear management process exists
An old story ……….
……… but still true
“Any organisation which boasts one Statement of Purpose, one Vision, five Values, six Goals, seven Strategic Priorities and eight Key Performance Indicators without any clear correlation between them is producing a recipe for total confusion and exasperation.”
Learmont Report, October 1995 on the Prison Service
Misalignment ….
can be perceived by everyone
Personal agendas
Politicking
No agreed routemap
No consistent measures
No stretch targets
Shop floor disengaged
TQM
Continuous
Improvement
Customer
Focus
Productivity
Empowerment
Too many
independent initiatives
Just in time
reskilling
sales force
effectiveness
EDI
No Clear Leadership
Disillusioned Management
Performance management
Key components
Purpose
Frameworks
Process
Measures
People
Information
Performance Management
PM
Frameworks
Balanced scorecard
EFQM
Value-based management/EVA
Activity based costing
Performance Prism
Processes
Strategy formulation
Budgeting and forecasting
Goal setting
Performance feedback
Risk management
Measures
Financial and non-financial
Short-term and long-term
Quantitative and qualitative
Lagging and leading
Aligned
Information
Internal and external
Available
Timely, accurate and relevant
Cost effective
Well presented and understood
People
Culture
Leadership/delegation
Link to compensation
Capabilities
Communication and reporting
Purpose
Stakeholders
Attention
ROI
Value from compliance
Decision support
Performance Management
Purpose
Source: Cranfield University
Performance Management
Purpose
Define the purpose or performance management
Stakeholders
Attention
ROI
Value from compliance
Decision support
Challenges
Leaders not making it clear what is important and why
National agendas
Moving away from the old way of doing things
Example best practices
Involve members
“The evidence from peer reviews indicates that local authorities that have involved members in the development of their corporate performance management arrangements manage performance better than those that do not involve members”
Challenge status quo
“Effective leaders challenge the status quo both by insisting that the current system cannot remain and by offering clear ideas about superior alternatives”
Communicate objectives
“Clear objectives need to be stated, repeated and communicated widely”
Use national agenda
“….translate national frameworks or agendas into something that is meaningful instead of seeing them as a burden ….”
Performance Management
Purpose
Operational
Strategic
Are we doing things right?
Are we doing the right thing?
Performance Management
Purpose
Attention to Strategic Performance Measurement
High
Low
Attention to Tactical Performance Measurement
High
Low
Performance Management
Purpose
Attention to Strategic Performance Measurement
High
Low
Attention to Tactical Performance Measurement
High
Low
The Explorers
The Crusaders
The Harvesters
The Fighters
Performance Management
Framework
Define the performance management framework
Balanced scorecard
EFQM
Value-based management/EVA
Activity based costing
Performance Prism
Challenges
A framework is no substitute for the thinking and decision making
Remembering the purpose is improvement and not the framework
Complication
Example best practices
You are unique
“… each organisation and its strategic goals are unique, so a ready made framework may not suit, or support it effectively”
Simplicity
“Frameworks work best when they are simple, flexible and link with other corporate systems”
Flexibility
“…. They have encouraged local ownership, emphasising flexibility rather than perfect alignment”
Discussions
“They recognised that the discussions people had about services….were as important as the framework itself”
Performance Management
Framework
Performance Management
Framework
Objective
How will we do it?
How do we know
we’re winning?
Why important to us?
Authority aims
Reduce crime
Better place to live
Attract investment
Community representatives
Map neighbourhoods
Employment rates
Crime rates
Strengthen
neighbourhoods
What risks could
hinder us?
Delay in funding
Performance Management
Framework
Enhance revenue opportunities
Update delivery structures
Improve productivity
Customer
Financial
Internal
Learning
and growth
Reliable and
accessible services
Migrate customers to on-line services
Joint service
delivery
Increase funding
Grow tax base
Attract and retain key people
Improve management processes
Strategic themes
Perspectives
Develop third party relationships
Service leadership
Automate processes
Secure funding partners
Grow income
Strengthen
neighbourhoods
Performance Management
Framework
Performance Management
Framework
Our Vision:
Critical Success Factors:
Our Objectives:
Our Perspectives:*
To ensure the provision of well-focused, high quality business support
Effective branding and marketing
Programmes that are well-focused, coherent, flexible
High quality, timely and efficient evaluation and customer feedback mechanism
Internal financial arrangements (system & structures) that work simply and effectively and allow strategic control
Real, measurable and growing impact on productivity, innovation and regional development, particularly at the small firm level
High and improving customer/intermediary satisfaction - stakeholder applause
A product that is simple enough for any business/intermediary to access and use
Increase Impact
Develop better relationships with partners & intermediaries
Maximise value & efficiency
Encourage core behaviours
Flexible, Effective solutions
Target Customer groups
Improve management information
Empower delivery partners
Increase admin efficiency
Improve customer experience
High performing BS team
People
Performance
Processes
Relationships
DTI Business Support
Performance Management
Framework
Perspective
Objectives
Intermediate Indicators
Outcome Indicators
Targets
Accountable
People
1. Encourage core behaviours
2. Empower delivery partners at the point of service by:
- providing support and training so they can take decisions and influence support
3. Create a high performing Business Support team
1. % BS staff with PAPs up to date
2. % target met for secondments, work shadowing, and other forms of personnel interchange
3. % positive responses to questions in the staff survey related to the BS team’s implementation of the core behaviours
4. % of targeted delivery partners scheduled for Business Support accreditation (% of those partners targeted for accreditation)
5. % of targeted delivery partners with Business Support accreditation
6. % delivery partners that agree they are given adequate support and training to make informed decisions
7. BS and internal partner staff answering positively to BS staff survey asking whether BS exhibits high performing team behaviours
Covered by outcome indicators in all perspectives
DTI Business Support
Performance Management
Process
Integrate the management processes
Strategy formulation
Budgeting and forecasting
Goal setting
Performance feedback
Risk management
Challenges
There are too many priorities
There is no time to learn
Being serious about establishing new management processes
Budgeting processes can be monsters
Example best practices
Take action
“Take action on what matters most … ensure everyone knows what a great day’s work looks like”
Prioritise
“Focus on what matters, prioritise and do something”
Align reporting
“We have decided … what is reported to us”
Across departments
“….the members were very clear that they wanted….managers to deal with issues that crossed departmental boundaries…”
Performance Management
Process
Goals
Results
Insights
Actions
Cascade
Execute
Analyse
Interpret
Describe where we want to go
Set targets and benchmarks
Prioritise what to improve
Prioritise skills/processes to improve
Plan resources and actions
Prioritise actions
Identify underperformance
Process performance
Measures against goals
Detailed reporting
Trend analysis
Segment hot spots
Root cause analysis
Improvement potential
Performance Management
Process
Action
Strategy
Performance
Scorecard
Strategic Learning Loop
Operational Learning Loop
Measure
Plan
Question
assumptions
Update
scorecard
Test
Focus
Predict
Measure
Analyse
Present
Test hypothesis
Simulate
Cause and effect
Collaborate
Allocate
Budget
inputs
outputs
Performance Management
Measures
Measure what matters
Financial and non-financial
Short-term and long-term
Quantitative and qualitative
Lagging and leading
Aligned
Challenges
Data quality
Measuring can take on a life of its own
Measuring just what is collectable
Example best practices
Don’t compromise
“… start from what we wanted to achieve and then work out how we were going to measure it”
Outcomes
“Focus on outcomes as well as inputs and outputs”
Use regularly
“Use information regularly: this will improve its accuracy”
Fit for use
“….indicators will vary depending on the purpose of reporting …accountability and BVPIs…day-to-day service management…and the audience”
Performance Management
Measures
Output
Outcome
Measure
Process
Exams passed
Operations performed
Arrests made
Objective
Result
National competitiveness
Improved nations’ health
Safer streets
Don’t lose sight of what you’re trying to achieve
Performance Management
Measures
Indicator type
Outcome
Output
Process
Input
What is the impact of this service?
Is the project achieving its objectives?
What level of service is being provided?
How many units of service are being delivered?
Is what needs to be done being done?
Are we on track to meet targets?
What resource are used to deliver the service?
Question
Performance Management
Measures
Outcomes
Outputs
Inputs
Strategic Planning
Budgeting
Being an Efficient Organisation
Being an Effective Organisation
Highways cannot be an effective organisation unless it is managing the achievement of Outputs,
… and has linked a balanced range of External and Internal Outcomes to Outputs
Having an
effective strategy
Being effective in
implementing your strategy
Highways Agency
Performance Management
People
Enable people to perform at their best
Culture
Leadership/delegation
Link to compensation
Capabilities
Communication and reporting
Challenges
Avoid creating a ‘blame’ culture
Turning priorities into action
Improving services means change
Addressing under performance
Example best practices
Delegate
“Staff should be given some of the responsibility for developing indicators and setting targets”
Learning opportunities
“Effective performance management also demands a mature approach from members …[which] must not be allowed to block the opportunities for learning”
Incentives
“Give middle managers support and incentives”
Performance culture
“Help people to perform….create a climate in which they can empower themselves”
Performance Management
People
Organisational culture 79%
Management leadership 71%
Compensation link 67%
Education and understanding 67%
Communication and reporting 63%
Review and update of CPM system 63%
Data processes and IT 50%
CPM framework 50%
Performance Management
People
Capability
“I am able to do it”
Motivate
“I want to do it”
Communicate
“I know what to do”
Authority
“I am allowed to do it”
Source: “Kaizen Strategies for Customer Care”; Wellington
Performance Management
Information
Use information to give context to the performance measures
Internal and external
Available
Timely, accurate and relevant
Cost effective
Well presented and understood
Challenges
Measures without context are meaningless
Gaining insight takes time
Providing what’s wanted rather than everything all the time
Example best practices
Reflection
“Sometimes just taking an hour out with colleagues to think ‘what is really going on here?’ can give you a chance to step back and avoid wasting energy trying to solve the wrong problems”
Exception reporting
“Avoid information overload by focusing on priorities, or by exception reporting”
Successes
“Present and highlight successes as well as problems”
Insight
“If performance is not on target, reports should explain why and … what will be done to rectify matters”
Performance Management
Information
Information
Insight
Action
Load
Aim
Fire
Performance Management
Information
Customer Satisfaction
Late
Departure
Performance Management
Information
Cabin Crew Service
(+)
Customer Satisfaction
(+)
Willingness to recommend
(+)
Turnover
Departure
on Time
(-)
Meal Rating
(+)
Check-in Service
(+)
Performance management
Key components
PM
Frameworks
Balanced scorecard
EFQM
Value-based management/EVA
Activity based costing
Performance Prism
Processes
Strategy formulation
Budgeting and forecasting
Goal setting
Performance feedback
Risk management
Measures
Financial and non-financial
Short-term and long-term
Quantitative and qualitative
Lagging and leading
Aligned
Information
Internal and external
Available
Timely, accurate and relevant
Cost effective
Well presented and understood
People
Culture
Leadership/delegation
Link to compensation
Capabilities
Communication and reporting
Purpose
Stakeholders
Attention
ROI
Value from compliance
Decision support
Performance Management
Q & A
KPIs
Balanced Scorecard
Strategy
Management Value
EFQM
Objectives
CPM/BPM/EPM
Strategy maps
IT implementation
Frameworks
Management processes
Attention matrix
Performance insight
Measures
Outputs and outcomes
Drivers
Perspectives
Feedback loops
Cause and effect
Decision flow
Optimisation
BSC software
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
This shows the 4 perspectives in a traditional balanced scorecard and the strategic objectives that the company is trying to achieve
And the cause and effect linkage between each of the various initiatives are identified.
For each strategic objective, a measure of KPI should be defined to represent it and measure progress towards the strategy.
Key strategic initiatives are defined to implement the strategy
Ownership of each initiative can be assigned to individuals
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
The management process can be used with a balanced scorecard on two levels - the operational and strategic levels.
Operational review ensures that the organisation continues to do the right activities.
Strategic review questions the assumptions made and whether the right choices have been established and made.
The area where IT can help are shown.
To do this all at once is a big task and many organisations build this up over a period of time.
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
© 2004 Capgemini - All rights reserved
