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

Performance Management Linda Balboul Lbalboul_2005@yahoo.com 012 8995 5433

Performance Management

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

Too many independent initiatives
Continuous Improvement Just in time EDI TQM sales force effectiveness Empowerment Customer Focus Productivity

No Clear Leadership
Personal agendas Politicking No agreed routemap

reskilling

Disillusioned Management
No consistent measures No stretch targets Shop floor disengaged

Performance management
Key components

Purpose Frameworks

Process
Measures People Information

Performance Management
Frameworks Purpose
Stakeholders Attention ROI Value from compliance Decision support

Processes

Balanced scorecard EFQM Value-based management/EVA Activity based costing Performance Prism

Strategy formulation Budgeting and forecasting Goal setting Performance feedback Risk management

People

PM
Measures
Financial and non-financial Short-term and long-term Quantitative and qualitative Lagging and leading Aligned

Culture Leadership/delegation Link to compensation Capabilities Communication and reporting

Information

Internal and external Available Timely, accurate and relevant Cost effective Well presented and understood

Performance Management
Purpose

70 60 50 40 30 20 10 0 Quality Delivery MD Lead time PM Price

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

Are we doing the right thing?

Operational

Are we doing things right?

Performance Management
Purpose
Attention to Strategic Performance Measurement

High

Low

Low

High

Attention to Tactical Performance Measurement

Performance Management
Purpose
Attention to Strategic Performance Measurement

High

The Explorers

The Crusaders

The Harvesters
Low

The Fighters

Low

High

Attention to Tactical Performance Measurement

Performance Management
Framework
Define the performance management framework Balanced scorecard EFQM Value-based management/EVA Activity based costing Performance Prism 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

Challenges A framework is no substitute for the thinking and decision making Remembering the purpose is improvement and not the framework Complication

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

Authority aims
Objective Why important to us?
Strengthen neighbourhoods Reduce crime Better place to live Attract investment Community representatives Map neighbourhoods

How will we do it? How do we know were winning?

Employment rates Crime rates Delay in funding

What risks could hinder us?

Performance Management
Framework Balanced Scorecard (BSC)
Update delivery structures Strengthen neighbourhoods Grow income

Strategic themes Perspectives

Enhance revenue opportunities

Improve productivity

Customer

Reliable and accessible services

Financial

Increase funding

Joint service delivery

Migrate customers to on-line services

Grow tax base

Internal

Secure funding partners Develop third party relationships

Automate processes

Service leadership

Learning and growth

Attract and retain key people

Improve management processes

Performance Management
Framework DTI Business Support
Our Vision:

To ensure the provision of well-focused, high quality business support

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 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

Critical Success Factors:

Our Perspectives:* Performance

Relationships

Processes

People

Our Objectives:

Increase Impact

Flexible, Effective solutions Target Customer groups Increase admin efficiency

Develop better relationships with partners & intermediaries

Maximise value & efficiency Improve management information

Encourage core behaviours Empower delivery partners High performing BS team

Improve customer experience

Performance Management
Process
Integrate the management processes Strategy formulation

Example best practices Take action

Take action on what matters most ensure everyone knows what a great days work looks like

Budgeting and forecasting

Goal setting Performance feedback Risk management

Prioritise
Focus on what matters, prioritise and do something

Challenges There are too many priorities There is no time to learn Being serious about establishing new management processes Budgeting processes can be monsters

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

Describe where we want to go Set targets and benchmarks Prioritise what to improve Prioritise skills/processes to improve

Trend analysis Segment hot spots Root cause analysis Improvement potential

Insights

Actions
Plan resources and actions Prioritise actions Identify underperformance

Process performance Measures against goals Detailed reporting

Results

Performance Management
Process

Strategy Update scorecard Question assumptions

Test hypothesis Simulate Cause and effect

Strategic Learning Loop Performance Scorecard

Budget

Test Focus Predict

Collaborate Allocate

Plan
inputs

Operational Learning Loop Action

outputs

Measure
Measure Analyse Present

Performance Management
Measures
Measure what matters Financial and non-financial

Example best practices Dont compromise

start from what we wanted to achieve and then work out how we were going to measure it

Short-term and long-term Quantitative and qualitative Lagging and leading Aligned

Outcomes
Focus on outcomes as well as inputs and outputs

Challenges Data quality Measuring can take on a life of its own

Use regularly
Use information regularly: this will improve its accuracy

Fit for use

.indicators will vary depending on the purpose of reporting accountability and BVPIsday-today service managementand the audience

Measuring just what is collectable

Performance Management
Measures

Output Outcome
Measure Process Objective Result National competitiveness Improved nations health Safer streets

Exams passed
Operations performed Arrests made

Performance Management
Measures

Indicator type Outcome

Question

What is the impact of this service? Is the project achieving its objectives? What level of service is being provided?

Output

How many units of service are being delivered?

Is what needs to be done being done?

Process

Are we on track to meet targets?

What resource are used to deliver the service?

Input

Performance Management
Measures Highways Agency Outcomes
Strategic Planning

Outputs
Budgeting

Inputs

Being an Efficient Organisation Being an Effective Organisation

Organ pers isationa pectiv l es ds & Rewar ives incent

a Str

Peo p

le

Having an effective strategy

Coa app ching rais & al

Mgt. process & cascade

Re vis por ibil ts ity &

gic s a te se Strpothe hy Objec tives alignm ent &

t eg ic

Being effective in implementing your strategy

Financial

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

& Is ies KP rch ra hie Processes & Systems

Performance Management
People
Enable people to perform at their best Culture Leadership/delegation Link to compensation Capabilities Communication and reporting

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

Challenges Avoid creating a blame culture

Turning priorities into action

Improving services means change Addressing under performance

Incentives
Give middle managers support and incentives

Performance culture
Help people to perform.create a climate in which they can empower

Performance Management
People

Organisational culture Management leadership Compensation link Education and understanding Communication and reporting Review and update of CPM system Data processes and IT CPM framework

79% 71% 67% 67% 63% 63% 50% 50%

Performance Management
People

Communicate
I know what to do

Motivate
I want to do it

Authority
I am allowed to do it

Capability
I am able 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 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

Challenges Measures without context are meaningless Gaining insight takes time Providing whats wanted rather than everything all the time

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

Load

Aim

Fire

Information

Insight

Action

Performance Management
Information

Late Departure

Customer Satisfaction

Performance Management
Information

Turnover Departure on Time (-) Meal Rating (+) (+) Cabin Crew Service (+) Customer Satisfaction (+) Willingness to recommend

Check-in Service (+)

Performance management
Key components

Frameworks

Purpose

Balanced scorecard EFQM Value-based management/EVA Activity based costing Performance Prism

Stakeholders Attention ROI Value from compliance Decision support

Processes

Strategy formulation Budgeting and forecasting Goal setting Performance feedback Risk management

People

PM
Measures
Financial and non-financial Short-term and long-term Quantitative and qualitative Lagging and leading Aligned

Culture Leadership/delegation Link to compensation Capabilities Communication and reporting

Information

Internal and external Available Timely, accurate and relevant Cost effective Well presented and understood

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

Performance Management

Q&A