Increasing numbers of organisations worldwide are implementing performance management (PM) software to better manage all aspects of strategic and operational performance.  Many organisations are undertaking these initiatives for the first time, but not all know how best to go about introducing the software to their organisation.

So how should you get your performance management system up and running?  Although no two organisations are the same, we have identified six generic models that represent broad approaches that customers have taken and have been proven to work successfully, based on nearly 200 deployments of the Covalent CPM system.

Read on for our tips on choosing the right implementation model for you and how to enjoy longer-term success with your performance management system.

The six implementation models

1.  Big Bang: A corporate-wide roll-out in most or all departments in one phase.

2.  SUSA: Focus on Site Admins and Super Users (SASU) only.

3.  Departmental: Start with a pilot in one department then progressively roll out to others.

4.  Corporate-centred: The corporate performance team undertake all the work on the system.  Give users view-only access, with no/limited data updating.

5.  Incremental: This approach is based on demand from users who want more features as they become more familiar with it.

6.  Module-by-module: Introduce users to just one part of the system first (maybe PIs or actions) and then other areas as they become more familiar with the system.

Selecting the right model for you

This will depend on a combination of factors:

1.  Familiarity: Are users familiar with the concepts/functionality of a typical PM system?

2.  Culture: In terms of the organisational culture, are performance management processes well established or are they just being introduced?

3.  Need for speed: Is the project time-bound?  If there is a major driver to get people up and running with the software as soon as possible, some of the approaches which take a more incremental approach will be less suitable.

4.  Usage: Is there a fair degree of clarity about how the system will be used and how people will interact with it?

5.  Budget: Do you have any limitations associated with the budget to purchase user licences?

Tips for long-term success

Plan! Whether your organisation is large or small, and your PM goals are substantial or modest, a clear project plan is a must before implementation begins. Decide how you want the software to reflect the organisation’s business decisions and your required outputs can help to plan how you will use the system.

User enthusiasm: A key organisational goal must be to have a large pool of users who are both comfortable using the PM system and enthusiastic about the benefits it will bring them.

Wide distribution: Another important target should be to have the software administration load distributed widely so that there are many different users updating the information across the organisation.

Selling the concept: Provide training/education and really sell the concept; getting buy-in to using the software is a pre-requisite for a successful implementation.

Management buy-in: Top management support for the performance initiative is essential for ensuring the new PM system becomes ‘part of the day job’, ideally with the CEO leading by example and fully embracing the functionality in the performance management software.

And finally… Enthusiasm, coupled with a comprehensive software tool, will help your organisation to successfully transform performance and bring about positive change.

Read it in full

Read the complete Best Practice Guide to implementing a CPM System, including testimonials and implementation recommendations from customers.  Find it under ‘White Papers’ at http://www.covalentsoftware.com/resources/product/corporate-performance-management.php.

Turn appraisals into a truly positive experience for employees, managers, the HR department, and the company as a whole with these tips for appraisers…

1.  Justify it. Explain the rationale of the evaluation process to the employee.

2.  Don’t rush! Allow enough time for the meeting and for sufficient dialogue.  But don’t get sidetracked or bogged down in details.

3.  Listen! Don’t do too much of the talking yourself.  Actively listen to the employee.

4.  It’s outcomes that matter. Discuss the results of activities, rather than the activities themselves.

5.  Tackle performance issues. Avoid underemphasising or overemphasising performance problems.  Don’t be too negative, or over-praise, when you do discuss problems.  Always retain objectivity so you don’t risk becoming emotionally involved.

6.  Give examples. Always cite specifics to support the performance ratings you have awarded the employee.

7.  Never compare! Remember that it’s unfair to compare employees.  Instead you should make sure you make individual assessments.

8.  Beware the ‘halo effect’. Consider performance feedback collectively and objectively.  Avoid basing a favourable overall rating on only one job aspect or the most recent good thing the employee has done (the so-called ‘halo effect’).

9.  Devise solutions together. Involve the employee in creating solutions to performance problems, building on the employee’s strengths for targeted development.  Produce written plans of those solutions, with specific goals, objectives, and target dates.

10.  Summarise. Close with a summary that leaves the employee with a clear understanding of where they stand, what they need to do to meet standards, and how and when you will help in that process.  If the employee disagrees with any points discussed, ensure they are aware that they can document this on the feedback form or discuss their concerns with the HR department.  Swiftly follow up the meeting with all necessary copies and confirmations, and ensure documents are filed and copied to relevant departments (HR department and your own line manager typically).  Action as necessary any commitments you’ve made for support, training etc.

Do you want to make your appraisals worthwhile?

Covalent’s Theory Taster series offer further advice on the staff performance reviews, available at http://www.covalentsoftware.com/resources/product/employee-performance-management.php.

• What principles are people working to i.e. what’s driving their programmes?
• What options are people testing to help them achieve efficiencies?

In this session we look at the detail of who’s doing what – you can then chat with them and share the learning.

Our final session will focus on my thoughts on where do we go next?

Who is doing what – what’s the detail?

Principles – who’s doing what?

Customer focus - Calderdale Council have been looking at customer ‘groups’ and locations of their areas of high council tax arrears.  They’ve been mapping out trends and have started targeting benefit promotions and methods of financial inclusion in those areas.

They have also been looking at areas which have communities in them who are likely to go swimming.  Calderdale have mapped out leisure facilities and found out where the gaps are.  This then allowed them to focus their building leisure investment in these areas to promote wider healthy and wellbeing agenda.

Strategic Asset Management – A review across West Midlands is seeking to save £640 million over 10 years by reviewing their assets and pooling these resources.  This shows the potential of what efficiencies could be made through property rationalisation.

Income generation – in Camden, the 4^th wealthiest borough in London are asking their banking and lawyer partners to give up some of their bonuses to contribute to saving some services e.g. Support to the vulnerable, libraries etc.  We’re not used to asking such direct questions – but given the current climate, why not!

Neighbourhoods – There are many examples where ‘locality’ working is driving a focus of improving neighbourhoods and engaging communities in decision making.  In North Yorkshire there have been trials for Participatory Budgeting – mixed success, but in those pilot areas they have been well received and the concepts have extended to more localities.  Durham County has developed around 10 Local Area Partnerships, each with a significant level of funding for their Boards to decide on their priorities in the area.  These Boards are made up of a wide range of stakeholders including local businesses and the voluntary sector.

Models – who’s doing what?

Joint Services / Management – many examples working at the moment in District authorities such as Hambleton and Richmondshire; Adur and Worthing; High Peak and Staffordshire Moorlands, Bromsgrove and Redditch.  Whilst shared services have developed further in Districts, feedback has been for those that have, they have been in a better position to face the spending cuts than they would have been previously.  There is no reason why it won’t across large Authorities.  Oldham and Rochdale are right now looking at shared services and management.

Hammersmith & Fulham LBC, Kensington & Chelsea RBC and Westminster City Council have drawn up proposals to combine library services in a move they say will save more than £1m-a-year.

The AGMA Group (Greater Manchester Authorities) are also currently looking at opportunities for efficiencies within priority themes.

These are just a few examples – many more are following suit.

Neighbourhood focus – an example of a formal partnership includes Liverpool City Council who is looking at devolving a large range of services to a lead provider in areas.  Such services include environmental and economical services.  No-one can yet be named here in terms of winners of the contract, but these examples are certainly stirring up competition in the area.

Insourcing – many examples can be provided here for you to contact and share the learning.  Cambridgeshire and Northampton County Council have joined in a back office shared service venture which they are looking to sell to others.

Birmingham City Council has set up a company offering urban design and building consultancy.  Kent is another where “Kent Top Temps” provide temporary and permanent staff to public and private companies e.g. Teachers, drivers, care workers.  They also have set up “Kent County Facilities” which provides building management to public and private companies.

Norfolk council set up something similar called Norfolk County Services Ltd and NPS Property Consultants Ltd, a part of the “Norse Group”. They sell waste services, building maintenance, printing and catering.  This company has undertaken joint venture partnerships with Hull City and Waveney District with the aim of a 50% profit share

Similarly outsourced services feature in “Essex Cares” and “Chelsea Cares” who provide adult care services to Council customers.

Mutuals – Rochdale Metropolitan Council is the home of the “co-operative” and as such is moving very quickly on a mutual / co-operative model.  They are transforming their ALMO into a fully mutual organisation

Many organisations are looking at this model as a way of transferring services to the public and creating ‘mutuals’.  Areas of North Yorkshire are looking at their Tourist Information Centres and Public Conveniences as a possibility for mutuals.  Lambeth is setting one up to run its Brixton Recreation Centre; they are also promoting that they are looking at becoming the first “co-operative council” although this is very much early days

Torridge and Teignbridge are looking at a mutual model to deliver all support services.  Hammersmith and Fulham are pursuing how they could provide Children’s Services with staff, commercial partners and neighbouring local authorities.  Westminster is looking at working with other neighbouring local authorities to set up an Arms length mutual for children’s services.

Outsourcing can be highly controversial and so some decisions are creating sticking points.  Suffolk was looking at taking the whole of the services out – they’ve now retracted on this due to political agendas – but at least they’ve put something on the table for discussion.

Selby Council are cutting their Core Council Staff to 14 (from around 400) – these 14 will support councillors / democratic services and monitor contracts delivered by a new Service Delivery Vehicle.  This SDV will have a mixed approach to procurement in order to deliver services – maybe through outsourcing, maybe through shared services, maybe insourcing

South Derbyshire and Northgate have entered into a contract with the private sector to save £2.1 million over 7 years through managing finance, OD, Revs and Bens, IT, Business Improvement and customer services.

Barnet is looking to outsource all its back office services which means 70% of it’s remaining workforce.  The services include IT, HR, Finance and Procurement.  This is also looking to include back office for Adult Social Care services and also DEVELOPMENT and REGULATORY services

Off-shoring – Birmingham are pursuing to export 100 computer jobs to India – whilst there might be political and Union challenge – again, it’s a business proposition that could be looked into

Customer Choice – Barnet is seeking to create an “EasyCouncil”  now called “OneBarnet” where residents pay additional fees for faster or better services.

With all of these examples it’s going to be ….. Watch this space !

Covalent recently surveyed HR professionals to gain insight into employee appraisals  practices within their organisations.  The research was carried out at HR Software Show 2011 interviewing 119 HR professionals.  The results showed that many UK businesses are failing to manage employee performance, meaning that they are unable to align employee goals with strategic objectives.

Strategic value

We found that that only just over half of organisations (57 per cent) have all employees completing annual appraisals.  This suggests that the other half fail to see the strategic value in staff reviews and, crucially, are unable to align employee and corporate goals for maximum performance.  In addition, promotions and pay rises are often closely linked to annual appraisals and failure to manage this process effectively results in employee dissatisfaction, affecting productivity and staff turnover.

Competency gaps

The research discovered that less than a third of employees believe that their organisation’s appraisals process is effective at driving employee development to reduce competency gaps, while only 35 per cent feel that their organisation is very effective at assessing competency gaps through appraisals.

The lessons

It’s hard to understand how so few organisations fully recognise the importance that annual appraisals and employee performance have on their business’s success.

1.  Employee engagement: For business prosperity in an adverse economic climate, it’s vital that employees are engaged with the corporate strategy and their role in delivering it.  Annual appraisals facilitate important discussions between managers and employees.  This means that employee progress can be tracked and their objectives can be integrated into the business plan to formulate a clear path to success.

2.  Resource management: Determining critical roles, skill gaps and poor performance has never been more important.  In the current climate, staff resources need to be fully optimised and staff appraisals management is an essential ingredient in ensuring strong corporate performance.

• What principles are people working to i.e. what’s driving their programmes?

In this session we look at:

• What options are people testing to help them achieve efficiencies?

Our final two sessions focus on:

• A look in detail at who’s doing what
• Where do we go next?

Models

Joint Services / Management – lots of examples where organisations are sharing services and/or management.  Success varies. 

My personal experience of shared services is that the very first thing that must be achieved is political buy-in to the concept and the willingness to develop a business case to see if sharing is a viable option.   The reality of this willingness is tested once the detail starts to become clear – especially about who ‘hosts’ the services and who ‘employs’ the staff.  These are often very sensitive and can ‘make or break’ the decision.

Usually the politicians want to see improved services and efficiencies but want the sovereignty and independence to be maintained – which is absolutely possible and worked extremely successful.

I have found that a service by service approach to shared services, based on an opportunistic moment such as vacancies arising, can bring about a certain level of efficiencies.  This does however depend on the size of the service and complexities about employment rights.  On a positive note by exploring the possibility of shared services this brings the expectation that at any opportunity that arises, a shared model will always be tested to see if it is a preferred way forward.  On a negative note, a lack of future planning and strategy around a wider potential for shared services and management will not give the transformation programme the impetus for success and not deliver the pace of change required.

Shared management is where there is one management team leading more than one organisation.  This is usually from the Chief Executive to the Executive Management Team, through to the individual managers of the services.  There will be a level where this becomes impractical as you progress through to junior management levels.  On a positive note, shared management really does bring about efficiencies – and relatively quickly.  It also then helps shape the future programme going forward.  The message is very clear that a shared approach will be proactively pursued going forward.  On the downside there is often significant fall-out i.e. if there are no vacancies then it is clear that a redundancy programme is the way forward.  Restructuring is never easy and is very highly emotive – it needs very careful planning, management and a robust communication strategy.

Neighbourhood focus

Other models include informal Partnerships – you will have a lot of these anyway and are highly likely to be working well with partners such as housing providers, police, health providers etc in sharing information and data.  Often there is really good partnership working in neighbourhoods supporting issues such as anti social behaviour, community cohesion and environmental matters.

A formal Partnership model is clearly different.  Organisations are looking at how written agreed protocols at a very local level can share funding e.g. community budgets as well as resources and knowledge.

The aim of these informal or formal partnership arrangements are that the focus is at a neighbourhood level – not at a service or departmental level.

Procurement – organisations are investing time, effort and energy in identifying what they spend on what and seeing how supplies and services can be procured more efficiently.  Group your spend together to get better deals – e.g. Transport vehicles / fuel – opportunity to share with partners.  This will give you commercial advantage.  The private sector categorise spend and have clear ‘supplier relationship managers’ at a senior level so that any sign of difficult relationships or tackling below par performance is dealt with straight away.  Clearly organisations are inevitably hooking up with each other to support procurement deals and gain value in volume !

Insourcing – is about doing it yourself and you need to check out how competitive this is.  Ensure your business case accounts for picking up the costs of supporting central initiatives and structures if this is the case.  The key message from the sector is only insource what you are good at.  Identify why you are good at it and what gives you the USP.  If you’re delivering a poor service then you might want outsource it – if you’re doing really well and at the top of your game – you might want to SELL TO OTHERS.

REMEMBER that Efficiencies are about a “net balance” – made up of costs and income – what opportunities are there for income generation as well as reducing costs?

Outsourcing – is about you contracting out to external providers.  Whilst we think this is usually to the private sector e.g. Waste Management; Support Services; Contact Centres it might be that you are outsourcing to another organisation who has insourced their services given their competitive advantage.   Outsource what you are not so good at – and only where there is clear gains in financial and service quality terms.  You MUST build in the concept of innovation and improvement as a matter of course – without the cost, otherwise your contract will be out of date before you’ve started !

Off-shoring – this is overseas outsourcing which often provides a cost benefit, but it might provide technological advance if you are choosing an overseas partner because of their knowledge and innovation.  Clearly press coverage means that the social responsibility aspect of your service and decision must be fully pursued.

Mutuals – this is the idea that staff and local volunteers can run council services as a business through a limited company (Community Interest Company) e.g. Libraries, community centres.  It’s about the idea that this empowers staff and they know what the community (because the community are a part of this model) wants and that this is a method that can reduce overheads.  “Giving power back to the people”.  It has been mooted by central government that they should have a mentoring relationship with the private sector and some commercial companies have offered this e.g. Tesco’s

Customer Choice – this model is where the organisation agrees with the customer what the basic service will be and for what price – and then any ‘extras’ are paid for.  This has been nicknamed the ‘easy jet model’.   The Housing sector is looking into this model e.g. provision of a basic repair service and then certain other repairs would be rechargeable.  In relation to empty properties a certain level of cleanliness would be agreed, but then a customer would pay for a higher standard.

Whatever your model devise the business case for other options – but bear in mind your purpose, the process you want to go through, your people and partners involved, expected performance and your PR plan.  Refer to our YCChange 6P model for excellence !

Posted by Yvonne Castle of YCChange Consultants

Q: What options are you testing?

First, he referenced a new report from KPMG that found that addressing business-wide risk ranks fifth in the list of priorities for the average senior business executive in 2011.

The survey discovered that this priority fell from fourth place in 2010 to fifth place this year despite the number of senior executives recognising it as a “hot topic” increasing.

More than 1,500 chief financial officers and chief executive officers across 22 markets and 15 industries were included in the KPMG survey about their business priorities for the next six months.

In order of ranked importance, risk lagged behind realising cost efficiencies, improving cash and capital management, exploiting growth opportunities and preparing for major business model changes.

Covalent believes that while achieving efficiencies and maximising cash management are undoubtedly (and justifiably) top of the list in terms of priorities, it is interesting that exploiting opportunities for growth and preparing for significant changes in business models rank as higher priorities than the management of enterprise risk. Both of these priorities inherently expose an organisation to high levels of risk and it is potentially dangerous to pursue them without intrinsically embedding risk management into the process.  Covalent warns of the dangers of “divorcing” risk management from strategy execution, since the two need to be tightly integrated to ensure success.

The second report from the Aberdeen Group found that companies with the processes and tools to see risks and quickly act on them hold the key to a sustainable business.

The report, Managing enterprise risks: an executive’s guide to reducing corporate liability and costs, said it is clear that top-performing companies are more likely to realise the benefits that effective enterprise risk management (ERM) will bring to their business.

It states that “It is clear that companies with processes and tools that enable clear visibility to risk entities and a means to react quickly to mitigate them in a dynamic environment are going to be the ones that hold the key to a sustainable business”.

It continues by saying that companies should know that embedding ERM in all business process reduces corporate liability, adding that firms with ERM as a “layer one function” – something seen as a key part of business processes – see tremendous improvements in their key performance indicators.

The research showed that 46% of top-performing companies are more likely to support the understanding or risk and co-ordinate risk management processes and 109% more likely to have established roles and responsibilities within departments to oversee risk initiatives.

In the report, Aberdeen Group also references a couple of its own earlier surveys from 2010 that found that “top-performing companies” had a 23% reduction in risk value and a 22% growth in new market revenues in the past 12 months.

Additionally, they found that 69% of top-performing companies were more likely to be able to integrate and align risk with corporate goals.

Aberdeen discovered that top-performing companies are also integrating the use of BI tools (such as query and reporting, heat maps, dashboards and scorecards) into their risk management process. It found that technology can facilitate ERM by automating risk identification, documentation, aggregation, assessment, monitoring and reporting.

Covalent firmly agrees that strong corporate performance goes hand in hand with robust enterprise risk management.  As well as the effective automation of the risk management process itself, aligning risk with corporate objectives is crucial to ensure successful strategy execution.

Covalent also welcomes the finding that technology can play a key part in effective risk management.  Covalent’s enterprise risk management application automates and streamlines the entire risk lifecycle and fully integrates and aligns risk management with strategic objectives.

Beko was recently in the firing line following its mismanagement of a recall of dangerously faulty fridge freezers – a problem which may have begun four years ago.  The company is however not alone. In January 2011, the world’s largest car manufacturer, Toyota, announced that it was recalling nearly 1.7 million of its vehicles worldwide over concerns about a possible fuel leakage due to cracked fuel pipes. This was the latest in a long line of bad publicity stories to damage Toyota’s hard-earned reputation as a producer of quality cars. In the past 18 months, it has had to recall around 12 million cars, including 14 separate recalls last year, for a variety of faults. Only in December Toyota agreed to pay a record fine of US$32.4m in the US, following a US$16.4m penalty in April, over its handling of the recalls.

As is often the case with stories that impact company reputation, how the company reacts is almost of more significance than the event itself. Many commentators highlighted that Toyota’s slow and awkward responses to previous incidents only made matters worse, but that Toyota seemed to have learnt some of those lessons with more complete and frank disclosure early with this incident, and a clear plan of action for the public to deal with the situation.

An honest and colourful email from the recently appointed Nokia CEO, Stephen-Elop, that was leaked to the press in February 2011 brought another type of high profile risk to the public eye – that of not reacting to the risks posed by competitors. It also highlights that even where risks have been identified, taking appropriate action can be challenging.

Mr Elop compared Nokia’s situation to that of a man standing on a “burning platform” forced to decide whether to stand still and be “consumed by the burning flames” or jump into “freezing waters”. He said that Nokia was facing “…intense heat coming from its competitors, more rapidly than ever expected.” Elop said it was “unbelievable” that Nokia still did not have a device to rival Apple’s iPhone, which first went on sale in 2007, and has since “changed the game” whilst Nokia, “…still doesn’t have a phone that is close to their experience.” Elop also admitted that Android only “…came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”

It is hard to believe that Nokia didn’t see these competitive threats and failed to properly identify and monitor the risks. Instead, it is guilty of not acting quickly or effectively enough to mitigate the risks. In a call to action to support a new strategy, Elop concluded, “We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.”

There are lessons to be learnt from this example on taking action to address identified risks:

• Ownership: make it clear who “owns” the risk and who is responsible for dealing with it. Elop claimed the company “lacked accountability and leadership”. Whilst this shortcoming undoubtedly applied far wider than the context of risk management, clear lines of risk ownership are fundamental to effectively dealing with risks when they happen.
• Making change happen: just being good at something isn’t enough, you need to initiate action that will make change happen. Elop claimed that, “We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough.” Again this issue is broader than the risk management context, but highlights the need for effective action to mitigate identified risks; and in the case of competitive risks, these mitigation actions typically need to happen quickly.
• Aligning risk with strategy: while Nokia may have identified the potential risks arising from competitive offerings, had they considered the true impact of those risks in the context of their own corporate strategic objectives and how said risks threatened those same objectives?  Or was it a classic case of simply identifying and considering a risk in isolation, wholly divorced from the strategic aims to which they related?

Peter McHugh is CEO and founder of Covalent Software.

http://www.covalentsoftware.com/product/erm/ 

• What principles are people working to i.e. what’s driving their programmes?
• What options are people testing to help them achieve efficiencies?
• A look in detail at who’s doing what
• Where do we go next?

Part 1 : National Transformation Programmes : What principles are people working to?

Principles

Customer-centric services – This is where your reason for being should be driven by customer feedback and analysis – i.e. Your Corporate Plan is driven by what your customers need / want in your area and then this is translated into your Service Plans.

Organisations are collecting information about their customers, not just information about diversity characteristics e.g. disabilities, ethnicities but about other socio-economic characteristics and habits including information on ‘touchpoints’ such as interaction with your services through complaints, requests for assisted bin collection, benefits etc.  These characteristics are analysed alongside demographic information to identify patterns.

You can then look at this information to see where you need to tailor services and/or prioritise and target resources.  It’s about knowing your customers and assessing their likelihood of using OR NOT USING your services.

Efficiencies – organisations are working through huge efficiency programmes identifying areas of change that will reduce costs and streamline activity.  Whichever tool you use to help you with this – it must be customer focused and must utilise ICT effectively.  Managing this change is essential as it is about doing things differently and doing different things.  Address productivity – identify what can enhance your productivity and what is a drain on your precious time !

Remember it also isn’t just about budget cuts – but income generation.  Organisations are literally ‘begging’ for money from key stakeholders in the area.  Also think commercially – what could you ‘sell’ that people would want to buy?

Partners – building on yours and other strengths to gain synergy – your partners may be other Local Authorities, or they may be from different public sectors such as health, police, fire services – but they may also be your private sector partners.  Strengths might be skills and knowledge i.e. Joint training programmes or it might be shared intelligence such as knowledge about your customers

Communities – local decision making; engagement and involvement – which leads to increased satisfaction.  Examples of devolving funds to local areas (may having looked at your customer profiling and locality issues) and getting the community to determine what services and standards they want in the area.

We’re in a climate where we can’t afford to stand still – the old saying of “standing still and you go backwards”.  Like change or not it’s inevitable – another modifies saying “only three certainties in life are death and taxes ….. And change”.  Today is about you making the opportunity to DRIVE medium and longer term SURVIVAL and lead the way for your organisation.

Strategic Asset Management – map out your assets and those of your partners.  Many organisations have started to pull these together and share buildings and hence maintenance costs and responsibilities.  This doesn’t have to stop at public sector partners, which is predominantly the examples we have at the moment – but why not talk to your key suppliers and employers in your areas from private sector?

Blog post by Yvonne Castle – For further information see YCChange

Setting up key performance measures

1.  ‘Key’ is the operative word: Choose your vital metrics and keep them to a manageable number.  If there are too many ‘key’ measures, they cease to be key!

2.  Assess the pain points:  Meet with managers and ask them to share their top five pain points – the things they worry about and barriers to achieving the best results.  Then work backwards to build performance measures around business needs to drive the company in the right direction.  Consider regulations, finances, operations, strategy and change, and the external environment.

3.  Don’t delay:  Rather than trying to get the absolute ‘right metrics’, just start with some educated guess work which can be tested and refined over time as you have more data with which to refine targets.

4. Strategy alignment:  It’s vital to link performance measures with strategic priorities.  Keep in mind when setting up performance metrics that they should be actionable and manageable, and that the results should contribute to organisational goals and improve the top and/or bottom line.  Don’t waste time and effort gathering data that nobody needs.

5. Results, not behaviours:  Make sure the performance indicators (PIs) measure outcomes, not activity.  It’s a mistake to focus all your metrics on behaviour (such as number of calls handled per day).  Organisations should seek to establish working standards for employees and then focus on measuring results – this is far more valuable for business improvement than whether Jim is more efficient than Barbara. 

6.  Think about the end goal:  People like to have a goal to aim for so consider setting long-term, ambitious Big Hairy Audacious Goals (BHAGs).  Monitor progress throughout and manage corrective actions to achieve these strategic goals. 

7.  Road test your metrics:  You’ll be investing valuable resources in your performance management process so you need to end up with the ‘right’ data.  So empirically test your metrics – they should be correlative rather than just formalised rules-of thumb pretending to be more useful than they are!  And if you end up with three metrics that essentially measure the same thing, test to determine the ‘key’ indicator of the three.

8. Use a software tool:  Once to have defined your key performance measures, invest in a corporate performance management system to help you make the most of the data.  A dashboard-based tool will prove invaluable for tracking progress, regularly reporting on performance to the Board and stakeholders, and initiating action before it’s too late.

Creating a performance culture

9. Create a performance culture:  Performance measures should be understood, accepted and influenceable across all levels of the organisation.  Involve middle management when building your set of KPIs – a respected performance management system works when it has top-level backing but isn’t simply imposed from the top!  Also vital for transparency and acceptance across the company is enabling staff to see how their day-to-day output contributes to organisational performance.

10: Staff engagement:  And don’t forget…  Research shows that 40% of all productivity is based on employee engagement, meaning that even the most ‘standardised’ work processes won’t necessarily produce desired or predicted outcomes.  Nurture leaders to ensure they are skilled in managing and measuring work and engaging employees in doing so too.

If you follow these ten tips you won’t go far wrong!  We would like to thank everyone who responded to the thread on LinkedIn.  Keep an eye on our blog for more top tips over the coming weeks.

For further information on monitoring your KPIs, check out www.covalentsoftware.com/product/cpm or sign up to our free resources page www.covalentsoftware.com/resources for access a variety of useful materials, including brochures, product tours, white papers and Theory Tasters exploring performance management concepts and applications

Q: What tips would you add?

Q: Yvonne, what made you set up your business to support organisations with change? 

A: My job before I set up YCChange took me into many, many organisations and my role was to take a ‘helicopter view’ and look at them objectively and form opinions about the quality of services and also the ability to move things forward and improve.  I loved doing this because the way that I did it was to talk to a wide range of people involved in the business and get their honest views of what was working well and what was not.  Performance was backed up by stats.  I was able to get a really good picture, pretty quickly and make recommendations of what to do next.  However, in my role I wasn’t allowed to help them – which is what I really wanted to do.  I’m a ‘roll the sleeves up girl and get stuck in’ !  So that’s when I left and set up the company – I’ve never looked back!                                            

 Q: So why did you want to work with Covalent?                                                                     

A: In one of my first assignments we needed to develop a performance management culture, but there was a home-made old, inflexible system in place for data collection.  We needed to bring the organisation into the 21^st century.  I formed a project team from across all services to research, market test and procure a new system.  Covalent were just one of a few providers we met.  The product can stand up for itself – it’s easy to use, flexible, can be tailored to your needs and it covers a wide spectrum of tools to support improvement and culture change.  Once I’d finished this job I got in touch with Covalent – the rest is history.  If you want someone to support culture change and performance improvement – not the technical side as that’s your specialism – then this is what we do, very successfully.  We’ve had some amazing comments back from our customers.

 Q: What benefits have you seen for organisations using Covalent?                                 

A: It provides an opportunity to strengthen (or start) their journey towards a real performance management culture.  Organisations are usually in a different place when they  decide to implement Covalent – for some it’s the first time they’ve had a sophisticated (whilst simple) tool to help them manage – not just record – results.  For others it’s about adding that level of integration of performance with risk and improvement planning.  For others it’s about marking the beginning of a new era and using the system to change behaviours.  I love working with all of these scenarios.  I’ve found that those customers who step back and think about change and performance improvement – and how they want to link lots of different processes together to have maximum affect – make a bigger difference to their performance results and also their levels of motivation and engagement with Covalent as a business tool.

 Q: Tell us more?                                                                                                                            

A: Well, I use a framework for change called the “6P Model for Excellence”.  It’s something that I’ve developed over the last few years but it’s a great tool and technique for ensuring that in planning something out – whatever that is – you capture all parts of the complex jigsaw.  When I say that organisations who link different processes together to have maximum affect on performance I mean they look at their Purpose first i.e. what’s the reason for change?  Then they check out their Process and ask is it the most effective way of doing things? (e.g. risk, financial management, service reviews etc).  Then they indentify the People who need to be involved in orchestrating and delivering change – and how will they involve them e.g. customers and staff.  Then they identify who are their key Partners?  We don’t deliver services on our own anymore and partners need to be working for the benefit of your customers.  Performance targets ensure clear measures of success of what you are doing and finally plan your communications strategy, with a clear approach to PR – both internally and externally.  In summary, if organisations look holistically at their change and improvement programmes, and integrate the use of Covalent into this, they will maximise their subsequent business results.

 Q: Many of our Covalent customers have been with us for a while – any advice on how to keep it fresh?               

A: I believe the plan is to get Covalent as a business tool, feeling so familiar with the people in the organisation, that they don’t even realise they’re using it!  That’s the trick of integrating it into everything you do.  If you’re having to relaunch Covalent on a regular basis then something is not working quite right.  I’d suggest trying the 6P Model to see if you can spot any gaps in opportunities for integration.

Q: It’s very difficult out there at the moment; it’s a challenging environment for many, if not all of us.  Have you any tips in general?                                                                                                    

A: I started out 2011 with a message around ‘personal resilience’.  Everyone I speak to is experiencing challenging times, and sometimes very unpleasant.  Change and uncertainty, especially when jobs are on the line results in people acting in a way that they would not normally do – protectionism, keeping information, trying to out-shine others for example.  Working out your own way to keep strong in these times is often difficult to do on your own.  As a coaching company I am seeing more people come to us for support.  Nothing beats having conversations with someone completely objective and working your own mechanism for survival.  My top tip for organisations is to recognise this and provide some coaching opportunities and an honest and open environment.  My top tip for each and every one of us is to work out your way to be resilient and ensure you act upon it daily

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