Performance is NOT just Results

The field of Performance Management is increasing in scope and coverage, and it’s doing so every day.  How do I know this?  Because there are more “Performance Management” consultants today than ever … and they bill a truckload to improve the performance of their clientele.

Further to that, Performance Management is now considered a sub-set of Business Intelligence (at least according to the large BI software vendors … add another truckload of costs).

We see Performance, within the context of organizational performance, being defined as the “achievement of results“, but what does that really mean?

To use a sports analogy, when is the last time the general manager of a baseball team cared that his clean-up hitter hit .500, if it was for a losing cause?  The batter achieved impressive results, by any measure, but how closely do those results contribute to the immediate success of the team?

Performance Management is as much about the alignment of measurement, as the measurement itself.

By that I mean that sometimes what we measure is more important than the results of a given measure.  I’ll give you an example:

Some of the top measurements reported in publicly traded organizations today is revenue.  Let’s assume for a moment that revenue is a standard measure, that can’t be “fudged” (I know: that’s a bit of a stretch).  If an organization reports year-over-year increases in revenue of 13% the market applauds.  But what does this really mean in terms of organizational health?  Why isn’t the 13 point loss of market share more interesting, or the 4% decrease in cashflow year-over-year, or the 18% increase in employee turnover?

The fact is that performance metrics or measurements without context, analysis, and alignment to organizational priorities and outcomes, are just statistics.  But the analysis I speak of isn’t the domain of rocket science or nuclear physics, but rather a blend of common sense and strategy alignment.