Minding The Gap in Performance Management
The goal of performance management is to align employees' performance toward strategic goals within an organization. Given that purpose, it’s necessary for performance management to start with the strategic goals. Then, managers and employees (also known as knowledge workers) need to establish a baseline that everyone is familiar with and agrees to. There’s this thing at Bridgeport that we call, “The Gap” which defines itself as the space between the desired state and the current state. (There will always be a gap, otherwise people wouldn’t set goals.) With that being said, actions taken are necessary in order to move toward the desired state and away from our current state to reach a goal.
(“Trust gives you the permission to give people direction, get everyone aligned, and give them the energy to go get the job done. Trust enables you to execute with excellence and produce extraordinary results. As you execute with excellence and deliver on your commitments, trust becomes easier to inspire, creating a flywheel of performance.” - Douglas Conant)
When establishing a baseline, having the right strategy shows the difference between attaining a goal and almost attaining one. To have the right strategy is the difference between the companies that succeed and the companies that don’t. Let’s look at how organizations should use strategy:
A strategy is a method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.
To successfully achieve full alignment to your strategy, the connected strategic plans at all levels must be included in the scope of your strategy.
Strategic outcome is a key element of strategy, a desired result or change supported by a specific measure that indicates value generated for stakeholders.
Strategic alignment is the process of aligning an organization’s decisions and actions to support the achievement of strategic goals; strategic alignment brings about strategic outcomes.
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” - Sun Tzu
Now, the 4 four components of strategy are the goals for the organization, the assumptions used to settle on an approach (also known as the foundation), the decisions (for testing hypotheses), and the outputs and activities necessary to execute the decisions from the approach. Pictured below provides a visual representation of the four components of strategy, completed in that order.
Performance Management is all about iteratively shaping the environment to make it easier for the organization to align with decisions for actions that move the organization closer toward the goal. Ensuring that people know the goals and progress toward the goals is one way to shape the environment. The organization can use that information to shape their decisions so that knowlegde workers choose the right activities to reach the goal. Another way is by helping employees use the right decision-making process so they make objective decisions. Another way is to establish a culture which verifies that the right foundations are used for decision-making. These are all “levers” that management can pull to “nudge” the organization toward the right goal.
“Leadership and learning are indispensable to each other.” - John F. Kennedy
Many people ask me which levers to pull and when. I have to admit that I do not know the answer. Every organization and every situation is different. Organizations are made of people who respond often in irrational, unpredictable ways. As a result, management, at every organization, needs to conduct experiments to pull levers to guide the organization towards where they need to go. To that end, I have implemented methods at Bridgeport Digital using ‘Agile Performance Management’ to help our company reach its goal. Being agile means:
Aligning the organization along a shared and transparent transformation strategy and ensuring that a prioritized transformation backlog exists to execute that vision.
Continuously observe metrics tracking product delivery throughout while removing the inhibiting impediments.
Enabling execution of the high-level transformation processes with a primary focus on removing waste.
We want to be able to calculate flow on a large scale and identify the common impediments that will drive the next evolution of our Agile journey. It all starts with having the right strategy for your company that will drive growth and help you accomplish your goal.