Volume No. 51

The Missing Ingredient in Change

Over the last few weeks, a few readers have asked me to comment on “how a good performance management methodology plays into some of the newer, and more popular change initiatives” at play in their companies – “whether it be six sigma, lean, value centric CRM,” or any of the other major initiatives at play today inside our organizations.

First, I’d be remiss if I didn’t say, for starters, that performance management is NOT a change methodology in and of itself. Rather, it is a discipline – timeless in terms of its applicability, and blind of any bias in change methodology.

For years, we at ePGI have preached that Performance Management sits at the center of change. While it may appear a little self-serving for an organization providing PM solutions, few companies that have successfully embraced these newer methodologies would argue with the importance of performance management in their overall journey.

PM, in its most basic form, is a process of measurement, diagnosis, and reporting that accompanies the journey of change. PM serves as an organizational gauge, which measures both the progress and quality of change. Think of it like a pilot thinks of his altimeter, air speed and other key indicators central to air flight. No matter what model of aircraft a pilot chooses to fly from point A to point B – be it a single engine Cessna or a fancy new G4 cross continent jet – the basic elements of flying remain the same. The success of a flight depends on how well a pilot manages these critical indicators, and the supplemental diagnostic data that is available to the pilot on demand.

Case in point: I once sat next to a 747 pilot who described what the pilot was doing – play by play – as we made our approach into Sydney Australia. What he described was not what a typical passenger would think given all the dials, gauges, and fancy displays visible to passengers as they peek into the cockpit during boarding. Instead, what he described was very focused and deliberate- concentration on a handful of key indicators, with detailed drill downs available should something fall outside of “normal control limits.”

Long before balanced scorecard initiatives, six sigma programs, lean manufacturing methodologies…and the myriad of other efficiency and quality solutions that have come on the scene in recent years – Performance Management was the mainstay for any organization that was worth its salt. What the newer and more popular change methodologies have brought to the scene are faster, better, and more efficient processes to create and manage change. No doubt about that. But no matter which methodologies you choose to embrace, you’ll never reach a productive destination without a good performance management program. Performance Management is THE common denominator, central to any effective change program.

The great irony of performance management is that despite its importance in everything an organization does, it is perhaps the simplest of processes to get your arms around and master. And while organizations spend millions to train, educate, and master new and emerging change techniques, many still fail to spend the comparatively smaller percentage of time required to establish a good performance management foundation that will likely make or break the resulting ROI.

Simply stated, the PM discipline is really about providing the information and analysis required in effectively managing people and processes. For example, we’ve all been schooled with the age old – “Plan/Do/Check/Adjust” method for managing a particular function, process, or organization. Without an effective and clear process for measuring and analyzing performance, the execution of each of these steps would be severely impeded.

Now, take something like Lean Six Sigma, for example – one of these more recent and popular methodologies for identifying and capturing performance improvement. At its very core is an acronym called DMAIC – Define, Measure, Analyze, Improve, Control – a technique leaders in the six sigma discipline call a “structured data-based problem solving methodology.” Sound a little familiar? DMAIC, while hard to argue with, is really not too different from what successful organizations saw in years prior. Are the newer methodologies, better, and more rigorous? Absolutely. But at their core are still the fundamentals of a good performance management discipline.

My intention with this comparison is NOT to criticize companies who have sworn to follow a particular improvement methodology – in this case, the six sigma following. Rather, what I am trying to illustrate is that without a solid performance management foundation – good measurement techniques, good analysis and diagnostic practices, good goal setting procedures, and good tracking and reporting processes – few, if any of these approaches will achieve their desired outcome in terms of cost savings, quality improvement, or process speed and efficiency.

So as we embrace the new principles and techniques of these new change methodologies, let’s be careful to not overlook the simpler, and more important PM processes that are central to yielding the benefits these approaches promise. To use a sports analogy, performance management is really about good “blocking and tackling.” Game plans and strategies can and will vary from competitor to competitor. New game plans will emerge. New “gadget plays” will be introduced that will change the complexion of games to come. But without the fundamentals of blocking and tackling, few if any of those game plans would achieve their intended outcome.

Such is the case with performance improvement. As we navigate our change initiatives, let’s make sure we put the appropriate emphasis and resources on the PM fundamentals. The extra benefits that accrue will not only serve you well within your current improvement programs, but within the next generation of initiatives that are on your future horizon.

Author: Bob Champagne is a Vice President of Performance Management Solutions with UMS Group, Inc., a privately held international management consulting organization specializing in Performance Management tools, systems, and solutions. Included in UMS Group's product portfolio are a wide variety of performance tracking, reporting, and benchmarking solutions, as well as customized performance assessments and diagnostic services. UMS Group has consulted with hundreds of companies across numerous industries and geographies. Visit UMS Group at http://www.umsgroup.com or contact us directly at 973-335-3555.