At BPS whilst we acknowledge this truism we also recognise the danger in defaulting to managing performance by using that which can easily be measured. Often this involves financial data; important and interesting as these are, being retrospective, they are not the metrics by which we should actively manage performance. We believe more balance is required and an understanding of the operational “levers” that reside behind the management accounts. Our mantra is to focus on the causes of cost and revenue real time, not react to the events of the past.

Or as Myron Tribus more eloquently put it:

• Performance measurement has to be conducted in the context of, and in alignment with, the stated Strategic Business Objectives, processes and capabilities of the organisation.

• The levers for on-going performance reside at the sharp-end; measurement needs to be put in the hands of the people who do and/or supervise the work (as opposed to it being something that they have done to them).  This needs to be done in such a way that they have a good understanding of the work and how to improve it, and are provided with the requisite authority, capability and tools so to do.

• The levers for long term performance and step-change improvement reside with management. Their focus needs to be on measures which drive the development of the business; identifying sound strategic opportunities, optimising business processes, removing the barriers constraining performance at the sharp-end, organisational learning and innovation.

• It is no longer acceptable (or even feasible) to focus performance on only one or two of the organisation’s stakeholders (e.g., shareholders and/or clients); to prosper in the long-term a wider perspective is essential.

• Furthermore, both the organisation and its stakeholders need to recognise that their relationships are reciprocal; stakeholders have to contribute to the organisation as well as expecting things from it.

• Measuring the wrong things or measuring things in the wrong way can be disastrous for the organisation. Developing KPIs is an iterative process; carefully conducted, off-line experiments that adopt the Plan – Do – Study – Act cycle are required. There is no “off the shelf” solution.

• Performance information needs to be highly visible, papering the walls in the area where the work is conducted, or at least in the location where the team congregate when on site. Information needs to be posted by those people who are responsible for it, rather than it being “covertly collected”, hidden in IT systems and being periodically reviewed long after the event by the upper echelons of management.

• Graphical representation and understanding variation and its causes are key to improvement; they are the best tools available to us for predicting future performance. Variation is totally lost in many measures (like snapshots and monthly averages).  KPIs that drive performance at the sharp-end need to highlight variation; at BPS we believe the key is the adoption of process behaviour charts. Process behaviour charts offer an entirely different dimension to our interpretation compared to tabulated data. Unlike other variation reduction approaches (like Six Sigma) they are simple to understand and easy to use. This allows them to be in the hands of the people who do the work – not residing electronically and the preserve of the “improvement” or “performance” specialist.

• Collecting performance information, populating KPI tables, publishing reports, etc., will only ever have a very limited impact on performance improvement.  Review of the right data, in a timely fashion by the right collection of people in a robust fashion, and taking corresponding action is what drives improvement. Sir Winston Churchill’s context may have been different, but these words are hard to improve upon:

• Improvement and learning should be everyone’s job; it is neither sufficient nor rewarding simply to do a job, even to do a job reasonably well. By ensuring that people have the skills and knowledge to really understand their work and the authority to make changes and deliver improvement, we believe the vast majority of people will respond by doing their very best. This intrinsic motivation is a far superior approach to extrinsic methods such as penalties and incentives.