Issue No. 11 May/2018
INTERVIEWS ACADEMICS CONSULTANTS. PRACTITIONERS. AROUND THE WORLD BERMUDA - ON THE PATH OF BECOMING A LEADER IN GOVERNMENT EFFECTIVENESS PHILIPPINES – BETWEEN ECONOMIC PERFORMANCE AND HUMAN DEVELOPMENT PERFORMANCE MANAGEMENT PROGRAM FOR CANADA’S CROWN CORPORATIONS ARTICLES BUSINESS SIMPLIFICATION – THE KEY TO INNOVATION AND SUCCESS WHY YOUR WEB HOSTING PLAN IS HURTING YOUR WEBSITE’S KPIS HOW ENGAGING DISENGAGED LEADERS WILL IMPROVE EMPLOYEE ENGAGEMENT + LIFESTYLE, HARDWARE & SOFTWARE, AND RECOMMENDED RESOURCES PORTRAIT
TOR INGE VASSHUS Performance Management – A Way of Life
INDEMNITY STATEMENT
Š 2018 The KPI Institute Ltd. All Rights Reserved. ID Number: TKI0182081 ISBN-13: 978-1721058082 ISBN-10:1721058087 An appropriate citation for this magazine is: The KPI Institute, Performance Magazine, Printed Edition, no. 11, vol. 5/2018, May, 2018, Melbourne, Australia Indemnity statement: The KPI Institute has taken due care in preparing the analysis contained in this publication. However, noting that some of the data used for the analysis has been provided by third parties, The KPI Institute gives no warranty to the accuracy, reliability, fitness for purpose, or otherwise of the information. The KPI Institute shall have no liability for errors, omissions, or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. Published by:
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CONTENTS
3 EDITOR'S NOTE
66 Individual Performance
6 NEWS 10 COVER STORY 10 Storytelling with KPIs - KPIs that go beyond insights by delivering impact
72 How Engaging Disengaged Leaders Will Improve Employee Engagement 74 Balanced Scorecard 74 The Balanced Scorecard vs. the EFQM Excellence Model
15 Carmine Bianchi - Academic
76 ASK THE EXPERT
21 Christopher Mills - Consultant
76 13 Elements of a Good Key Performance Indicator
27 Frank Hajdinjak - Practitioner 31 Carmen Cucul - Practitioner
78 LIFESTYLE
34 Amir Orad - Practitioner
78 Focus – the key success factor for boosting productivity
36 PORTRAIT
80 Migrating from organizational to personal performance. Useful or not?
36 Tor Inge Vasshus
81 Time management and personal development – a balancing act
40 AROUND THE WORLD
82 HARDWARE
40 Bermuda - on the path of becoming a leader in Government effectiveness 42 Philippines – between economic performance and human development 44 Government Performance Management in Malaysia 48 Government Performance Management in Vietnam 51 Performance Management Program for Canada’s Crown Corporations
54 ARTICLES 54 Performance Improvement 54 Business Simplification – The Key to Innovation and Success 56 Eight Factors that Contribute to the Success of a Business 58 Digital Performance 58 How to Successfully implement the Internet of Things 60 5 Ways Cloud Hosting Is Changing the Business Environment 62 Why your Web Hosting Plan is Hurting your Website’s KPIs 64 Operational Performance 64 How RPA is Enhancing the Efficiency of MAY 2018
66 Key Employee Engagement Strategies for 2018 70 The Pros and Cons of Today’s Appraisal Methods
14 INTERVIEWS
2
Business Operations
82 DataTraveler Ultimate GT 82 The Jabra Evolve 75e 83 Samsung Flip
84 SOFTWARE 84 TeamViewer 85 Squidex 85 Screen Recorder Pro
86 RECOMMENDATIONS 86 Movie: The Merchant of Venice 87 Books: The following is a list of must-haves for your 2018 reading list
Aurel Brudan CEO, The KPI Institute Andrei Costea Head of Publishing & Media
EDITORIAL TEAM Maria Juncu Andrei Ungureanu Ana Lechințan Andrea Minelli Oana Gavril Olivian Breda Paul Albu Andreea Vecerdea Marcela Presecan Cristina Mihăiloaie Adelina Chelniciuc Adela Tudorache
DESIGN Javier Rocha Head of Graphic Design
With these thoughts in mind, we proudly announce the launch of our eleventh issue of PERFORMANCE Magazine. PERFORMANCE Magazine is The KPI Institute’s prime resource for insights into the discipline of Performance Management. The content published in PERFORMANCE Magazine pursues high and wide for some of the best, latest and most pressing topics of discussion in Performance Management and in adjacent areas of interest.
EDITOR’S NOTE
STAFF EDITORIAL COORDINATION
Encompassing The KPI Institute’s experience, research and expertise, PERFORMANCE Magazine – Printed Edition provides its readership with first-hand howto, resources, and insights from practice, so as to assist them in their performance endeavors and in becoming state-of-the art professionals.
This edition provides details on the subjects of Performance Improvement, Digital Performance, Individual Performance, Balanced Scorecard, KPIs, among others. Flip through pages of interviews with renowned experts, extensive research studies, concept presentations, insights from practice, alongside software or hardware reviews, and books and movie recommendations, all related to performance management. In our 11th issue of PERFORMANCE Magazine, we shall delve into the professional life of Tor Inge Vasshus, Founder and CEO of Corporater, USA. Mr. Vasshus is an experienced practitioner, consultant and advisor of management methodologies, an international speaker on performance management at conferences and universities, as well as an innovative software solutions provider to enterprises that aspire performance excellence. His approximately 30 years of experience in the field have led him to the conclusion that KPIs, and Performance Management in general, are much more than mere numbers and measurement methodologies. His company, Corporater, builds upon this mindset and has integrated it in its core vision: “KPIs are more than just numbers. KPIs tell stories, backed up by analytics, management and actions.” Take part in public sector implementation processes from various countries and nations, as each edition will feature extensive analyses on the subject, compliments of our writers. Also, best practices, alongside the latest trends, will be offered for a wide variety of performance-related sub-domains, from KPIs & the Balanced Scorecard, to Operational Performance. Last, but not least, the magazine features recommended resources for professionals interested in combining leisure and professional development, such as books and documentaries. So now we invite you to take part in a world dedicated to integrating performance and all that is comprised in the search for improvement, in its smallest details. Enjoy this May's PERFORMANCE Magazine! As we are always interested in gaining insights from practitioners who activate in a multitude of environments, contact us at editor@kpiinstitute.org if you are interested in becoming a Guest Post Editor, or having your interview featured in PERFORMANCE Magazine. Andrei Costea Head of Publishing & Media, The KPI Institute MAY 2018
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SCHEDULED COURSES Upcoming Training Courses
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Asia Pacific
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25-27 Jun 2018
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4-5 Jun 2018
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1 Jun 2018
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09-11 Jul 2018
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23-25 Jul 2018
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11-13 Jul 2018
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Certified KPI Practitioner
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Certified KPI Professional and Practitioner
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23-27 Sep 2018
Certified KPI Professional
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21-23 Oct 2018
Certified KPI Practitioner
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24-25 Oct 2018
Certified KPI Professional and Practitioner
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21-25 Oct 2018
Certified Personal Performance Professional (Express Interest)
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28-30 Oct 2018
Certified Innovation Performance Professional
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30-2 Oct/Nov 2018
MAY 2018
For more details visit our store at: marketplace.kpiinstitute.org/scheduled-courses
THE KPI INSTITUTE’S PROFESSIONAL CERTIFICATION PROGRAMS
Framework v 2.0 2015
This program is meant to improve the practical skills in working with KPIs and developing instruments like scorecards and dashboards. Participants will acquire a sound framework to measure KPIs, starting from the moment they are selected, until results are collected in performance reports.
Certified Performance Improvement Professional
C-PM
PERFORMANCE MANAGEMENT
Framework v 1.0 2015
This course offers insights and best practices for improving performance in different scenarios, from data analysis and reporting, decision making and initiative management, to building a performance culture.
Certified Employee Performance Management Professional
C-EPM
EMPLOYEE PERFORMANCE MANAGEMENT
Framework v 1.0 2015
Attendees will gain exposure to best practices and key concepts and will learn how to establish and use criteria for performance evaluations, from implementation to improvement and maintenance of the company’s employee performance management system.
Certified Personal Performance Professional
C-PP
PERSONAL PERFORMANCE
Framework v 1.0 2015
The two-day interactive program will help you understand personal performance, by explaining the benefits and clarifying the process of measuring it. It focuses on identifying ways to boost your performance outside working hours.
Certified Data Visualization Professional
C-DV
DATA VISUALIZATION
Framework v 1.0 2015
An exclusive framework that provides insights on effective visual communication, through a rigorous approach to creating visual representations of vast information, techniques of standardization and tailored data visualization tools.
C-DA
Attendants will understand through practical learning how to effectively collect, analyze and interpret data by enabling managers/ analysts to draw insights from both quantitative and qualitative data, based on historical statistics and trend analysis.
Certified Benchmarking Professional
BENCHMARKING C-B
C-KPI
KEY PERFORMANCE INDICATORS
Framework v 1.0 2015
Framework v 1.0 2015
Benchmarking methodological uniqueness is represented by the identification and analysis of the processes that lead to a superior performance of a company, offering the opportunity to compare an organization’s performance against industry competitors.
Certified Supplier Performance Professional
SUPPLIER PERFORMANCE C-SP
Certified KPI Professional and Practitioner
DATA ANALYSIS
Framework v 1.0 2015
Participants’ skills in managing supplier performance and developing a strategic approach to procurement will be developed by enabling the identification of performance gaps and implementing action agreements with suppliers.
Certified Customer Service Performance Professional CUSTOMER SERVICE PERFORMANCE C-CSP
Framework v 1.0 2015
The course will help improve the business planning process and long-term organizational performance, through the use of strategic planning tools that will ultimately lead to smarter and quicker strategic decisions.
Framework v 1.0 2015
Participants will not only understand the importance and implementation phases for the Customer Service Excellence standards, but they will be given the necessary tools to implement it internally and measure its impact externally.
Certified Performance Audit Professional
PERFORMANCE AUDIT
C-PA
C-SBP
STRATEGY & BUSINESS PLANNING
Certified Data Analysis Professional
Performance Maturity Model Framework v 2.0 2017
This educational program presents a rigorous approach to diagnosing and auditing the maturity of performance architectures for 5 capabilities: strategic planning, performance measurement, performance management, performance culture and employee performance management.
Certified Balanced Scorecard Management System Professional
BALANCED SCORECARD MANAGEMENT C-BSC
Certified Strategy and Business Planning Professional
Framework v 1.0 2015
The course focuses on delivering all the information needed to fully comprehend the value of the Balanced Scorecard, as well as on developing the necessary skills for a successful implementation.
To browse through our upcoming training courses visit our online store at: marketplace.kpiinstitute.org/scheduled-courses MAY 2018
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NEWS
NEWS
> The Material that can be Programmed to Self-Destruct Scientists have come up with a new material that simply selfdestructs at a specific time. This could be a groundbreaking discovery as this process, which emulates the way life uses and reuses molecules, could change the way some materials will be created and then destroyed.
> Uber buying into bike-sharing Ride sharing company Uber has recently acquired JUMP Bikes, a dockless electric bike service company, thus wishing to offer U.S. passengers an alternative transportation means. JUMP Bikes had rolled out in San Francisco and Washington, DC., but had been only a small player in the market, totalling up to 250 bikes. As a result of this transaction, around 100 JUMP Bikes employees will be joining the Uber ranks, but the bike-share company will carry on as an independent, wholly controlled subsidiary. JUMP Ceo Ryan Rzepecki noted that the decision came after a few talks with Uber CEO Dara Khosrowshahi, in which he quickly realized that both of their visions for their companies, as well as ride sharing in general, aligned quite well with one another. “[Khosrowshahi] believes the way we approach working with cities and our vision for partnering with cities” aligns with Uber’s mission, Rzepecki said. “That was important for me and his desire to do things the right way. This is a great outcome and gives me a chance to bring my entire vision to the entire world.” Moreover, Rzepecki mentioned that as more and more people live in cities, there’ll be a need for a more diverse array of transportation services, which is one of the reasons we can see Uber going from car sharing & hailing, into bike-sharing territory. In addition to this, Uber’s decision was also motivated by its fellow competitors’ moves. In India, it’s main rival Ola has also stepped into the bike-sharing arena, launching Ola Pedal, which is available on many Indian university campuses. South East Asian’s Grab and China’s Didi have continued in the same vein, launching their own bike-sharing services through Ofo and OBike. Rzepecki stated that these moves we’re seeing are a healthy development of competition, which will directly come to the consumer’s benefit. When asked whether JUMP will be entering any other type of partnership aside from Uber, he noted that “the idea of us being inside the Lyft app for example is not necessarily likely, but there may be other partnerships that we’re able to do that are less directly competitive.” 6
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If successfully implemented, the materials that don’t need to be recycled would simply disintegrate at an appointed time. This finding could lead to various products, including structures for drug delivery, transplant anchors and even vanishing ink. The secret behind these self-destructing molecules is that they would require a tiny input of energy to stay in their useful form, without which they would disappear. Study co-author Job Boekhoven, a chemist at the Technical University of Munich in Germany, explained that “They are materials that don't want to be that type of material. They'd rather be the original building blocks, they'd rather fall apart and be nothing." Together with his colleagues, Boekhoven decided to mimic life’s way of assembling materials and in order to do so the researchers created a few different types of materials that require energy input to stay in their current forms, which the scientists call supramolecular molecules. Their first attempt was a simple colloid made of tiny beads. Boekheven explains that as fuel is added, the miniature beads assemble like a string of pearls, and they can be tuned to assemble and disassemble in a certain order and at certain times. He admitted that he hopes that in the future these materials could be used to deliver drugs. These beads could be very useful especially for those drugs that need to bypass stomach acid. In such cases, if they are timed to disassemble only after they've passed into the gut, they could protect drugs until they reach the desired location.
NEWS
The researchers however, did not stop here. They also tested a fluffy crystalline material that is normally see-through but becomes cloudy and opaque when a fuel is poured on top of it. The team believes that this material could be used as a completely erasable ink. "So, you can create a temporary message that erases with a predefined lifetime," Boekhoven said. According to him, such a material could greatly reduce the use of ordinary paper in things like bills, tickets, receipts, etc. One last material the researchers tested on is formed from long fibers that self-assemble to form structures that could one day be used to anchor a tissue transplant in place until the body can take over. This material would ultimately vanish when it’s not needed any longer. This new invention could open up the road towards new and amazing things, however it is still too soon to speculate as researchers in the field have just begun searching for the ingredients that are needed to make a real self-replicating particle.
> The Growth in Workplace Analytics A couple of years ago, Sociometric Solutions, an MIT spin-out, developed ID badges for employees to wear at work. Those badges were equipped with a sensor that allowed managers to track various aspects of the employees’ behavior. Even though Sociometric Solutions was launched a few years ago, a recent report from the Institute for Corporate Productivity suggests that such employee monitoring is on the rise. The paper “The Promising State of Human Capital Analytics”, disclosed the fact that almost 70% of organizations use some form of human capital analytics to monitor performance amongst employees. According to the research, “The future focus of professionals in the human capital analytics field will increasingly be on using analytics to guide strategic decisions and affect organizational performance.” The report reveals that senior managers are in favor of receiving data from their analytics projects, even though some of them don’t always use data when making their own decisions. Nevertheless, one has to keep in mind that the use of data comes with certain risks. For instance, many employees might believe that being compared with their peers would help to motivate them to new heights, unfortunately in most cases the reality turns out to be quite the opposite. Researchers believe this happens because when employees are unsure of how their performance compares with their peers they simply complete the task at hand and don’t worry about the ranking. That is why in some cases ignorance is bliss, because it prompts employees to work better as a team than to focus on their individual performance. Despite all this, data won’t stop playing an ever-increasing role in the workplace. That is why, such papers as the i4cp are a great help, as they can provide a number of case studies from companies that have already started to implement their own people analytics ventures, thus paving the way towards a better implementation of workplace analytics.
MAY 2018
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NEWS
> NASA and Tesla’s great space hunt! It feels like Elon Musk’s great breakthrough – launching a Tesla Roadster by way of the SpaceX Falcon Heavy rocket, was just yesterday. As people are still getting used to the idea that humanity’s managed to launch a automobile into space, NASA and Tesla are not stopping there. They want even more, they want to see what lies beyond this solar neighbourhood. The two companies have banded to form a search team, attempting to survey the environment outside our current solar system. Their aim is to find other such systems, with possible habitable planets. In pursuit of this objective, a SpaceX Falcon 9 rocket will be launching from Cape Canaveral Air Force Station, equipped with NASA’s $337 million Transiting Exoplanet Survey Satellite, or TESS for short. The somewhat small TESS module is decked out with four ultrasensitive cameras, developed by MIT and will be able to spot even the tiniest dips in light whenever a planet crosses its host star, an event otherwise known as a transit. The mission is estimated to take around two years, and strive to survey the entire sky, expecting to find somewhere around 20,000 exoplanets, some of which might be even closer than what the Kepler satellite saw, with various properties – from gas giants, diamond planets or possible even Earth-like habitable planets. Jeff Volosin, the mission’s project manager from NASA’s Goddard Space Flight Center in Maryland, stated that “the mission will produce a huge catalog of exoplanets with the hope that someday in the next decades we’ll be able to identify the potential for life to exist outside the solar system.” In addition to this, this mission represents a transition phase for SpaceX, as it is attempting to build the perfect booster – one that can fly, be recovered and then fly again multiple times without a lot of refurbishment.
> Coworking spaces – maximizing entrepreneurship Designers and content creato rs alike have creative hubs, where they can join and share ideas, in order to further their projects. Athletes and sports enthusiasts have sports clubs & gyms, where they might share tips and tricks to maximize one’s performance. Who else might benefit from such spaces? One simple answer is the entrepreneur. Nick Devane, CEO of PilotWorks, a coworking space and commercial kitchen rental company that caters to food entrepreneurs and startups, believes there are several reasons why entrepreneurs should consider joining coworking spaces when trying to come up with the next big thing in business.
Community building Arguably, one of the most obvious positive sides of coworking spaces is that they bring together an entire community of entrepreneurs – suddenly, you are not alone, in the dark any longer, but are surrounded by like-minded individuals who all wish to share practices, knowledge and feedback, in the hopes of finding something useful for their own business.
Mentorship Going hand in hand with the aforementioned point, Nick Devane argues that finding a mentor or mentors is one of the single best things you can do. Mentors are individuals that have long treaded upon the path that you’re now only starting to walk. They can give very useful bits of information – what to avoid investing in, what to double down on, when it is right to do so, how to nurture customer loyalty and so on.
Reduced costs Most coworking spaces are usually designed with certain areas of expertise in mind and thus tend to be built in certain environments and decked out with specific tools that enable an entrepreneur’s creative vision, such as Nick Devane’s, which caters to food industry entrepreneurs. Therefore, taking advantage of infrastructure opportunities like a coworking space is key to reducing costs early on. It’s not easy when you’re first starting out as an entrepreneur, but if you pay attention, you’ll find that there are numerous methods nowadays in which you can successfully start up a new venture, and multiple sources of information to help you along the way. 8
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NEWS
> HSBC’s looking to expand in China and reduce bureaucracy
> CityStasher – Disruptive Businesses and Storage Spaces
HSBC Bank, one of the largest banking and financial services organizations in the world, is looking to reduce bureaucracy and strengthen its investment in China’s southern region, so that it can spill over into the rest of the country.
CityStasher is a startup founded by Matt Majewski, Anthony Collias and Jacob Wedderburn-Day, after realizing that although the demand for storage from travellers had increased, the number of left-luggage facilities had declined.
HSBC’s newly appointed duo managers, Mark Tucker – the organization’s first externally appointed Group Chairman, and John Flint – its new Chief Executive, mentioned in a presentation to a group of investors & analysts that they wish to cut off some of the bank’s bloated governance structure, in order to increase efficiency. Tucker has already started on this project, having brought down the lender’s board from 20 to 14, since his October instatement. He further noted that other committees and processes are to be slashed, in order to streamline the bank’s activities.
Their initial market research revealed what they already suspected, that no one was innovating in the storage space and that there was nothing on offer for just dropping stuff off for a short time.
In contrast to the not-so-rosy news, Flint stated that they will have to double down on the pivot towards Asia and China in particular, as per the bank’s initial plan back in 2015. Three years ago, HSBC wanted to hire 4,000 more employees and build a “gateway” to China, by investing in the Pearl River Delta. However, the presentation showed those present that the bank’s profits in 2017 fell by 7% compared to a year earlier, in China’s mainland retail banking sector. This is in part due to Chinese regulations which set forth that customers have to visit a bank’s branch in order to open an account, which is stifling HSBC’s potential profit gain since it only holds 227 outlets in mainland China, versus the thousands that all of the local banks have. The bank’s new management team is betting heavily on the country’s economic growth which has only been going upwards in recent years, as a potential source of net gains, given that low global interest rates, restructuring costs and ever-increasing regulation have not helped its return figures.
This situation came about because the facilities that existed were expensive and travelers didn’t want to pay £6 an hour per bag, as is the case when relying on the services of such companies as the Excess Baggage Company. By comparison, CityStasher charges customers £4 to store a bag for up to three hours, and £6 for between three and 24 hours, plus £5 for each additional 24 hours. In the beginning, gaining trust was hard and securing insurance even harder for the startup team. “The obvious challenge with this business is people might question how safe it is,” says WedderburnDay. With a little luck and hard work they succeeded to gain both trust and insurance and until now there have been no claims or issues with luggage contents. What is more, the co-founders have ambitious plans to scale CityStasher in the coming months. The team is investigating possibilities for a second wave of investment and are hoping to get £750,000 by the autumn. With this kind of money they intend to launch CityStasher in Europe, to develop an app and to trial a new service meant to move bags around London. According to Majewski, their goal is to be established enough to help with all requests, “You know that feeling you get when it’s late, you book an Uber because you’re desperate to get home, and it’s such a relief to have that on hand? We want to provide a similar feeling.”
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COVER EVENTS STORY
STORYTELLING WITH KPIS KPIS THAT GO BEYOND INSIGHTS BY DELIVERING IMPACT ERIC PETERSON
F
rom the beginning of time, humans have told stories. Why? Because they are easily relatable. Stories help us to easily understand complex situations in ways that are engaging. How good is your business at communicating its story? And how are you communicating your performance management story? Today, more than ever, organizations use KPIs and dashboards to visualize what is happening— at a point in time. They don't tell a story. A story has a storyline. Something happens in a good story. A story in interesting and captures the viewer's attention. In business, a number or a traffic light cannot tell a story. A good story would communicate what is happening now, what has happened in the past, why it is happening, what is being done to improve it, what should be done, who is responsible, why it is important, what is impacted by it, and so on. This involves much more than displaying data and status indicators. What constitutes a good KPI story? To begin with, users need to understand the context. If this were a movie, this would be the
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background story, or the set-up, where the story is introduced to the viewer.
Necessary elements:
▶▶ What exactly does the KPI measure? ▶▶ Where does the data come from? ▶▶ What is the reporting period? ▶▶ What business unit is being measured? ▶▶ Who is responsible, and who are additional stakeholders? ▶▶ What are the rules that defined red, amber, green status? ▶▶ What is the purpose of the KPI? ▶▶ What domain, goal, or objective does it belong to?
COVER STORY
Understanding the context is only the beginning. A good KPI framework should offer more than simply reporting results and statuses. It should deliver business outcomes, or impacts. This involves a dynamic set of management processes aimed at improving performance, improving quality, using resources effectively, reducing risk, and sometimes, simply maintaining the status quo in a world of business change.
Delivering business impact
Business impact is about going beyond the reporting of results. It is about creating a roadmap, or a storyline, for reaching targets, goals, and objectives. It requires the ability to identify what needs to be done, where, by whom, and at what cost. To be effective, the plan for success needs to be continually re-evaluated and adjusted to ensure goals will be me. Like a good story, it will probably have its ups and downs, and maybe a few unexpected plot twists. Telling the story to achieve business impact requires tools to support management in the following areas:
Evidence and analytics
▶▶ Analytics to identify root causes, problem areas, exceptions, outliers, and baselines ▶▶ Data visualization of performance history to analyze and identify trends ▶▶ Benchmarking to establish and create a culture of shared learning and best practices
Process support
▶▶ Ability to link financial data and resources to the overall reporting system ▶▶ Ability to link other performance management models, such as risk, compliance, project management, quality improvement, employee performance, or others ▶▶ Management support, to evaluate whether resources are used effectively to drive performance ▶▶ Monthly, quarterly, and annual reports that link information from different domains
Technology enablers
Businesses have many challenges with simply reporting and visualizing KPIs. Telling the whole story introduces even more challenges to connect all the pieces. Most organizations use technology to assist them. There are many tools available to help, and they can generally be categorized as follows: spreadsheets and dashboards, purpose-built KPI solutions, and next-generation business dashboards. While some of these can deliver basic KPIs to the business, they often fall short of telling the whole story and delivering business impact. This article describes the fundamental problems inherent with common KPI tools, while exploring how storytelling and technology can be effectively combined to deliver business impact using business dashboards.
Spreadsheets and dashboards
▶▶ Checklists to promote accountability and compliance with policies and procedures
Spreadsheets are an obvious starting point for tracking KPIs. They are quick and easy to set up. Dashboards follow closely behind. They are already widely used in business for data analytics. Both provide rich environments for analyzing data, and many include built-in KPI 'objects.'
▶▶ Evaluative commentary to narrate causes or performance issues, recommend actions, or provide additional details that go beyond the data
While these can be good starting points, it is often problematic to deliver KPIs using spreadsheets and dashboards. For either, KPIs typically exist only as rows in tables, or as tiles.
▶▶ Prioritization tools to optimize time and resources used to achieve goals and targets
Neither is well-suited for providing additional business context, or for linking results to objectives, goals, teams, groups, projects, risks, or other business contexts. Neither is designed to capture elements aimed at improving performance, such as plans, initiatives, or activities. Neither offers navigation. Access control, if it exists at all, is typically at the data level, which often does not fit the needs of the business. Workflow usually is handled outside the system, if it is even supported at all. These types of tools are designed to provide insight through analytics. They are not designed to be management solutions.
▶▶ Tools to track improvement initiatives and activities
▶▶ Forms and manual data, to fill gaps in data warehouse sources ▶▶ Approvals, alerts, and notifications, to streamline established processes ▶▶ Daily task management, to provide focus for end-users ▶▶ Access control, to ensure compliance with IT policies
Business support
▶▶ Flexible business modeling, to supply context and to organize to the performance management framework so it is understandable and easy to find
Purpose-built KPI solutions
There are many types of KPI solutions on the market. These are generally web-based solutions where users can navigate through different business units, reporting periods, and KPIs organized in scorecard or dashboard pages. Many are general solutions that meet basic needs beyond what spreadsheets or data dashboards MAY 2018 11
COVER STORY
offer, but they often lack the ability to analyze source data. This makes it difficult to understand the results. Since they lack built-in analytics, companies need to provide evidence for the results using spreadsheets or reports from other systems. This often results an unnecessary manual effort to support what should be an automated, self-contained set of management processes. They often also lack reach into other performance management domains, such as risk or projects. A proper KPI solution should identify performance areas that need improvement, highlight initiatives or activities intended to improve performance, and evaluate the effectiveness of these activities over time—all while managing the costs and resources as they are used. This is where business dashboards enter the picture.
Business dashboards
The new breed of management dashboard is called a business dashboard. These dashboards combine the general benefits of purpose-built KPI solutions with the benefits delivered by data dashboards—and they can model other performance management domains. These dashboards provide the overall business context, all the key elements for story-telling, and the tools to offer detailed data analysis when needed. The key components of impact-driven business dashboards are as follows: ▶▶ Data— evidence for decision-making, both qualitative and qualitative (text and numerical) ▶▶ Business intelligence and analytics—data exploration, discovery, and visualization: to identify performance drivers ▶▶ Business processes- setting things into action, ensuring business impact, holding employees accountable: business rules, workflow, exceptions, and processes ▶▶ Corporate Performance Management— orchestration and storytelling: the purpose and framework (business model throughout the entire organization, at strategic, tactical, and operational levels) Business dashboards are complete management solutions and offer many additional features that go beyond purpose-built KPI
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solutions. They can also model additional management disciplines, such as GRC (governance, risk and compliance), project portfolio management, quality improvement frameworks, enterprise risk management, employee management, and others. Elements from these disciplines can be linked together, such as projects that improve performance, and risks that impact the projects, who is accountable, associated timelines, etc.
Summary
Do your KPIs tell a story? Or are they part of a reporting system that you use? Can your employees follow your KPI storylines? Or is everything behind your KPIs an indecipherable mess? Do you have the right tools to support you in telling a good story through KPIs? A good business dashboard solution can support you in clearly telling the entire story by offering the tools and features that business users need to deliver business impact. It can greatly reduce the time spent manually capturing the story from multiple systems and business units. Analytics and reporting tools are not enough to manage businesses. If you have already invested in an analytics platform, a good business dashboard enables you to embed existing analytics visualizations, while providing the additional navigation, context, and process support necessary to deliver results.
About the author
Eric Peterson is the innovation manager at Corporater, a software company that offers its Business Management Platform to enable organizations of all types to analyze, plan, and execute to deliver business results. As a performance management specialist, he has worked throughout the world with customers, both as a solutions specialist and as a consultant. He brings 12 years of experience in KPI and performance management best practices in a wide variety of industries, ranging from federal government agencies, oil and gas, and high-tech manufacturing. Eric has spoken at many industry events and written numerous white papers and articles on performance management topics that combine technology with business to solve real world challenges. He can be contacted directly at peterson@corporater.com
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INTERVIEWS
EVENTS INTERVIEWS
Carmine Bianchi Professor in Business & Public Management, University of Palermo, Italy
Christopher Mills International performance management specialist, Singapore
Frank Hajdinjak CEO, E.ON România, Romania
Carmen Cucul EUCAN Business Partner, Customer Experience Strategy, Takeda Pharmaceuticals International AG, Switzerland
Amir Orad CEO, Sisense
14 MAY 2018
INTERVIEWS
Phenomena are not static, they change over time. If we’re not able to perceive even the weakest signs of change and correct them, promptly identifying opportunities, we might end up facing bigger crises down the line at some point.
CARMINE BIANCHI
Academic Carmine Bianchi
Professor in Business & Public Management, University of Palermo, Italy In 2018, the Performance Magazine editorial team interviewed Carmine Bianchi, Professor in Business & Public Management at the University of Palermo, Italy. His thoughts and views on Performance Management are presented in detail below.
TRENDS Which were the key trends in Performance Management, from your point of view, as seen in 2017? Key trends in my opinion are towards the possibility of embracing Performance Management (PM) inter-organizational aspects, inter-agency aspects. The chance to support governance through performance management. This is not only typical of the public sector. When talking about governance, we talk about policy design. When discussing about performance management, nominally, we mainly discuss policy implementation in any kind of organization, not only those in the public sector. The issue is that the level of complexity and unpredictability of phenomena in a community, and even in the world more broadly speaking, is becoming so high that focusing PM on policy implementation alone runs the risk of a number of problems which are difficult to frame. If we address PM only in the form of policy implementation, this might give rise to a
myopic use of performance management, with issues such as lack of coordination quickly becoming a reality. This runs counter to everything that PM stands for, because its role is precisely to streamline any coordination process. I can explain this by referring to my previous point, about unpredictability, on the topic of communities. For example, youth disengagement, poverty, crime – these are just some examples of issues that happen both at a local level, as well as on a much higher scene, such as the European one. Now if we bring businesses in the mix, whether they’re small or bigger ones, we’ll notice that without proper collaboration or coordination between themselves and the community they are part of, crises start to emerge. If we have coordination between these two, then the possibility of having sound, robust policies becomes a more vivid reality. Thus, the socio-economic development of a community is possible if you try to establish big outcomes at the community level. Outcome-based performance management is not a new topic in itself; it is however relatively new for the field. Traditionally, this has been an instrument that was used only from an organizational point of view. For example, a municipality that wants to embrace its own performance measurement and management system with more outcomebased variables, may try to understand what kind of outcomes may be achieved in each of its departments. This is an approach that goes from the “inside out”. However, particularly when dealing with community-wide issues and being ahead of the issues in an organization which can play the part of a key actor for changing
performance, maybe even political performance in a community, by affecting more deeply the performance of smaller organizations, like SMEs, one has to take note of how the community – through its various actors – can bring change from the “outside in”, through collaboration. So let’s take an example I mentioned earlier: crime. Preventing/reducing city crime is a problem that is not generally addressed through a holistic perspective, ergo through collaborative governance. The police have their own output measurements, generally separate from the context, while other community stakeholders (e.g. schools, judicial and penitentiary system) have their own output measurements. Very rarely do we ever see they converge. What could be done to reduce crime is bring together all the involved actors – the police, local community, NGOs, the judicial courts, with the help of a facilitator, and map out shared goals, shared targets. This way, we could develop great synergy between all the action plans, which would make the implementation of policies really sustainable in the long run. The big change in the gradual change that I envision here is an emphasis on the rising need to address big community issues, through outcome-based performance management, by combining inside perspectives with outside ones. This way we may sketch a bridge by using Dynamic Performance Management (DPM), which tries to understand the effect of delays between causes and effects, and how the end-results are affected by performance drivers, and such drivers are affected by strategic resources. This kind of performance management approach may just become the lever necessary to link policy design with policy implementation. MAY 2018 15
INTERVIEWS
Measuring performance is important, of course, but if you do not communicate what you’re measuring or the results you’ve obtained, or if you do not work together (collaborate) to understand what is causing underperformance, all your measurement does not serve much purpose.
Policy design is an area within the public sector that generally concerns political scientists, so there is no real PM approach there, while policy implementation is essentially performance management. As we can see, there’s a disconnect there, which in my opinion is the primary cause of the problems mentioned before. If we can build a bridge between the two, I believe we can foster strategic learning, communication, higher awareness regarding causes and effects, and a dynamic view of any issues we may encounter. Phenomena are not static, they change over time. If we’re not able to perceive even the weakest signs of change and correct them, promptly identifying opportunities, we might end up facing bigger crises down the line at some point. Most of the crises that we face nowadays are a result of this type of oversight. What are your thoughts on the integration of Performance Management at organizational, departmental and employee level? There is much more work to be done here. One can find quite a few disconnections at the strategic and corporate level, and in how performance measurements are outlined in terms of operational targets. As an example, in some of the organizations where a culture of PM was introduced, some individuals tried to revert that perspective to one focused more on the kind of link you’ve mentioned. In my opinion, this type of link may map the relationship between these levels erroneously, especially regarding how individual performance is modeled. In order for someone to understand 16 MAY 2018
individual performance, you have to see how an individual is expected to achieve performance on his/her individual results, within the group level, and then within his entire department’s level, finally measuring it against the overall company level. This is essentially an analytic or bottom-up approach. Bottom-up is fantastic when you consider the identification of goals, since you involve your collaborators. But when you – as a department head – want to identify targets, together with the corporate level, it is important to use PM as a vehicle that starts from corporate goals and then gradually cascades these goals to the departmental, group and individual levels. This is what I call a synthetic or top-down approach. This approach fosters coordination. I remember the reaction of certain employees who believed that their boss was “stealing” their own targets, because they perceived the process of identifying the department’s operational plan was just a simplistic sum of individual targets. It completely eschews coordination, collaboration and communication. Measuring performance is important, of course, but if you do not communicate what you’re measuring or the results you’ve obtained, or if you do not work together (collaborate) to understand what is causing underperformance, all your measurement does not serve much purpose. So, this is why I believe we need more dynamic version of performance management when it comes to this link, because it enables a series of elements: ▶▶ coordination – at the horizontal and vertical level
▶▶ motivation – this is nothing new, but remember – it’s one thing to simply mention something, and it is an entirely different element to connect motivation systems with PM. If departmental targets are built by aggregating individual targets in a bottom-up fashion, we will not have any coordination or orientation towards motivation. ▶▶ communication – through PM, we have the possibility to sketch action plans at the departmental level, and to link these three layers. From my experience, in the public sector, the risk is that PM when it comes to this question, is conceived as a mechanistic way of linking performance measurement and management to career advancement and rewards. I have a few clear examples in my mind of PM misuse, whereby its core idea, that of management and measurement, was focused on performance evaluation at the individual level, by completely forgetting why performance management was needed in the first place. This is somewhat differently framed in the private sector. Here I particularly refer to SMEs. These companies should use lighter, leaner DPM systems, which help entrepreneurs to better understand the system, better motivate their internal collaborators, and to better coordinate their organization so that it fares well against the other players in the market. So, a greater degree of flexibility and a heightened capability to detect delays and their effects, the so-called “intangibles”, which are elements that usually eschew traditional performance measurements.
INTERVIEWS
I believe performance management should embody more systems-oriented methods. When I say systems-oriented, I mean system dynamics as a methodology. I don’t ascribe to predictive methods, or predictive simulation modelling.
Intangibles are strategic resources like the organizational climate, the feeling of belonging to the group, employee burnout or any intangibles related to how customers perceive the company’s performance. These have to be taken into consideration more often by both the private and public sector, because they generally provide the source of important drivers behind organizational end-results. Which will be the major changes in managing performance, in the future? As I mentioned before, what I believe is that performance management should embody more systems-oriented methods. When I say systems-oriented, I mean system dynamics as a methodology. I don’t ascribe to predictive methods, or predictive simulation modelling – I’d much prefer tools and approaches that would bring together players from both the inside and outside of an organization. They could be managers within the organization, or various policy makers from the outside, which would promote coordination at both the horizontal and vertical levels. Now this cannot be achieved simply by willing it, we need a robust method, a systemic approach. That’s why I believe it is fundamental to have a facilitator who can enhance strategic planning and implementation, on top of having a robust method, like DPM. To better explain DPM, as I feel I did not do it justice in my previous answer, this is a blend between performance management and systems dynamics modelling. There are examples of approaches in traditional PM that go towards this concept, like the Balanced Scorecard. This tool, as we all
should know, made great strides in the world of business, where it showed that PM is not simply a matter of finance, nor a static issue. Now, where the BSC starts to falter I would say, is PM framed through it has a number of defects, which are arguably due to the fact that the platform is relatively rigid, prescriptive or axiomatic, if you will, as well as being quite corporate-centric, and in best case scenarios, the aforementioned bridging goes inside-out. Furthermore, it is dynamic only to some extent. There is a lack of focus on the dynamics of strategic resources that would affect performance drivers through decisions, policies and implementation thereof. Thus, DPM may offer good support to the BSC and traditional PM, while at the same time removing some of the barriers that prevent higher results from being achieved, which the BSC might have placed unintentionally. By combining these two, we can map the performance of a community. Imagine a municipality where you have say lack of trust in government or sliding quality of life, which are big aspects to measure, with big related outcomes if we wish to increase performance. One way you can go about doing things is by starting with strategic planning, which is not primarily focused on a single organization, but on the community. You deal with the community’s issues through the same approach used for single organizations – which in this case is DPM, to model outcomes for the above-mentioned issues, after which you identify the outcomes at the intermediate level, the outputs at the community level, and then the drivers, as well as the strategic resources.
Following this, you bring together all the involved parties, and through collaboration, you team up the public sector with the private one, along with the non-profit sector. In doing so, I believe you can achieve much better results in combating community issues like obesity or alcoholism, which cannot usually be properly solved by one party alone.
RESEARCH What aspects of Performance Management should be explored more through research? First aspect is associated with delays and causality behind financial measures. Performance is not only a matter of financials, but paradoxically there is still excess focus placed on financials, in my opinion. Whenever there’s an effort to identify nonfinancial measures, it’s often mainly done through a statistical approach, which is not how I believe it should be done. Dynamic Performance Management (DPM) is not statistics. Statistics can support the acquisition of data, but having such data does not guarantee we will have a proper interpretation of it. A PM system should be oriented in such a way that from an organizational perspective, the end results should be measured in a flexible way, according to their proper points of view and with a focus on the performance drivers, as well as the strategic resources. This will make it so that PM is not used in a mechanistic, static way, but rather a learningoriented, strategic way. When I say strategy here, I don’t mean long term results only, but rather linking short with long-term objectives. A second aspect is having more empirical research of collaborative MAY 2018 17
INTERVIEWS
The world today is quite unpredictable, therefore we need clearer lenses, allowing multiple points of view on an issue.
governance. This has already been defined by researchers as “performance governance”, and is an open, constantly-evolving field of study. We need to unite various actors here, from all sectors, to compile data and information and see what common practices seem to be a good general practice and which ones are highly individualized. Which organizations would you recommend be looked at, due to their particular approach to managing performance, and their subsequent results? This is quite a difficult question to answer. However, I do believe that when it comes to research rigor and performance, one of the best models for any organization to follow is the OECD. Their report, Systems Approaches to Public Sector Challenges, shows that they understand the systems approach very well and I highly recommend any educationfocused organization to take a look at the way the OECD conducts its research. Another organization whose performance model is quite interesting is the Municipal Administration of Reykjavik, in Iceland. There is a video, on the topic of alcoholism and its abuse in the country, by teenagers. Around 4-5 years ago, about 40% of teenagers were addicted to alcohol. This was no good news in any way, so how they wanted to change this trend by collaborating with various institutions & groups, and established targets for each and every one of them in part, to solve this issue. They even decided to involve parents and entire families, by allowing them to sign a paper according to which they consented to individually be part of those targets.
18 MAY 2018
Which of the existing trends, topics or particular aspects within Performance Management have lost their relevance and/ or importance, from your point of view? I don’t think there are any aspects that have lost their importance in any particular way, so I’d say none. However, from my previous answers, if we talk about relative importance – meaning in some cases it is very important, while in others not so much, I’d say financial performance, is somewhat less important from a relative importance point of view. To be clear here, it is still very important, because if you operate under losses, you are not sustainable. Nonetheless, if you see losses and only tunnel on financial measures, you are most definitely missing the point and will probably never solve the issues plaguing you. Again, in terms of relative importance, the same would be true for individual performance measurement. Using performance measurement for evaluating bonuses, salaries, career advancement is fine, as these are objective criteria. However, without proper vision on the issue of why individual A or B is underperforming, by looking at the entire context, you’ll never be able to understand what’s truly happening there. Basically, the traditional way of focusing primarily on an issue as a cause in and of itself was possible – emphasis on the past tense here, in the past, when we had simpler problems, predictable issues. The world today is quite unpredictable, therefore we need clearer lenses, allowing multiple points of view on an issue. This goes hand in hand with a final mention I’d like to add here – modelling performance from the inside out is becoming unfeasible. Reality does not give
you grounds to ignore it, while pushing fixes however you think is best. You have to look outwards first, to see the big picture and only then start to think about solutions. Ignoring reality will not get you very far.
PRACTICE Which are main challenges of Performance Management in practice, today? First of all, we need more outcome-based performance measures. These measures would have to be built in the opposite way we’ve been doing them. For the past years, we’ve been looking at issues from the inside, outwards. We need to start focusing on a view from the outside, inwards. This means community and shared goals, with shared responsibilities would be identified at the community level, and then we could more easily see the portion of big outcomes each organization should be responsible for. Secondly, I’d have to say that although performance measurement in general is intended to concern organizational management, in the public sector performance management should be also used to measure political performance. If we think about how we use PM to evaluate managers, the objective of such an evaluation would be related to payment systems, career systems, professional prestige and managerial reputation. Now, although the politician is not part of the professional structure of the traditional organization, PM could help in their evaluation, in measuring public policy performance – how they are designed, with what targets in mind, how are they being implemented and so on. I find it very often that there’s a gap between the performance
INTERVIEWS
A best practice is to have better performance management system designers who understand how collaboration works and just how valuable it is.
being reported and actual performance. This generates a lack of trust in government, which I’ve mentioned earlier is one of the big community issues we’re faced with measuring many times.
Imagine the same thing, but using PM tools and methods that are available to us now. If organizations today use the same line of reasoning, but with the tools we have now, they’ll be able to more and better policies.
What’s more interesting is this can have repercussions on another community issue, which is quality of life – people tend to judge quality of life lower when their confidence in government lowers. This in turn can lead to even worse issues, as some governments might overreact to this news and try to woo back its people through various spending that might lead it into financial underperformance. So in my opinion, although PM is not a universal panacea, it can play a real role here by fixing the heart of the problem and not the effects, because it allows for early detection.
EDUCATION Which aspects of Performance Management should be emphasized during educational programs? Well, this is related to what I mentioned before – dynamic performance management, outcome-based performance management, collaborative governance. On the business side of education, I’d like to see more entrepreneurs trained to look not only into the short-term results to detect symptoms of change within an organization. Moreover, I’d like to see entrepreneurs also working together with multiple players from within the organization, to solve its performance issues.
What should be improved in the use of Performance Management tools and processes? My answer here relates to what I’ve mentioned so far. Having a non-mechanistic way of viewing performance management and measurement, using a DPM approach, knowing how to manage issues that can affect multiple, different organizations. I’d like to now give an example that relates not so much to PM, but more to industrial districts. In Italy, in the 80s, the capability of small organizations to generate value not only inside the organization, but through synergy and collaboration across the supply chain, was quite high because many of them focused on evaluating performance in an all-encompassing way, from numerous points of view, from the internal ones, to the collaborators, consumers and so on.
The designer is the person who tries to glue everything inside the organization and even between different organizations, they are facilitators for all of the plans that go on inside a community, so having such a learned person in the organization is extremely beneficial.
What would you consider as a best practice in Performance Management? My answer here will tie in to the one I’ve given at the previous question, so I will be brief. I believe a best practice is to have better performance management system designers who understand how collaboration works and just how valuable it is, whilst being fully knowledgeable on the best methods of implementing outside-inwards approaches that take into account the entire context of each of the scenarios measured.
An interconnected world requires policy design and implementation be supported by PM, even at the inter-institutional level. What are the limits that prevent practitioners from achieving higher levels of proficiency in Performance Management? I’ll try to synthesize my ideas here, because from my point of view, this can also be solved by taking notes of the ideas I’ve already mentioned. How I see things, there are four levels – individual, group, organizational and inter-organizational. Each of these parties have their own thresholds that affect MAY 2018 19
INTERVIEWS
Systems nowadays are not so similar to systems a few years back, as organizations have changed. So specialists today have to change their views as well, they have to undergo a sort of culture change, to view things from the outside-inwards, as mentioned throughout the interview.
their performance one way or another, for example there could be individual limitations regarding skills, knowledge or habits, such as propensity for collaboration. For example, even the best designed PM system would be a nightmare to implement if people did not collaborate and work together. In my opinion, I’d recommend looking at the organizational status and the inter-organizational one, and see how the individual is expected to perform in that scenario. Again, if say collaboration is very low, then no matter how highly skilled an individual is, he will not be able to become any better because there are forces outside his control that prevent it from happening. His learning is being stifled because of the greater context. The way we can ensure this does not happen is by looking into good or simply put better PM design and implementation, in a way that everything is visible and everything is interconnected.
SPECIALIZATION SPECIFIC QUESTION Academic Point of View: We are developing a database of subjects/degrees in Performance Management. What are your suggestions relevant to the database (i.e. subjects/degrees such as the Masters in Managing Organizational Performance)? My suggestions are towards the possibility of developing academic research & teaching at different levels (Master’s and Ph.D.), on the topic of PM as I talked about it in my previous answers, namely focusing on bridging PM with collaborative governance. Moreover, two other topics of study that I’d recommend are the DPM methodology and 20 MAY 2018
outcome-based DPM. Both of these should receive more attention from the academic world, as these analyze the environment from the outside-inwards, and look to measure performance around this method, by coming up with solutions after looking first at the community, then at what we can do (instead of looking first at what we can do and seeing how this will affect the community). Consultant Point of View: What are the processes and tools you look at, in order to differentiate a successful performance management system, from a superficial one? I’d personally look at how dynamic it is and if it is built around the concept of collaboration. My recommendation would be to appreciate that the longer and more difficult way to solve an issue might be an easier way, as quick fixes could possibly lose sight of important details that may sway a problem one way or another. So as far as I see it as an academic experienced in consultancy, it’s more helpful and efficient to use a more contextualized view when appreciating systems in this manner, and this kind of information should be used by both consultants and practitioners in the field. Systems nowadays are not so similar to systems a few years back, as organizations have changed. So specialists today have to change their views as well, they have to undergo a sort of culture change, to view things from the outside-inwards, as mentioned throughout the interview. They have to look at the entire system, and go from a general view to a more detailed one, as this will allow them to look at the context and make changes based on what they see is needed.
INTERVIEWS
I believe that the future lies in employees managing their own performance. PM will become ‘employee centric’ and employees will become de facto project managers.
CHRISTOPHER MILLS
Consultant Christopher Mills
International performance management specialist, United Kingdom After nine years as a lecturer at the National University of Singapore, Chris became a managing consultant with a global US talent management organization in the 90s. He then ran his own consultancy for 12 years in Asia and the Middle East working with over 100 companies in measuring and managing performance. He has written four books on performance management, his latest being, Performance Management, ‘A Practical Guide’., available on Amazon. Chris now consults internationally from a home base in the UK.
TRENDS Which were the key trends in Performance Management, from your point of view, as seen in 2017? There have been a number of trends in PM recently, some highlighted in the media through articles and surveys and others as a result of HR staff trying to overcome challenges they face in the workplace. Some of these may seem a fashion whilst others may be a real shift in direction. I am just going to focus on four areas although there are others. Here goes: A. Annual performance reviews will continue to fall out in favour of continuous performance management This statement keeps coming up so there are a number of issues to clarify.
Annual appraisal versus continuous review? If you are in a sales organization you will be giving and receiving feedback with staff on a daily basis, and this will have been the norm since day one. Any organization that is now looking at continuous, say quarterly reviews are doing so because they have an outdated PA, not even PM, system with a once a year review in place and they are just catching up after upgrading their performance system. Are companies seriously taking away the end of year, end of project review? It’s hard to believe because this impacts other HR, talent management systems where there is a need to make decisions to differentiate performance for budgeting, reward, recognition, training and development, promotion and, yes, termination. Without the appraisal as the recent*CEB survey said it leaves a vacuum or a void and decisions become based on random choice or personal whim, rather than any reason or system. However, if HR wants to avoid the stigma of an end of year Appraisal, if there is one, then you could just call it another continuous review meeting. HR, though will be still using the data for all those other HR decisions that have to be made at year end. *CEB Global is now Gartner. B. Personal development will become as important as performance goals Personal development has always been important for global and shall we savvy organizations or even countries. Why, for example, do countries like Singapore spend so much money in upgrading the workforce and subsidizing companies to
follow suit? It’s because how a person works and the skills they have impacts what a person achieves. Results impact GDP, personal wealth and self-esteem making everyone feel good. It’s the same reason businesses focus more on personal development. It also helps organizations with engagement, retention, promotion, succession planning and attraction. C. Employee autonomy will become a huge advantage Yes, I believe that the future lies in employees managing their own performance. PM will become ‘employee centric’ and employees will become de facto project managers. However, initially when setting goals, one will still have to be in-line with department and thus organizational strategy. It’s just that employees, once they understand the PM system, should be able to bring a first draft of KPIs, within an agreed framework, to their boss and discuss and gain agreement and likewise agree how they will demonstrate values or agreed competencies. Then the employee tracks their own performance, collects data using accepted tracking devices and presents real time data to update the supervisor on a regular basis. At the end of the project or financial year the employee again discusses all expected outcomes and presents data to confirm results obtained. I know this is a plug but my latest book focuses a lot on this concept. D. Use of ‘traditional’ performance ratings will decline further I am in agreement re overall ratings but feel individual ratings still have value. MAY 2018 21
INTERVIEWS
The difficulty I have found with some organizations is that culturally the overall rating has become so ingrained that the focus is more on designing the perfect overall rating system.
Let’s take individual ratings first.
for their HR reports and decision making.
Why do we set KPIs? Because the organization’s strategy to achieve certain results deems it fit to do so.
What are your thoughts on the integration of Performance Management at organizational, departmental and employee level?
Why do we have individual ratings e.g. does not meet, achieves and exceeds? Because this sets standards of achievement and gauges the level of accomplishment. Without having a gold, silver and bronze in the Olympics there is no challenge for athletes and likewise at work no incentive for an employee and also perceived no retribution too. The outcome is that the goals may not be achieved and business fails. Now, let’s consider overall ratings. Why do we have them in the first place? To differentiate performance for recognition & promotion etc and for most organizations to determine or contribute to a possible bonus. The problem is that employees know this, especially on the reward aspect and so often negotiate for higher ratings. Managers do not like to play the bad guy, want to keep their best staff and some may ‘adjust’ ratings, if they can. My own experience has been that at the end of my appraisal, with a US consulting organization, we never discussed overall ratings but focused on summarizing what went well and identified learning points for the next year. I was perfectly happy with this approach. The difficulty I have found with some organizations is that culturally the overall rating has become so ingrained that the focus is more on designing the perfect overall rating system. In summary, I would always keep the individual ratings but consider taking out the overall ratings and let HR use the data 22 MAY 2018
Strategic direction whether created through, for example, a vision, values and critical success factor approach or a balanced scorecard can be linked seamlessly to department and individual accountability. Do organizations with PM do it, though? That’s another question. Surveys and subsequent reports often highlight that employees do not have ‘line of sight’ to the business direction. Which will be the major changes in managing performance, in the future? Employees will manage their own performance in the future. I talked briefly about this at the start of the interview. Let me explain. The boss is not necessarily the subject, product, or role specialist and often bosses just manage or supervise the specialists. In fact, the employee may not have a boss. The employee’s role is changing; talent management has seen to that. Staff members take care of a portfolio of responsibilities What is more logical is to introduce the concept that every employee is a ‘project manager’. Staff are thus empowered to manage their own plans throughout the year, providing feedback to their superior, and at appraisal they have to give a presentation comparing results At review time, leave the platform to the employee; it’s their performance plan, and they know what is going on. Let them give a progress report whilst the manager just manages the meeting and asks questions
where necessary. At appraisal it’s not like the old days when an employee takes the flak and listens whilst the boss talks. OK, the appraiser may still have veto, but the appraisee should take centre-stage and make a presentation based on the performance plan that was agreed. A caveat is that from my experience, PM practices are often country and even ethnic specific. However, many empowered organizations’ already utilize such an approach. With increasing cross-cultural fertilization, I believe, employee centric PM practices will become the norm.
RESEARCH What aspects of Performance Management should be explored more through research? Any aspect of research which looks at the criteria of an effective PM system and its impact on results. For example; create a hypothesis linking the impact of an organization’s level of cultural unity vs. performance achievement or compare organizations’ natural or skewed bell curve of employee ratings vs. organizational results. Which organizations would you recommend be looked at, due to their particular approach to managing performance, and their subsequent results? I am not sure I would want to focus on any specific organization because their present situation may not mirror the circumstances that you face. For example, in 2017 everyone is saying they are giving more feedback. Well as mentioned earlier, if you are in a sales
INTERVIEWS
I am not sure I would want to focus on any specific organization because their present situation may not mirror the circumstances that you face.
business your managers are demanding and giving feedback on a daily basis and this may not be appropriate in another organization. However, to answer the question keep an eye on any company that links cultural values to support performance achievement and look at their success in results and employee retention levels. Which of the existing trends, topics or particular aspects within Performance Management have lost their relevance and/ or importance, from your point of view? The last hundred years have seen the waysides of literature littered with discarded approaches in an attempt to find the elixir to managing employee performance. An area that should be abandoned for executives and management is the Trait based system, typical of the 1950s but, unbelievably, still in use today. Traditionally, organizations would (and many still do) focus on assessing the qualities or ‘traits’ of an employee. Typical areas of trait measurement include: ▶▶ ▶▶ ▶▶ ▶▶ ▶▶ ▶▶
Quality of work Quantity of work Conscientious Dependability Energy Loyalty
However, evaluating an employee’s traits as a form of appraising performance may not be acceptable today. Why? Because it is felt that it is better to measure a person’s ability on the job or a person’s competence rather than on their personality and what someone brings to the job.
Perhaps the main reason, though is that the trait approach is not relevant to department/ organizational goal achievement There are also concerns over the ability of the appraiser to measure accurately. i.e. no proof, allowing gut feel and the appraiser being able to play favourites. Incidentally, my experience is that it the trait approach has often been favoured by unions. From this summation the reader should be able to guess why. N.B. Interestingly, measuring a person’s traits is back in fashion now but not for appraisal but when looking for high potential in a candidate, using psychometric assessment.
PRACTICE Which are main challenges of Performance Management in practice, today? Lack of or poor coaching. Coaching is an important role that anyone who supervises others has to undertake. This includes coaching employees to achieve KPIs and targets and to demonstrate values, competencies, and behaviours. This also means giving feedback and this is what organizations are saying they are focusing on in developing PM in 2017. So are managers good coaches, in a word, no. So that could mean that all the new feedback that is given may not be of any value. Based on my research publishing three international and national PM surveys many or even, may I say, most managers are not perceived as good coaches. Coaching skills have always had low ratings in PM surveys. Why is this? Employees are rarely promoted to supervisor status because of their coaching ability.
They will get promoted mainly due to their technical ability, subject knowledge, skill, and motivation, but not for coaching. When do employees learn about coaching? At school? -No. Do they pick up coaching tips during tertiary education? Unlikely. Well, what about during their early years in a job? Usually not. So why doesn’t a person learn coaching skills during these times? This is often because they are too busy filling their brains with knowledge and skills to pass exams and then do the specific work they are paid to do. Except for certain professions which provide coaching courses, such as teaching and sports coaching, there is no ‘school’ to go to for the every-day employee to learn coaching skills. When an employee is promoted to manager and sees the need for the staff to develop certain skills or to do something better, what does the manager do? Often the boss tells them what is required, or sends them on a course, does it themselves or just hopes the person will improve. So, if managers are not good coaches and coaching is an important part of achieving PM goals how should organizations try and remedy this? Firstly, conduct a coaching survey to see if this is an issue. If so then conduct focus groups to drill down to find out specific problems and get recommendations how and when coaching should be given. Next have the training department devise and facilitate skill based coaching training related to different scenarios in PM where coaching/ feedback is required. The training should be in small groups for maximum effectiveness. Then set a KPI for managers to improve their percentage point on coaching skills at the next quarterly/ half yearly coaching survey.
MAY 2018 23
INTERVIEWS
At present the only ‘best practice’ way that is acceptable proof as a competency tracking device* is the S/TAR concept, the updated version of the critical incident technique
What should be improved in the use of Performance Management tools and processes? Training. I just mentioned it to do with managers inability to coach effectively. Without in depth training performance management briefings to staff may be a waste of time. Otherwise, how can one expect consistency of understanding of the purpose and processes, application and calibration across departments? Briefings only provide information and knowledge., However, ongoing just in-time, skill-based training in all aspects of the PM system is essential. Each workshop should be based on the concept of behaviour modelling, combining short lectures with examples on key content, video demonstration, exercises, and skill-based practice with feedback using relevant case studies. What would you consider as a best practice in Performance Management? Firstly, let’s understand that a best practice can be perceived as a method or technique that has consistently shown results superior to those achieved with other means, and has been repeatedly practiced and become a yardstick. In performance management best practices are likely to fall into at least the following categories: Strategy & linkage to PM, system design, the planning process, tracking of outputs and competency demonstration, performance review, coaching, appraisal, PM administration and how PM is linked to talent management/ HR systems. 24 MAY 2018
My best practice refers to ‘rating competencies’. This links to both system design, planning, tracking and appraisal. My best practice is concerned with the extent to which an organization gets its staff to overcome rating a competency by just ticking a rating level in a box. In other words, what is the process used by the organization to gain agreement between appraiser and appraisee on the rating level for demonstration of a particular competency. Now this is where most organizations’ have issues. How can we rate skill or competence without using intuition? Then how do we standardize our managers evaluation so that we avoid lenient and harsh raters? Also, who is tracking competency demonstration, the manager or the subordinate? At appraisal it may be difficult to recall sample behaviours displayed and thus ratings become a gut feel decision. In the end there is a high possibility of rating error unless there is an agreed accurate measurement method. It is not that competencies are not acceptable but rather than how many competencies can someone be responsible to measure? (the most I have seen on an appraisal form is twenty-four). This is a design issue. Competencies took over from the trait based format in the 1980s. This was replaced with the hybrid system using a grid format comprising KPIs and a set of competencies. Many companies’ then developed role or level specific behavioural and functional competencies. As a result, the PM form became unwieldy and difficult to measure with so many competencies and behaviours. However, the hybrid ‘PM’ approach may be as good as it gets for most organizations but this is not ‘best practice’.
Nevertheless, appraisers generally like it. With competencies, they can just tick a rating level. It may seem rational, logical, and fair, with all key areas covered. However, this approach has a high potential for rating error and focuses more on the person than performance. Also keep in mind that today’s savvy subordinates now expect substantiation of a rating. One cannot simply say, ‘It’s based on my general observations throughout the year.’ One has to have examples. This means tracking of competency demonstration and collecting examples of evidence. At present the only ‘best practice’ way that is acceptable proof as a competency tracking device* is the S/TAR concept, the updated version of the critical incident technique (Flanagan,1954). This approach needs to be self-managed by the employee. This means self-tracking of competency demonstration and self-review, keeping a log of competency S/TAR examples and sharing periodically with the manager (not just the other way around). I was privileged to have worked in such a company where employees tracked competencies using the S/TAR format. The rating system was linked to core competencies demonstrated consistently throughout the year. When I work with organizations I encourage department heads to switch roles and review different departments each month with individuals presenting, in S/TAR format examples of when they have demonstrated values. Appraisal then becomes a breeze because there is a S/TAR log of employee value demonstration. Those who excel at supporting the values can be applauded at a cultural recognition award evening. This
INTERVIEWS
Like it or not but many employees view appraisal as a way to determine a better bonus.
approach drives the culture change. It is just like seeding grass: it spreads if ‘watered’. I have introduced this with organizations to influence culture change and the approach develops high morale, a good work ethic, and low turnover of staff and, of course, supports KPI achievement. However, to ensure staff demonstrate competencies or values needs effort although its easy once you know how. This is my ‘best practice’ and I recommend and introduce it wherever I feel an organization is prepared to overcome competency box-ticking and gain the many benefits from it.
Secondly students need to understand why we have PM in organizations’. This should be explained thus. Primarily, all organizations have a goal of some kind whether profit or non-profit. The organization will need people to fulfill certain functions to achieve the revenue or profit target. So, each person is given a job description of some type with expected outcomes to accomplish. Then the outcomes are reviewed in line with the organizations expectations. As a result, the person may be offered continued employment based on results (or could be asked to leave due to not meeting expectations). It’s all about a performance cycle that is both organizationally and individually results-based.
N.B To overcome competency boxing ticking you need to replace all employee competencies from the appraisal form with the organization’s values (usually 3-5) to support culture change. Then have a separate ‘personal and career development’ meeting whereby there is a review of an employee’s behavioural and functional competencies with a competency development plan being the outcome coupled with a KPI.
What are the limits that prevent practitioners from achieving higher levels of proficiency in Performance Management? The impact of human nature at appraisal time. – what I call ‘the ATM or cash machine Mentality’.
*The other tracking device used is the multi rater 360 approach but this can be an administrative nightmare. However, very useful in high potential assessment as part of an assessment centre.
EDUCATION Which aspects of Performance Management should be emphasized during educational programs? Firstly, student’s need to know that aspects of performance management will be with them throughout their life, and someone somewhere will be measuring them.
We are appraised even before we are born and when we start to make those first tentative steps to walk, also with exam results at school or university, performance expectations at work, on-going feedback from our spouse or partner and even our mortgage advisor or through a doctor’s assessment.
Like it or not but many employees view appraisal as a way to determine a better bonus. They have high expectations and see it as a great way to get more money. At appraisal time, employees fight for higher ratings, sometimes completely irrationally, just because they believe the overall rating is linked to a dollar value. Employees become upset when the rating does not match their feelings of self-esteem, self-worth and their length of service, age, education, or social status. The fact is that many employees may still not have a complete understanding of the system. They may or may not have started MAY 2018 25
INTERVIEWS
I always want to see if the organization completes a bell curve analysis of employee ratings at the end of the financial year. I am looking for a natural distribution of results without use of a forced ranking system.
to use a tracking process to record their demonstration of behavioural and functional competencies. Employees are usually not trained to collect data, so they become frustrated with biased, non-specific feedback. If the system design is flawed and the appraiser senses that gut feel is tolerated, then rater inconsistency and leniency becomes a problem. If the appraisal process is applied inconsistently across departments, rater calibration becomes an issue, and the hope for a natural distribution disappears. A skewed bell curve is the result, and the final insult is for the manager to be told to force-rank the staff. To get back to the ATM mentality which can create all these issues I can recall a very senior manager at a multi-national saying to me when I was re-designing their PM system. ‘Chris, I don’t mind what you do with the system as long as you don’t mess with my bonus’.
PERSONAL PERFORMANCE What is your opinion on the emerging trend of measuring performance outside working hours, during our private time? When I was at school we were give a small diary where every day we had to write down all the key activities that had to be completed. This was called a ‘route list’. This had to be shown to the teacher in-charge of morning roll-call every school day. Nowadays, I use an updated approach with ‘to-do or achieve’ notes on my computer screen. To explain another approach, I recall meeting someone on the streets of Hong Kong who had been at a seminar of mine and we got into conversation. He pulled out from his jacket pocket a piece of paper with his ‘goals’ on it. 26 MAY 2018
This list included to grow his company to 10 million dollars and to pay for his apartment before he was 35 etc. He said he looked at his goal card every morning and evening and visualized achieving his personal KPIs. Subsequently I have read a lot about this approach. I do something similar myself as a result. The repeated habit and visualization are important to make it work as this kindles the constant desire to take action. What personal performance measurement tools do you use (i.e. gadgets that track blood pressure, steps taken, heart rate, burnt calories or tools that help with one’s finances or personal skills)? I am beginning to consider smart home devices with apps controlled via a smart phone.
SPECIALIZATION SPECIFIC POINT OF VIEW Academic Point of View: We are developing a database of subjects/degrees in Performance Management. What are your suggestions relevant to the database (i.e. subjects/degrees such as the Masters in Managing Organizational Performance)? Such post -graduate degrees, often MA or MSc go under names including organizational leadership, organizational management, and industrial psychology. Many of these programmes are designed for working students, and there are also quality online master's in organizational behaviour degrees available for students who need flexible schedules. These are available in the USA, UK, Europe, Australia and some developing countries. Consultant Point of View: What are the processes and tools you look at, in order to differentiate a successful performance management system, from a superficial one? I always want to see if the organization completes a bell curve analysis of employee ratings at the end of the financial year. I am looking for a natural distribution of results without use of a forced ranking system. If there is a forced distribution system in place I want to know why? Usually, it means that the present PM system is not working allowing leniency in rating with a skewed bell curve the result. Accordingly, HR or Finance has then made an executive decision to push the bell curve back to the centre, usually for bonus reasons. Unfortunately, this can affect employee morale, motivation and staff retention.
INTERVIEWS
I think that a successful organization needs employees that clearly understand not only individual and team objectives, but also how they fit in the strategic business objectives, so they can swiftly adjust course as business needs evolve.
FRANK HAJDINJAK Practitioner Frank Hajdinjak
CEO, E.ON România, Romania
TRENDS Which were the key trends in Performance Management, from your point of view, as seen in 2017? For many businesses, last year was marked by an increased effort to put the customer centricity philosophy into practice, as a means to gain competitive advantage. Well, this trend is not new, but in 2017 the rate and the speed of changes determined by it and other factors, like digital transformation, grew significantly. And this impacted the approach and use of performance management. Nowadays, to have visibility and awareness throughout the entire organization on what determines its success is critical. In my opinion, one important trend is changing the focus of PM from individual to teams. Team work and autonomous teams allow organizations to be more agile, to learn and quickly adapt themselves to the fast-changing environment. The performance management cycle is now shorter and it is enhanced by the use of Operational Excellence methodologies, Design Thinking and Agile Way of Working. For instance, we now have performance dialogues on a weekly and monthly basis, depending on the management level. Each discussion is held around KPIs updated in real time, and those related to customers are always a priority. Digital transformation is another major trend I want to point out, as it transforms
industries, markets and our way of living. Many companies are using software platforms to boost the performance management process. We are using the Balanced Scorecard methodology with the support of an EPM platform, which helps us not only to link strategy to operations, but also provides us with the necessary framework for frequent meaningful real-time discussions, immediate feedback, problem detection and actionable insights. Last but not least, it allows our employees to interact, learn from each other, find mentors and solve problems. What are your thoughts on the integration of Performance Management at organizational, departmental and employee level? I think that a successful organization needs employees that clearly understand not only individual and team objectives, but also how they fit in the strategic business objectives, so they can swiftly adjust course as business needs evolve. An integrated PM has a strong motivational dimension, as each employee can see his/ her contribution in achieving company’s objectives, and they are recognized and rewarded accordingly. In our company, the project for implementing the Balanced Scorecard, which is our PM IT tool, is part of the Cultural Change Programs along with Operational Excellence and Customer Experience. In this way we ensure an integrated approach in our business in order to achieve our aim - to be a customer centric, performance driven organization, which relies on leaner and more efficient processes. Why Cultural Change Programs? Because, in the end, it’s about changing the mindset of our employees at all organizational levels – to focus on what our customers expect, to make
our processes as lean as possible in order to be able to deliver on these expectations and last but not least, to track the performance and see where we stand from a larger perspective (customers, employees, cost and processes). All these need to go hand in hand if you want to make a change in the way of working. And let’s face it, no long term profitability can be achieved without employees who have a clear understanding of their role and how they can contribute to the process. Also, by having BSC (Balanced Scorecard) in place, employees benefit from improved transparency, they can learn from each other by sharing best practices among peer teams and also a competition between teams is encouraged. Which will be the major changes in managing performance, in the future? As we can see, business environment constantly changes at a more increasingly speed. Performance Management will accompany these changes, in order to better serve the business needs and the workforce needs as well. It will focus more on enabling better decision making at all levels in an organization in order to create more value at a constant pace. Digital transformation and new technologies will impact the PM more and more, because the organizations need them to help navigate through the complex, volatile and uncertain world, and focus on what is essential to reach their goals. So, in my opinion, the classical PM process will be switched to a more agile approach, which will integrate different methodologies and tools, to help the management of the organization empower teams and employees to become more autonomous in managing and improving their performance. Frequent fact and data MAY 2018 27
INTERVIEWS
In business there is no room for modesty, therefore I believe E.ON has gained its place considering the transformation we are going through, from an utilities’ company to an innovative organization. based discussions, coaching and constant feedback will be at the core of PM. In some organizations these changes have already begun.
RESEARCH What aspects of Performance Management should be explored more through research? The emerging and developing of new technologies, like Blockchain and AI, are already impacting our business environment and will affect future PM development. I believe that this aspect should be explored through research. There is also room for improvement through research for PM practices aiming at developing and strengthening talent teams, as creativity and innovation are essential ingredients of success today and will also be in the future. Considering the trends in PM and the necessity of finding solutions to better manage the performance in the VUCA (volatile, uncertain, complex and ambiguous) world, I think that it is worthwhile to also explore more on how the implementation of a coaching-based performance model into organizations can affect their bottom line.
by the way a company can offer a wow experience to their customers and potential customers. This means that an organization requires a certain level of flexibility and agility to meet the higher and higher expectations of the customers. In this context, I believe that there are some top performers in their domains which changed or adapted the business models in order to offer an outstanding experience for customers and also for their employees. In this regard, I can name: Netflix, Amazon, Zappos, Google or ING for the banking sector, etc. In business there is no room for modesty, therefore I believe E.ON has gained its place considering the transformation we are going through, from an utilities’ company to an innovative organization. Which of the existing trends, topics or particular aspects within Performance Management have lost their relevance and/ or importance, from your point of view?
Enhancing performance management begins with finding an effective way to define and measure organizational-performance metrics, and by using processes that empower people to do their best work.
Overtime, financial performance has been the only management driver and the key topic of all steering discussions and there are still companies managed in this manner. But practice has proved that it is not enough. Employees’ performance, operational processes’ performance and customers’ satisfaction and loyalty should be in focus, as the profit is the result of all business attempts. In fact, companies should balance their efforts to develop on these four perspectives: learning and growth, internal processes, customers and finances.
In today’s customer-centric environment, more likely that performance can be defined
Other element of PM that I think is constantly losing ground is the annual
Which organizations would you recommend be looked at, due to their particular approach to managing performance, and their subsequent results?
28 MAY 2018
individual performance cycle appraisal. This process alone is no longer enough by itself. As I have already mentioned, companies need to become more agile, more sensitive to market changes and this is not possible if employees receive detailed feedback on their performance only once per year. In the current context, even the individual objectives have to be reviewed more frequently, and with the help of constant feedback and coaching, employees’ knowledge level increases and their performance implicitly.
PRACTICE Which are main challenges of Performance Management in practice, today? Normally, Performance Management shares a part of the main challenges of the businesses. I would begin with the need for PM processes to cover all the relevant perspectives of the business, allow flexibility, while ensuring the alignment between strategy and execution. And all of these processes must be correlated with markets’ dynamics. Another challenge we faced was making people understand that performance management system is not designed to punish the low-performers, but on the contrary, provides a tool which helps discovering the areas/ processes where there are problems and need to be reviewed in order to be improved. It is not a tool for top management only, everybody, at all levels shall own their KPIs and performance dialogues. In this respect, the organizational culture is very important, as it is a very powerful enabler, to make people change the way they work and challenge themselves to perform better.
INTERVIEWS
As we become more digital, PM should adapt quicker to this trend using IT tools to collect real-time data, in order to help the steering process.
What should be improved in the use of Performance Management tools and processes? As we become more digital, PM should adapt quicker to this trend using IT tools to collect real-time data, in order to help the steering process. Thus, PM tools need to be connected with the other enterprise management platforms in order to reduce human intervention and time assigned for data processing. Moreover, PM systems should benefit more from the Artificial Intelligence, both for improving customer support and workforce management. As I mentioned, frequent fact and data based discussions to detect and solve problems in due-time, coaching and constant feedback should become a routine in this field. What would you consider as a best practice in Performance Management? When talking about best practices in PM, I am thinking of the process of cascading vision & strategy from top management level to the individual one, in a manner that ensures both employees and managers’ buyin. It provides a good framework and right directions for daily activities. Still, one must make sure it is properly linked with the needs of the organization – if the monitored KPI’s are poorly selected or not relevant, it can easily become an useless exercise. Performance Management, in order to be successfully deployed, must be backed up by a solid culture. In our case, when we introduced Balanced Scorecard, the success factor was that we made sure the organization is prepared for the change. Having Operational Excellence instruments in place (e.g. Performance Boards and
weekly Performance Meetings), it was very easy to transform our organization into a performance driven one, from the frontline to the Top Management. In general, the implementation of Lean methodology (OE) and also implementations of BSC have a success rate of less than 50%. We introduced Lean 5 years ago and Balanced Scorecard 3 years ago. Due to the fact that we successfully made them work together and enable each other, we are now able to further build upon this basis – we work now with Design Thinking methodology, we are currently running an Agile Transformation program, we even set up a new 100% digital supply company, E.ON Flash. They all rely on a strong Performance Management system. More than this, we have introduced in the Balanced Scorecard the 5th perspective, the HSE perspective; because we consider that the safety of our employees has top priority, beyond any business strategy. I know that usually the safety perspective is included in the processes part, but I personally wanted to emphasize the importance of Safety for everyone in E.ON Romania. Your performance management system tells everybody in the company and outside it, which things are really important. If an objective is not outlined there, then clearly it is not that significant for anyone.
EDUCATION Which aspects of Performance Management should be emphasized during educational programs? On educational level, the switch from objective-based performance to value-based performance should be emphasized. We
should learn how to invest our “resources”, not only to “check” activities, but also to create value. It is also important to inoculate the culture of continuous improvement in all life aspects. Even if you have the best KPIs, I think that a very important aspect is how you discuss them with your team, how you communicate the objectives, the targets and the achievements, how you can make everybody contribute if there is a gap in performance. Educating employees to have proper performance dialogues has the same importance as choosing the right KPIs to monitor. I think that another aspect is to make everybody understand that in today’s business environment, it is not about choosing between creativity (with less rules) and numbers (performance management systems, strict analyses and so on). The future belongs to the ones which can have both and can make them enable each other. You need to work with the customer in a creative way if you want to increase profitability. You need to focus your creativity on making those products that your analysis of customer insights tells you that are requested by the market. For example, at E.ON Romania, we train our employees in Design Thinking, to make them more aware how to develop things that are really needed by the market. Numbers can only show you if you go in the direction that you have chosen, but employees need also to be trained to find easily the right objectives and set the proper targets.
MAY 2018 29
INTERVIEWS
Using our performance management system helped us to have the whole picture of the business and to detect both problems and opportunities in due time.
What are the limits that prevent practitioners from achieving higher levels of proficiency in Performance Management? I think that these limits are generated by the current PM systems and practices, leadership styles used and the organizational culture in place. Not having access to relevant research findings and best practices in the field usually hinders the practitioners from achieving higher levels of proficiency in PM. Also at leadership level, we as leaders need to make the step back and empower our employees to own the numbers, to find root causes for problems that are shown by the KPIs, to discuss their performance.
When I have Performance Dialogue at Board level, I try to talk as little as possible, not to give advice or jump to solutions, but ask “why”, challenge solutions, offer support, if needed.
What personal performance measurement tools do you use (i.e. gadgets that track blood pressure, steps taken, heart rate, burnt calories or tools that help with one’s finances or personal skills)?
PERSONAL PERFORMANCE
I am wearing a device for measuring blood pressure, heart beat rate, number of steps made and other similar metrics.
What is your opinion on the emerging trend of measuring performance outside working hours, during our private time? I find that measuring performance during my private time is motivating and it is helping me to take a better care of my health, but I don’t let this rule my life.
SPECIALIZATION SPECIFIC QUESTION Practitioner Point of View: Which were the recent achievements in generating value from performance management in your organization? Our organization operates in a very competitive and complex environment. Using our performance management system helped us to have the whole picture of the business and to detect both problems and opportunities in due time. For instance, by tracking and analyzing what drives our customers’ satisfaction, we were able to find solutions to meet their expectations. One example from our organization is E.ON Flash – our new 100% digital gas and energy supply company. By understanding our customers’ needs for digitalization, information and transparency, we came with a brand new concept of handling energy anytime and from anywhere – without paper work or any ques. As a matter a fact, as a recognition for our innovative processes, E.ON Flash was included in the top of innovative companies in Romania at Energynomics Gala Awards 2017.
30 MAY 2018
INTERVIEWS
While performance management is everyone’s responsibility, I believe a higher onus is on people managers and functional leaders.
CARMEN CUCUL Practitioner Carmen Cucul
EUCAN Business Partner, Customer Experience Strategy, Takeda Pharmaceuticals International AG, Switzerland In 2018, the Performance Magazine editorial team interviewed Carmen Cucul, EUCAN Business Partner, Customer Experience Strategy at Takeda Pharmaceuticals International AG, Switzerland. Her thoughts and views on Performance Management are presented in detail below.
TRENDS Which were the key trends in Performance Management, from your point of view, as seen in 2017? In the pharmaceutical industry in which I activate, there is currently a lot of focus on generating (and measuring) value beyond the pill. This means, for example, creation of patient support programs, where value is being generated through better quality of life for patients, a lower hospitalization rate and/or a higher adherence to treatment. Another trend is competitiveness: larger pharmaceutical companies face competition from smaller/ more specialized biotechs, which are more innovative, faster to market and more tailored to customer needs. On the other hand, smaller pharmacos need to improve their bottom line, given reliance on limited products in the pipeline, fixed costs in commercial operations and higher cost pressure from payors.
Of course, these trends have started before 2017: nothing happens overnight in an industry where the average lifecycle of a product is 10+ years. However, KPIs like patients’ quality of life, faster go to market, generation of real world evidence or leaner internal processes have started to redefine the business model of a pharmaceutical organization. What are your thoughts on the integration of Performance Management at organizational, departmental and employee level? In my view, performance management is about change: organizations should become more competitive in the marketplace, processes should improve versus current standards, and employees should become more productive as effect of a good performance management system. And we all know the fundamental driver of behavior change: financial and nonfinancial incentives. To me, being consistent at all organizational levels about what is being rewarded and what is being discouraged is what makes organizations great (rather than just good). Which will be the major changes in managing performance, in the future? One area that needs further reshaping is how employee performance is being measured and remunerated. Especially as Millennials are now the largest generation in employment, setting objectives which are being measured and rewarded once or twice per year is clearly not going to fly in tomorrow’s corporate world. One study from Harvard Business Review suggests that a third of US organizations have already scrapped formal review processes and replaced them with fluid conversations
about performance. This trend should become mainstream in the near future. Another trend that should materialize sooner rather than later is the agility of performance management systems. In a world which has become volatile, uncertain, complex and ambiguous, defining and measuring performance needs to emerge as an iterative process, rather than a static/ sequential one. More scenario planning, more stage-gating decision making and more qualitative KPIs will be welcomed in Performance Management, in my view.
RESEARCH What aspects of Performance Management should be explored more through research? With Millennials becoming the largest generational group in today’s workforce (at least in the US), and Generation Z coming swiftly after, I think more time should be devoted to research related to generational gaps and aspirations. The younger population is not only making an employee base with different expectations for performance & rewards, but are also consumers with different tastes and criteria to select suppliers of good and services. Which organizations would you recommend be looked at, due to their particular approach to managing performance, and their subsequent results? I like Airbnb for their organizational culture, which makes for a great employer branding (they receive an average of 200+ applications per job posted). This ends up in high employee satisfaction, workforce performance and business growth (the company, founded in 2008, is now valued at 31BN USD). MAY 2018 31
INTERVIEWS
In a world which has become volatile, uncertain, complex and ambiguous, defining and measuring performance needs to emerge as an iterative process, rather than a static/ sequential one. It is more so that I appreciate Airbnb since they could have gone down the route taken by Uber, having had pretty similar origins (born less than a decade ago, Silicon Valley unicorns). While they both face challenges from the powerful industries they disrupt, one company is plagued by corporate culture scandals, while the other one is not. From a financial management perspective, there are several case studies talking about Johnson & Johnson’s five-cycles budgeting process. While a bit complex (seen from inside the organization) the practice allows for multiple iterations of the financial forecasting in order to speed up adaptation to short-term market conditions. J&J is a constant high performing pharmaceutical company, with 55 consecutive years of dividend increases. Which of the existing trends, topics or particular aspects within Performance Management have lost their relevance and/or importance, from your point of view? Most industries today face increased volatile, uncertain, complex and ambiguous market situations. In such environments, anything that is planned and measured sequentially (such as year-end performance reviews, waterfall technology developments) is prone to bring in effects too late. A better strategy, I find, is to embrace the agile approach “trademarked” in IT software development. The principle of agile management holds true in many other areas of activity, including performance management: it’s all about coming up with a good enough hypothesis (sooner rather than later) and iterating it several times (through small/ incremental changes rather than large, complex ones). 32 MAY 2018
For employee performance, this could mean regular informal performance discussions instead of a complicated, year-end review. For product management it could be about creating minimal viable products (i.e. imperfect prototypes) and improving them on an ongoing basis, together with customers (faster to market, cheaper and better on the longer run).
PRACTICE Which are main challenges of Performance Management in practice, today? To keep up with an environment which becomes more fluid, more ambiguous and therefore harder to predict. This has implications in terms of what to measure (different KPIs?), how to measure (more scenario planning, sensitivity analyses etc.) and when to measure (much more regularly). What should be improved in the use of Performance Management tools and processes? It would probably need to be the same things are above: (1) finding better KPIs to measure performance (e.g. more customer service or innovative thinking in employee assessments), (2) building in more scenario planning, sensitivity analyses, risk assessments to anticipate changes in the environment and (3) more fluid performance evaluations (e.g. frequent chats with sales teams to monitor customer satisfaction or sales uptake).
are aligned and consistent across the entire organization. For example, if becoming more financially sustainable is the business goal of the year, then cost savings need to be encouraged and rewarded at employee, department and organizational level. The other characteristic of a good performance management system is to be flexible and adaptable: if a new competitor enters the market unexpectedly is there a scenario covering this hypothesis or is there a decision-making process established to address this challenge immediately?
EDUCATION Which aspects of Performance Management should be emphasized during educational programs? I believe there is still a mainstream view that Performance Management equals employee performance (out of curiosity, I searched for “Definition of Performance Management” and first few Google articles consistently return the following definition: “Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization.
What would you consider as a best practice in Performance Management?
Therefore, I would like to see more discussion about Performance Management in other areas of organizational life such as: project/ program management, process optimization, competitiveness in the marketplace, business model innovation etc.
As mentioned above, I think the best Performance Management system is one where financial and non-financial incentives
What are the limits that prevent practitioners from achieving higher levels of proficiency in Performance Management?
INTERVIEWS
While performance management is everyone’s responsibility, I believe a higher onus is on people managers and functional leaders.
While performance management is everyone’s responsibility, I believe a higher onus is on people managers and functional leaders. From what I have seen in my pharmaceutical career, there are two major roadblocks for these stakeholders in achieving proficiency in performance management: lack of organizational clarity and speed of job rotation. Organizational clarity is hindered by highly matrixed and virtual structures. This is especially true in large pharmaceutical companies where it is not uncommon that an individual has a direct manager, a dotted line manager and even a project-level, temporary manager. It will be difficult for the supervisors of such individuals to ensure alignment with the rest of stakeholders on what concerns their direct reports’ priorities and resource allocation. Speed of job rotation can also harm the abilities of key employees to deliver a full cycle of success (both for themselves as well as for the individuals/ teams/ departments they lead). Many pharmaceutical organizations prefer to rotate their employees every 1.5 years on average, which is less than the “traditional” 3 years development cycle. When learning & execution needs to be accelerated, quality of long-term processes (such as Performance Management) is at stake.
PERSONAL PERFORMANCE What is your opinion on the emerging trend of measuring performance outside working hours, during our private time? Coming from a healthcare background, I am of course biased towards healthy lifestyle digital applications. I find them very useful if one is able to find the needle in a haystack (there are
over 250.000 mobile health apps available and a short overview of the mHealth market can be found on medium.com– check for a post from Adoriasoft_Com entitled ”Healthcare Mobile App Development and mHealth Apps in 2017”). More broadly, I guess the matter of measuring one’s own performance in private life is strictly correlated with personality and preference: more analytical mindsets might even find it entertaining. What personal performance measurement tools do you use (i.e. gadgets that track blood pressure, steps taken, heart rate, burnt calories or tools that help with one’s finances or personal skills)? Throughout the past few years, I have used various movement measurement apps (such as Fitbit) and sleep monitoring trackers (some of the more notorious ones being SleepCycle, Calm or Digipill). The latter have actually helped me wake up fresher than I ever thought possible, due to the precise coordination with light sleep phases. At work I used to keep track of my daily performance via a simple, self-made excel file, showing major tasks, time spent on each, for which project and for which stakeholder/ customer. In this way I realized that 30% of my time was going on “Miscellaneous” (inbox cleanup, distractions from colleagues, various mandatory trainings, ad hoc assignments etc.). I also realized I was not allocating enough time for my priority customers and projects, a useful insight to bring along in my regular performance reviews and be proactive about it.
SPECIALIZATION SPECIFIC QUESTION Practitioner Point of View: Which were the recent achievements in generating value from performance management in your organization? Takeda is a “40.000 employee startup”, as CEO Christoph Weber likes to describe a global pharmaceutical company founded in Japan, more than 230 years ago. This means that our performance management system rewards both agility and stability. From an agility point of view, the focus currently is on value innovation, customer excellence and operational effectiveness. The employees in my region (Europe & Canada) have goals related to these three KPIs in their annual objectives. There are internal competitions for generating innovative, digital health services for customers. A new project management office has been created to monitor strategic projects related to these KPIs. From an external recognition perspective, Takeda has been granted multiple EyeforPharma awards for innovative patient support programs, disease awareness campaigns and digital healthcare solutions (social.eyeforpharma.com). From a stability perspective, the values of Takeda-ism (Integrity, Fairness, Honesty and Perseverance) are monitored through an annual global employee survey. Career progressions for senior leaders depend, among others, on the results of this survey. Externally, in the PharmaRepTrak® 2017 report of Reputation Institute (reputationinstitute.com), Takeda was ranked 3rd out of 15 pharma companies in terms of reputable business practices, even if it entered the study for the first time last year. MAY 2018 33
INTERVIEWS
Sisense has a very simple formula that has worked year after year to advance us in the Magic Quadrant
AMIR ORAD Practitioner Amir Orad
CEO, Sisense, USA In 2018, the Performance Magazine team also managed to obtain an interview from Sisense’s CEO, Amir Orad, following Sisense’s second coronation as a Visionary in Gartner’s BI Leader quadrant. Sisense was placed on the cusp of the Leader quadrant, based on its ability to execute, with a 100% “excellent” rating ratio in user satisfaction. Given Sisense’s impressive achievement of being crowned a Visionary for a 2nd year in a row, could you go into greater detail and tell us which were the most important novelties that brought Sisense this title? Sisense has a very simple formula that has worked year after year to advance us in the Magic Quadrant and in the market: Sisense innovates ahead of the market consistently, in ways that make business users more capable and powerful in handling their data challenges. We deliver that value with an eye towards providing the highest level of customer satisfaction possible. That commitment to consistent innovation, execution, and customer success directly translates into a product that is easier to use, provides better results, and offers higher return-on-investment than the alternatives. The results in the Magic Quadrant show that the market is taking notice. Given your in-depth work with business analytics, we’d be interested in finding out which Business Management aspects should be explored more through research? 34 MAY 2018
In other words, which analytics and or elements within this field could be given a lot more focus? There are two areas that we believe are often overlooked or misunderstood by the market and could benefit from additional research: The first is around embedded analytics -every company on the planet is sitting on an untapped goldmine of data, which is now only used for operations and to deliver services. All of those datasets can be mined, and leveraged to provide better insights and better analytics as a service to end-users. This opportunity to embed analytics and deliver insights throughout every company and every product is massive. This is something that Sisense is very focused on given its emphasis on data agility and analytics, but it’s not well understood by many other firms in this space. The second area is very different -- more and more people have diverse datasets that they want to analyze but unfortunately, many make the same mistake of trying to do that
with an all-encompassing data warehouse project, which takes a lot of time and money. The worst part of these is that (most of the time) companies have new data sets that are not in the warehouse by the time they’re done with the project. We believe that research should be done around whether customers really need those warehouses. We think it will show that most companies don’t need to build a data warehouse, or could use a solution like Sisense to make use of what’s in the data warehouse if they already have one. With Sisense being positioned highest on the ability to execute axis in the Visionaries quadrant, thus claiming authority in the field, what do you feel should be improved in the use of business & Performance Management tools and processes, in order to take them to the next level? The last generation of tools – Tableau, Qlik, and Excel – were very good at giving dayto-day users the ability to visualize their datasets, making the process more intuitive and more consumable to those users. Sisense is already taking this to the next level, giving everyday users the ability to analyze complex data sets – moving away from mere visualization to true complex data analysis. Sisense makes all business decision makers more powerful and capable in this activity, which historically required the input of technical staff or data experts. The opportunity ahead is to take AI and machine learning even further. We think that we’ll soon see a day where every business user is not just a data analyst or a power user, but are able to leverage technology to make exponential, Einstein-like advances using the data.
INTERVIEWS
Performance measurement used to be about straightforward metrics, like counting widgets rolling off the assembly line, or how many miles someone was driving, or how many newspapers someone was selling. Now the world is more complex, and metrics have become multi-dimensional. We’re proud to be at the forefront of this trend at the moment, but there is still a lot more that can be done as the technology evolves. In your opinion, which are the main challenges encountered in Business Management in practice, today? Business management and performance management are based on the ability to measure activity and progress. Unfortunately, today’s world is not so simple.
Performance measurement used to be about straightforward metrics, like counting widgets rolling off the assembly line, or how many miles someone was driving, or how many newspapers someone was selling. Now the world is more complex, and metrics have become multi-dimensional. In other words, you need to look at things like return on lead generation in social media, or someone’s effectiveness in hiring productive salespeople. For these types of metrics you need to measure many different criteria, which may be spread across marketing,
human resources, finance, and HR. Those multidimensional problems cannot be tracked easily (or at all) without advanced analytics. Fortunately, the BI market is heading in that direction and, despite the fact that adoption of these tools is still relatively low, companies like Sisense and others can help bridge that gap. Without these tools, managers will either continue to rely on simple measures that don’t reflect reality, or they’ll take on ambitious KPIs to measure, and fail.
NATIONAL DEVELOPMENT INDICES CATALOGUE 2017 An indices repository containing 57 fully documented indexes and 94 example on indexes which will be included in our second edition catalogue. The 57 indices included are considered the most representative ones for the political environment, the economical context, the social scene, the information technology development, the environmental and sustainable climate and the public services.
BENEFITS The most representative and complex indexes used nowadays; Documented indices in a standardized and approachable way; It aims to show global disparities and certain patterns.
Available soon on www.marketplace.kpiinstitute.org MAY 2018 35
PORTRAIT EVENTS
TOR INGE VASSHUS
It is about creating visions, the belief in what we’re co-creating. ANDREI COSTEA
Short bio Tor Inge Vasshus, Founder and CEO of Corporater, has been on the path of business performance for almost 30 years, and it all began even earlier, as he puts it, after reading ”Donald Duck – Button Soup”. For him, that was more than a mere kid’s tale. It was the story of a self-made character, someone who managed to make something from nothing. From his point of view, it might as well be one of the best books that can harness, nurture and grow a child’s entrepreneurial drive, as it had a long-lasting effect on his own. His adventure into the business world started off with his Master’s Degree in Finance and Entrepreneurship. That path propelled him towards Statoil, where he worked for 11 years, tasked with various types of corporate control activities, benchmarking, financing & budgeting, ERP systems and Performance Management Systems. Later on, he spent two years at the SAS Institute, after which he founded Corporater, in 2000. 36 MAY 2018
"Performance Management – A Way of Life"
PORTRAIT
Performance management, to me, is everything, in a way. It is my life. It is about identifying where we are, and where we want to go. What has been your professional career path and development, thus far? I worked 11 years in an oil company, Statoil, doing all kinds of corporate control activities, benchmarking, finance, ERP systems, and performance management systems. I have a master degree in finance and entrepreneurship. I have also worked two years for SAS Institute, before I started Corporater in 2000.
Were there any books, movies or other influences that were significant to your professional path? In which way? Donald Duck - 'Button Soup.' This is more than just a kid's story, it is about making something from nothing. It is about creating visions, the belief in what we are co-creating. It might be the best book on entrepreneurship and starting a business.
measuring to see if we are on track to meet our destination. What benefits do you see in using Performance Management?
Which were some of the most important moments in your professional development?
How did you begin your career in the Performance Management field?
It can be about spending resources in the most optimal way, of holding people accountable for moving toward the destination, communication and alignment of where we are going as a corporation, and also celebration when you reach your goals and targets.
For me, it was to see how big companies work, how decisions were made, and how change occurred. Also, related to that, how KPIs, analytics, and reporting were used to improve performance. I also really learned why we measured performance—the purpose, and what we wanted to achieve.
I began in Statoil. I was responsible for benchmarking, corporate reporting, finance, and budgeting.
Why would you recommend using a Performance Management system within an organization?
Donald Duck - 'Button Soup.'
It is for the same reasons, of defining where you are going, defining the steps how to get there, holding people accountable along the way, monitoring to see if we are on track with reaching our destination, and celebrating the milestones along the way.
At one point, I even approached HR about joining performance management. They said there was no such job—you have to create it. I took on a lot of corporate tasks, such as corporate benchmarking, reporting, and almost created my own job there. Later on, coming from an organization where I didn't have to sell, to come to a software company where I really had to sell, that was a very challenging time. It was a big transition to learn a new industry, and how to sell software. I learned a lot about working in a big, international software company. Both of these were really necessary for me to start Corporater.
This is more than just a kid's story, it is about making something from nothing.
It is to create a systematic approach to all of this, for communication, measurement, create a common view of where you are and where you are heading.
What does Performance Management mean to you?
Which are the most challenging aspects in Performance Management?
Performance management, to me, is everything, in a way. It is my life. It is about identifying where we are, and where we want to go. It is about defining a path of actions and initiatives to get there, and
Buy-in, change, and communication. Ultimately, it is about winning the hearts and minds of the people. What could be improved in the use of MAY 2018 37
PORTRAIT
I am more focused on the activities that give the outcomes, rather than measuring things. Doing the right things is more important than measuring things. Performance Management tools and processes? Most performance management software is not fit for the purpose it should serve. The purpose of the software system needs to be defined better, to ensure it fits what businesses need. Performance management is a journey- not a number. Most systems offer numeric systems for measuring performance. We need to go beyond that. What do you consider as best practice in Performance Management? I believe that building-in benchmarking can be a big part of this. Also, discussing targets and the resources needed to achieve targets, using target setting as an aspiration and not a negotiation, and finally individual buy-in. Which are the greatest achievements in generating value, as a result of Performance Management put in practice, which you have noticed so far in your career? Move the business in the right direction. Orchestrate the business story. Benchmarking to create a burning platform that creates the case for change. What is your approach to Individual 38 MAY 2018
Performance Management (talent management, succession management, individual assessments, compensation and benefits, etc.)? I fear that a lot of agility can be lost. An agile workforce needs to be available to do the right thing at the right time. If things are too planned out, or employees are locked to a pay for performance model, there can be little incentive for agility. If you need an agile workforce, things need to be placed at a higher level. How can a company’s management get the employees’ buy-in for the Performance Management system? Engage your employees—let them participate in how the drivers and cause and effect work. They know where things can be improved, and what can be changed. Bring them on board. What do you think of the emerging trend of measuring your performance outside working hours? People need a balance in life. People need to relax. We have enough measurement on us as it is. Are you using any kind of personal
performance measurement tools? If yes, please describe how this has influenced your life. No. I am more focused on the activities that give the outcomes, rather than measuring things. Doing the right things is more important than measuring things. Do you have any tips for successfully managing one’s work-life balance? What are your thoughts? This is up to each individual. I am either all in, or not in at all - always giving 100%-either on or off. But if other people have other switches, it is up to them. People need to find their own happiness. I believe that many people could spend more time on reflection—as we tend to be on auto-pilot. Can you think of a career advice you would offer to Performance Management professionals? Get out of your office. Try to get silos to communicate, or break the silos. Create a holistic system that is attached to strategy. Be a police when needed, a psychologist when needed, or a priest when you need to give hope. Be open, listen, and find a way together.
BUILD SCORECARDS IN DAYS, NOT WEEKS
Corporater is a global software company that empowers medium and large organizations to evaluate, manage, and continually improve business performance by providing a business management platform that adapts to client's unique business model, out of the box. We use our gains to make a social impact.
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AROUND THE WORLD
BERMUDA ON THE PATH OF BECOMING A LEADER IN GOVERNMENT EFFECTIVENESS ALINA MIERTOIU
overning effectiveness is the foundation G of a country’s state development and it triggers progress in all key areas: security, economic and social context, as well as environmental matters.
As it is quite a complex phenomenon, governing performance can be measured through several performance indicators or indices. Based on The KPI Institute’s indices taxonomy, one significant index for measuring state administration performance is the # Government Effectiveness Index. The index, created by The World Bank, measures the opinion of enterprises, citizens and experts regarding the effectiveness of quality, gathering data from survey institutes, think tanks, NGOs, international organizations or the private sector. Hence, it is based on the wider public’s perception of the government’s ability to deliver quality services, its capacity to effectively formulate and implement national policies, the government’s credibility and the trust citizens bear in the institutions that govern their economic and social interactions. The score of the # Government Effectiveness Index has values between -2.5, 40 MAY 2018
expressing the smallest level of effectiveness, and 2.5, indicating the strongest level of effectiveness.
▶▶ Regulatory Quality;
In its composition, the index includes 6 major inquiry areas or sub-indices:
▶▶ Voice and Accountability
▶▶ Control of Corruption; ▶▶ Government Effectiveness; ▶▶ Political Stability Violence;
and
Absence
of
▶▶ Rule of Law;
In the past 20 years, Bermuda has been constantly scoring between 1 and 1.33. Taking into consideration the range of values that the # Government Effectiveness index allows, Bermuda’s scores can be considered a country with a moderate-to-strong level of effectiveness, with a percentile rank of 87.98
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out of 100 in 2016 and a percentile rank higher than 75 based on the historical data. World Bank Database, Government Effectiveness Index, Available at: goo.gl/ grQwbm However, lately there has been increased awareness in Bermuda regarding the need to develop sound efficiency programs for the public sector that go beyond timeliness and focus on performance standards. This reform has started in 2008 by appointing an independent body to audit and make recommendations for change and is now continued through the Ministry of the Cabinet Office with Responsibility for Government Reform. The Ministry is working on a framework of accountability, collaboration, transparency, and integrity, which can be correlated with important aspects measured by # Government Effectiveness Index, such as Accountability or Control of Corruption. Another important part of the reform taking
place in the country refers to the Rule of Law, with Bermuda’s Minister of the Cabinet Office with Responsibility For Government Reform stating that “empowering the Legislature to have a more robust role” is required in order to have a successful reformation of the government and to further increase its efficiency. Such measures are also aimed at reducing bureaucracy, which fosters efficiency. Thirdly, the Ministry has planned the implementation of three permanent Parliamentary Oversight Committees “in order to improve governance, reduce waste and increase efficiency”, with the specific task of holding the Government accountable and ensuring transparency. Their efforts have become so noteworthy, the country has even won an international recognition for transparency from the EU and the USA. Lastly, the fight against corruption is supported by the United Nations Convention Against Corruption and the OECD Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions, both of which are sought to be extended, in order to further strengthen Bermuda’s status as an exceptional offshore financial centre. All in all, although the country only has a medium-to-strong level of government effectiveness, it is on the path to improve its performance at this level, and there are at least three key learning points that other governments can take from Bermuda’s example, which can help them increase their efficiency based on more than just service time: 1. Setting a performance management system based on a clear framework which fosters accountability, collaboration, transparency and integrity; 2. Establishing clear requirements as part of the regulations; 3. Establishing quality or control bodies to make sure their performance management system is implemented correctly.
MAY 2018 41
AROUND THE WORLD
PHILIPPINES BETWEEN ECONOMIC PERFORMANCE AND HUMAN DEVELOPMENT ALINA MIERTOIU
he Philippines economic growth has Tascending accelerated in 2015 and remained in an trend until now. But is economic performance all it takes to consider a country a good example of managing performance at national level? Recent research argues that “economic growth itself will not be sustained unless preceded or accompanied by improvements in human development.”
Several reports revealing the performance of countries in different fields released this year, outline the economic development, but a decrease in human capital investments in the Philippines. In terms of economic freedom and global competitiveness, we can notice an increase in the Philippines’ score, while the corruption index and human capital development show a decrease in these two areas. 42 MAY 2018
The # Index of Economic Freedom assesses the degree of advancement in economic freedom, based on the severity and number of government policies, taxes and regulations in 186 countries in accordance to 12 measures of economic freedom. The increase of economic freedom is linked to declines in poverty, sickness and inequality of income. The index focuses on four major aspects which exert influence on a nation’s economic freedom: rule of law, government size, regulatory efficiency and market openness and measures metrics such as trade freedom, business freedom, investment freedom, and the degree of property rights protection. Out of the 12 metrics measured by the index, Philippines scored high in “property rights, government integrity, regulatory efficiency,
and monetary freedom”, and scored low in “government spending and tax burden”. The second index showing an improvement in Philippines’ development is # Global competitiveness. This assesses the competitiveness degree of global economies based on 12 pillars in order to understand what drives their productivity and prosperity. The # Global Competitiveness Index classifies global economies by their ability to efficiently employ resources in order to ensure the wellbeing and prosperity of their citizen. The # Global Competitiveness Index serves as an objective tool to be used by governments, the private sector and the civil society to increase future welfare. The
World
Economic
Forum
defines
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competitiveness as “the set of institutions, policies, and factors that determine the level of productivity of an economy, which in turn sets the level of prosperity that a particular country can achieve”. Although the government is seen as able to drive productivity and prosperity, it is still considered corrupt and less oriented on human development. The score of Philippines dropped 6 points in what concerns corruption and one place in the Human Capital Index. The # Corruption Perception Index analyzes the corruption level worldwide by standardizing data reported by different organizations and comparing countries against each other. Corruption is an important item of the international affairs agenda, as it has been responsible for holding back countries in the journey towards prosperity. The # Corruption perception Index allows the assessment of citizens’ opinions on their government. The index is a reflection of the key stakeholders’ perception, but it also incorporates expert opinions, business people and analysts.
Human Capital Report ranks the performance of 130 countries based on their efforts to develop their human capital using four dimensions: capacity, deployment, development and know-how. The assessed groups are split in five age groups: 0–14 years; 15–24 years; 25–54 years; 55–64 years; and at least 65 years old. # Human Capital Index is considered a tool to assess progress within countries and points to opportunities for cross-country learning and exchange. Given the decrease in human capital development, officials from Philippines admitted that there is a need to develop workers, as “workers are the primary force of economy”. Hence, we can conclude that Philippines officials acknowledge the need of a balance between performance in both areas and strengthen the need of measuring performance at country level through aggregated measures such as indexes as they: ▶▶ present the current results; ▶▶ enable benchmarking countries;
with
other
▶▶ drive performance improvement. MAY 2018 43
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GOVERNMENT PERFORMANCE MANAGEMENT IN MALAYSIA ANDREA MINELLI
L
ocated in the heart of South East Asia, The Federal Constitutional Monarchy of Malaysia has experienced a steady economic growth during the past 20 years. After the Asian financial crisis of 1997-1998, Malaysia continued to post solid growth rates, averaging 5.5% per year in the 2000-2008 period. The country was harshly hit by the Global Financial Crisis of 2008-2009, but fully recovered, to pre-crisis level, posting growth rates averaging 6% since 2010 till 2017. The major highlights of the Malaysian economy have been its ability to transit from an economy dominated by production of raw natural resources during the 1980s, to becoming a leading exporter of electrical appliances and natural gas, as well as implementing initiatives aimed at reducing household income disparities, which remains higher relative to other East Asian countries. Despite years of performance management activities, combined with and project coordination in public sector, Malaysia’s
44 MAY 2018
productivity growth has performed below standards with respect to its regional competition. As a result of this underperformance, the government decided to employ KPIs as a tool to enhance public sector performance and productivity. Malaysia’s PEMANDU and the NTP PEMANDU, an in-house private consultancy firm, has been set up by the Malaysian government to support the implementation of Malaysia’s National Transformation Program (NTP) which aimed to modernize government operations in the public sector, improving citizens livelihood and attractiveness of private investments both from foreign and domestic investors into Malaysia. Under the NTP, the Government Transformation Program (GTP) was aimed at improving public service delivery and strengthening public institutions whilst the Economic Transformation Program (ETP) was developed to create a more diversified, adaptable macroeconomic system able to
balance volatile global economic patterns. The government expected, with the implementation of the plan, to set the right conditions that would turn Malaysia into a globally competitive high-income country by 2020. Overall, during the first six years of implementation, noticeable results have been achieved in terms of reducing the fiscal deficit by 55%, creating more than 2.25 million jobs and building more than 6,000 km of rural road. These outcomes will be analyzed in more details in the following chapter. The structure of the overall program was created in accordance to the strategic objective of ensuring a transition to a “HighIncome Nation” focusing on 7 public areas of interest, named National Key Results Areas (NKRA), serving the purpose of creating both short and long-term initiatives in order to improve these high-impact areas. For each area of interest, a minister was appointed to lead the mission of fulfilling the objectives of the NKRA through clustered KPIs.
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To ensure success and tangible outcomes for each KRAs, PEMANDU organized a series of “Labs” aimed at training public service employees working across each target area and ensuring effective and efficient problem-solving skills. The GTP appointed seven target areas that focus on the following matters. To prioritize the sectors of the Malaysian economy that had a comparative advantage as “hotspots” for national and international investments, the ETP classified 12 National Key Economic Areas (NKEA’s) ranging from Oil, Gas and Energy, to Agriculture, Tourism and Healthcare. To increase the ease of doing business and creating a more competitive environment for companies operating in the NKEA’s, the Economic Transformation Program introduced six Strategic Reform Initiatives (SRIs) formulated under 37 individual policies approved by the National
Economic Advisory Council. PERMANDU-driven NTP Results Since 2009, PERMANDU has been responsible in overseeing the implementation and assessing the progress of the GTP & ETP, facilitating the achievement of NKRA and NKEA objectives, under the guidance of the PM’s vision and motto – “People First, Performance Now”. During its seventh year of implementation, Malaysia has been able to record noticeable performance improvement towards the NTP goals which were achieved 90% or higher in all the key results area. As published in the 2015 Annual Report, most of the NKRA/NKEA/ SRI composite scoring have out-performed its own associated targets, as in the following cases:
PEMANDU 2015 Annual Report, Available at: goo.gl/Hpkk7w MAY 2018 45
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As indicated in the figure above, since the launch of the GTP in 2010, three main KRAs have performed very well. “Occurrence of crime” has decreased with an average of 10% on an annual basis, based on the scoring
methods developed by PEMANDU, with a total score reaching 114%.” Improvement of Rural Development” reached 107% and “Public Service Delivery Transformation”
achieved 120%. The only KRA that “underperformed” has been “Improving Urban Public Transport”.
PEMANDU 2015 Annual Report, Available at: goo.gl/Hpkk7w
Within each KRA, a specific set of KPIs have been monitored in time, as in the figure shown above – “Reducing Crime” included the following KPIs: % Reduction in reported index crime, % Reduction in reported house break-ins, % Reported street crime, # Inmates undergoing certified skills training, each associated with a performance score based on the scoring methodology chosen. The PEMANDU initiative, not only economically and socially impacted the Malaysian economy, it acted as a tool to foster stakeholder engagement during the macroeconomic transformation process, but also political commitment, given the fact that appointed Ministries in charge
of the KRA were in strict contact with the Malaysian Government. However, the overall success of the PMS was mainly attributed to the use of sound performance measurement models (The Big Fast Results method – BFRI) that consisted of identifying the areas of interest that will go through a transformation process to ensure performance improvement in the long-term. Once it identified the target areas, PEMANDU summoned an international panel of experts from the IMF to assess and review the performance progress on an annual basis, through a customized KPI framework, specifically developed in
partnership with the Malaysian government. What made PEMANDU such an effective tool? PEMANDU has operated with a single measure of success – the extent to which projects contributed to Malaysia’s becoming a high-income economy as classified by the World Bank. With such an objective in mind, the Malaysian Government has continuously supported the PEMANDU initiatives especially in the form of financial investments. Given that the country’s leadership prioritized the implementation of the initiatives required for a “better performing Malaysia”, those priorities had the top management’s full commitment, which were then translated in several granular projects. The secret of its success can be attributed to the extensive stakeholder’s workshops that lasted 6-9 weeks, called “Labs”, which focused on breaking down each industrial and sectoral priorities into concrete projects with responsible timelines, ministries and above all KPIs. The collective leverage generated by the representatives from government agencies, the private sector and civil society ensured a successful consultative process during these Labs.
46 MAY 2018
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Labs processes, PEMANDU Annual Report 2016, Available at: goo.gl/BpFVP1
As illustrated in the figure above, during the entire duration of these performance management meetings, the involved participants will research and plan for the resources needed to create a solution, within a specified timespan, which encompasses all the performance gaps presented within a specific KRA or KEA. The aim of such sessions is to ensure discussion and brainstorming activities take place, in order to deliver an implementation plan, with identified KPIs that will be monitored on a timely basis. In the case that, during the routine KPI monitoring process, if an indicator was not relevant anymore, PEMANDU would have supported the KPI selection process, through a workshop gathering all of the required ministries, with the key result area being put under analysis. PEMANDU’s problem solving workshops, commonly known as Labs, belong to a broader performance improvement methodology known as “The Big Fast Result” methodology, that is anchored in the 8 Steps of Transformation, which the in-house consultancy firm has utilized as a means to ensure buy-in, alignment and implementation of performance improvement initiatives among the KRAs. Implications for the future The Government of Malaysia has set up PEMANDU, the world’s biggest government “delivery unit” with the objective of
ensuring a transformation of the Malaysian economy to a “High-Income Nation” by 2020 (Wawasan 2020) by facilitating the delivery of NTP initiatives. In its 7th year of operation, performance data has proved that Malaysia has moved and is still moving towards the right direction, starting from reducing income disparities within the Malaysian society, and above all ensuring better citizen outcomes in terms of security, access to healthcare, mobility and education. The program, however, has faced criticism from some political parties, secondguessing the overall performance results of specific KRAs in association with the NTP initiatives. The criticism was due to the fact that certain KRAs indicators were focused on the intermediate outcomes rather than the actual impact of the Program.
In conclusion, the road towards Wawasan 2020 is far from being done, however, it must be acknowledged that the performance management reforms based on a KPI framework have resulted in improving the efficiency of both private and public service delivery, ensuring better citizen outcomes and installing a more progressive, united society based on a diversified economy. The challenge to be faced now is to ensure the continuous alignment between the Malaysian government and the Civil Service Delivery Unit, which will continue to work without PEMANDU’s supervision, implementing the National Transformation program towards achieving better prosperity and opportunities for all of Malaysia’s citizens.
As we are entering in the final phase of the NTP, the Malaysian government has decided to implement some changes, by transitioning PEMANDU’s role and responsibilities over to the Economic Planning Unit’s Civil Service Delivery Unit, which during the last seven years has acted under the guidance of PEMANDU, as the driver of the Malaysian transformation towards Wawasan 2020. Throughout 2017, the majority of the transformation conducted so far has been transferred under the responsibility of the Civil Delivery Unit service. Between 2018 and 2019, this transfer process will continue ensuring the continued implementation of the National Transformation Program. MAY 2018 47
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GOVERNMENT PERFORMANCE MANAGEMENT IN VIETNAM ANDREA MINELLI
L
ocated in the heart of South East Asia, The Socialist Republic of Vietnam has experienced a steady economic growth during the last twenty-five years. Starting from the late 1980s, the central government has initiated a vast array of economic reforms, commonly known as “Đổi Mới´” (open door) with the objective of moving the country away from a centrally planned economy, penalized by large-scale production, trade deficits and hyperinflation, back to a market oriented one. The implementation of such policies were enacted by the Sixth Party Congress in December 1986. The Congress agreed on the need for policy reforms aimed at reducing the macroeconomic (and political) instability that characterized the country along with accelerating the economic growth using monetary and economic policies at price, wages and fiscal level.
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The Đổi Mới has had a significant impact on the country, both on the individual level, in terms of personal welfare, for instance, average annual income has been boosted from US $ 150 in 1985 to US $ 2000 in 2015, as well as in regards to country welfare, as it has made Vietnam a global economic player. Along with China, Vietnam has been considered one of the powerhouses, in an economic development sense, of Asia. However, despite the noticeable improvement in the status of the economy, along with a guaranteed stability as opposed to the country’s turbulent past, there have been growing pains along the way, starting from the increasing disparity in income distribution, widespread poverty especially in rural areas, as well as corruption across all levels of the government structure.
Moreover, according to the World Bank’s “2016 Ease of doing business index”, Vietnam was ranked 90th (decreasing from 2015’s 82nd) out of 189 surveyed economies. Overall, despite the above-mentioned challenges faced by the country, there is much to be positive about the evolution of the Vietnamese economy, above all when considering where the country came from just two decades ago. In more recent times, with Vietnam’s ratification of the Trans Pacific Partnership along with the signing of free trade deals with the European Union, analysts predict that these deals could fuel a further boost to the Vietnamese economy for the next decade, through its export-intensive activities.
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Considering the forecasted economic benefits at stake, the Vietnamese government has talked about the introduction of a Performance Management System aimed at monitoring and achieving the strategic objectives laid out during the launch of the Ninth Five-Year Economic Plan for the years 2016-2020. In the plan they have announced, eight economic indicators have been assigned targets: ▶▶ Average annual GDP growth between 6.5% and 7.0%; ▶▶ GDP per capita between US $ 3,200 and US $3,500 in 2020; ▶▶ Industry and Services to account for 85% of GDP in 2020; ▶▶ Total Social Investment Capital between 32% and 34% of GDP in 2020; ▶▶ State budget deficit of 4% of GDP in 2020; ▶▶ Fall in energy consumption as a % of GDP of between 1% and 1.5% per year; ▶▶ Urbanization rate of between 38% and 40% by 2020; ▶▶ Total Factor Productivity contributing 30% to 35% of growth, with labor productivity increasing 5% per year on average. Vietnam’s Provincial Governance and Public Administration Performance Index The Performance Management System developed by the Vietnamese government rests on the concept called PAPI. PAPI, introduced by the Government in 2009, is a policy monitoring tool, created in collaboration with the Center for Community Support Development Studies (CECODES) under the United Nations Development Programme (UNDP), to reliably assess citizens’ experiences and satisfaction with governmental performance at the national and sub-national levels. This PMS aims at improving the performance of local authorities to meet their citizens’ needs in two ways:
Creating constructive competitions and promotes learning among local authorities; Enabling citizens to benchmark their local or provincial governments’ performance and advocate for improvements. Since its introduction, the PAPI survey has captured and reflected the experiences of nearly 100,000 citizens with diversified demographic and educational backgrounds. By reeling in citizens’ feedback about government performance and policy making, PAPI helped build a performance culture within national and provincial governments to support better policy making, management of public resources and public service delivery. The Index showcases an overview of nationwide performance by measuring six dimensions, composed of 22 sub-clusters and by monitoring 90 Key Performance Indicators. The dimensions are the following:
Since its introduction, the PAPI Index has received broad-based political support from the National Assembly Ministries and provincial governments, becoming a very useful tool for policymakers to effectively tailor new policies to meet citizen’s needs. In 2015, the initiatives taken by the national government have yielded improved performance especially in the delivery of public services and in a stricter control of corruption. However, there is still room for improvement, as most noticeably the transparency dimension declined sharply, more than 7% in 2015 compared to previous years. Another problematic area is the decline in citizen participation in political life and policymaking, reaching an all-time low, since 2009. PAPI has now been implemented nationwide for six consecutive years. The year 2015 witnessed declines across almost all the
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Participation at Local Levels – composed of 4 sub-dimensions, measuring 18 KPIs (e.g. % Participation in village head election, % Voluntary contribution to project).
2
Transparency in Local Decision-Making – composed of 3 subdimensions, measuring 15 KPIs (e.g. # Poverty lists published, % Public awareness of local land plans).
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Vertical Accountability – composed of 3 sub-dimensions, measuring 11 KPIs (e.g. # Interactions with local authorities, % Contacted village head).
4
Control of Corruption in the Public Sector -composed of 4 subdimensions, measuring 12 KPIs (e.g. % Public agree no bribes for State Employment).
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Public Administrative Procedures – composed of 4 subdimensions, measuring 16 KPIs (e.g. % Applied for construction permit, % Received land title).
6
Public Service Delivery – composed of 4 sub-dimensions, measuring 18 KPIs (e.g. % Population with health insurance, % Access to drink tap water).
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dimensions, as compared to previous years, a complete overview of the 2015 Performance results can be seen here:
As it can be seen, Public Service delivery is the only dimension that experienced an improvement in performance. These
declines could be due to changes in the way the PAPI survey was conducted, including the introduction of survey administration
Vietnam Performance Management Framework – PAPI, 2015 results, Available at: goo.gl/SytGyj
technology, new training protocols, but above all new questions. With such changes, fewer respondents participated in the 2015 survey, compared to the 2014 results.
developing its own system of Government Performance Management. During the last 5 years, the survey has experienced changes in the structure, methodology and delivery.'
This could have influenced the results in the transparency dimension. Respondents who had already participated in the survey might see it as a source of information that encourages citizens to press officials for further information on the budget or land development plans, leading to overall improvements in their assessment of transparency, in the following years. However, with fewer respondents during 2015, transparency was rated poorly compared to previous years.
Although it is not clear how much of the PAPI indicators created as a result of citizens’ responses will be a part of the government performance management system, it is noticeable that Provincial Governance and PAPI Reports have fueled an appetite in the country towards the utilization of a bottomup perspective of government performance.
Implications for the future The Government of Vietnam has introduced the PAPI Index, with the objective of 50 MAY 2018
Along with the PAPI Index, the Ministry of Home Affairs is currently developing, even though it is still in pilot mode, a second index called the Public Administration Reform (PAR) Index, which will target both Ministries and ministry-level agency performance, province and centrallyaffiliated city performance, and the
Provincial Competitiveness Index (PCI) which measures businesses’ experiences with provincial economic governance. Assessing what has been done so far, the Vietnamese government is acting fast in order to create a PMS framework that would enable them to help national, local and provincial governments to perform better, through the application of a holistic approach, with clear priorities, milestones, outputs and outcomes assigned to face the identified challenges. With the citizens’ feedback mechanism in place via PAPI and PCI, Vietnam is confirming its commitment to building a strong, responsive and accountable government system, in preparation for the realization of the Agenda 2030 for Sustainable Development.
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PERFORMANCE MANAGEMENT PROGRAM FOR CANADA’S CROWN CORPORATIONS ANA LECHINȚAN
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ith over a century behind them, Canada’s state-owned corporations represent a valuable gem on the country’s crown, as they fulfill important economic and policymaking roles. These exceptional entities fulfill an important role in the national economy and policy-making. In order to ensure that their performance results will shine like crown jewels, the government has implemented a Performance Management Program for their CEOs. So how does Canada ensure that the taxpayers’ finances are responsibly managed and invested?
interests. Furthermore, some are meant to provide services which are not covered by the private sector in cases in which the latter is either unable or unwilling to do so.
Crown Corporations
Other crown corporations are entirely selfsufficient or of a predominantly commercial nature as profitable entities, being expected to generate a return on the government’s investment. Regardless of their type, crown corporations have been established for the benefit of the whole nation, whereby their performance results will conclusively have an impact on the wellbeing of Canadian
Structured like private or independent organizations, Canada’s crown corporations play a crucial role in advancing governmental policies and objectives in a great variety of pivotal sectors, ranging from agriculture to transport and culture, while at the same time some of them also fulfill commercial
For instance, it would not be economically feasible for a for-profit company to provide passenger or mail transport across the whole territory of the world’s second largest country, especially since some regions are sparsely populated. Thus, these roles were taken over by institutions such as the Canada Post or the Marine Atlantic.
citizens. The entities’ governance falls under the various ministries which appoint a board of director for each of them. In its turn, the board of directors, together with the cabinet, appoint the Chief Operating Officers. Uneasy lies the head that wears a crown and to support these CEOs in succeeding to apply the authority they hold and reaching the set objectives, a Performance Management Program has been implemented nationwide through the Privy Council Office. Performance Management Program for the CEOs of Crown Corporations Provided that the ultimate clients of the state-owned corporations’ CEOs are the county’s citizens, assigning accountability, monitoring performance results and awarding top-performers is a strong requirement. Other objectives of the Performance Management Program include MAY 2018 51
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the following: ▶▶ Encouragement of superior performance through determining clear objectives which in their turn are linked to corporate and government goals; ▶▶ Assessment of leadership competencies and the rigorous evaluation of achieved results; ▶▶ Identification of strong performance, as well as of underperformance, and rewarding good results; The program applies to the CEOs of 39 crown corporations who must hold their position for at least three months out of the 12 months long performance cycle, which allows for an accurate performance assessment. The program includes and allows the deployment of a compensation plan, in accordance to which CEOs receive a base salary and a performance pay, the latter having to be re-earned on a yearly basis. The Performance Management Framework is structured according to recommended best practices: there are five performance perspectives, each of which has its specific objectives. Furthermore, for each objective, several KPIs and/or initiatives have been chosen to foster progress and positive results. The KPIs and/ or performance initiatives, labeled “Performance Measures” in the Performance Management Program Guidelines, are designed to be challenging but at the same time achievable through the CEOs efforts and must be results-oriented and measurable. KPIs are also based on hard data or on observations and may be a reflection of both qualitative or quantitative measurements. While a set of objectives and KPIs are recommended by the government, the framework can be adapted in accordance to each crown corporation’s specifics, as long as it is designed in accordance to the abovementioned standards. Performance Rankings On the basis of performance results, at the end of the performance cycle – which corresponds with the corporation’s fiscal year – the board of directors reviews the CEOs 52 MAY 2018
performance and makes a recommendation to the minister for a final performance rating. These performance ratings are subsequently evaluated against the set objectives of each of the five perspectives and can turn the following results: “Did not meet/ Unable to Assess”, if the objectives were not achieved or in the case in which an assessment could not be conducted because of leaves, trainings and special assignments. “Succeeded-“ if the CEO did not fully succeed in meeting objectives, “Succeeded” if all or the majority of objectives were fully achieved and “Succeeded+” if all objectives were met and some of them exceeded expectations. There is also a fifth category, “Surpassed”, when all objectives were achieved and expectations were significantly exceeded in several areas of significance or under very challenging circumstances. While these criteria are certainly wellthought-out and methodical and are most likely analyzed in context, they also leave space for interpretation since terms like “the majority” or “did not fully succeed” can be rather ambiguous. In this case, one solution could be the assignation of thresholds for each rank.
For instance, “Succeeded-” could refer to the achievement of 80%-90% of performance targets, while “Succeeded” would be granted if “90%-100%” of targets were reached. “Succeeded+” could apply in instances where 100% targets were reached and 10%50% of targets were surpassed. On the same note, “Surpassed” could be linked to cases where >50% of targets were exceeded. Nonetheless, the performance evaluation in its current form is quite rigorous and the performance results are reviewed multiple times by various individuals until finally being approved by the Governor in Council. Sample Performance Measures
Objectives
and
While the board has the freedom to establish their own performance perspectives, objectives and KPIs, the Privy Council Office provides its own framework. As already mentioned, it is structured on five categories : Policy and Program Results (containing objectives that mainly reflect on governmental focus areas), Management Results (with objectives based on financial, human resources and risk management priorities), Shareholder and Stakeholder Relations Results (objectives designed to ensure effective relations with stakeholders),
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Leadership Results (objectives reflecting on the CEOs leadership abilities and ethics) and Corporate Results (objectives communicated on behalf of the Governor in Council on an annual basis, highlighting the priorities of the Government and/or of crown corporations). The Privy Council Office also provides a set of sample performance objectives and measures, including the following which pertain to the first performance perspective, Policy and Program Results:
For the fourth objective, “Improve service offerings to small/medium enterprises by making sure that they are increasingly relevant to their needs”, the listed performance measure, “Adapt current solutions and/or develop/implement new ones to meet changing needs of clients” is an initiative, which has as a purpose the achievement of an objective, rather than its measurement. This initiative could be turned into a KPIs such as % Adapted solutions or # New solutions developed and # New solutions implemented.
be. Canada’s crown corporations’ nature, structure and role in the economy is also a subject of debate. However, by implementing a system for the performance measurement of CEOs which, in the end, are managing the taxpayers’ finances, the government created accountability, responsibility and ownership. And, to crown it all, top performers are also motivated and rewarded in a meritorious and just manner.
Privy Council Office, Policy and Program Results, Available at: goo.gl/g6usPL
Thus, for instance, “Policy and Program Results” has eight assigned sample objectives. The first objective is “Deliver services that are responsive to the clients’ needs and that meet their quality of performance expectations”. This objective is measured through three Key Performance Indicators, standardized in accordance to The KPI Institute’s promoted best practices: # Timeliness of service, which is measured in days, can be calculated as an average and has a target of <20 days for service provision; % Client satisfaction with a target of 95% satisfied customers and % Service completion, which aims for a 90% completion within 30 days of the due date.
The Performance Management Program also awards crowning achievements of CEOs in three ways: through economic increase, inrange salary movement or as at risk pay based on the successful achievement of objectives. The performance award percentages for the period 2017-2018 are only granted to professionals which succeeded in reaching the objectives to a certain extent and can range from a minimum of 3.75% salary increase for “Succeeded-“to a massive 33% salary increase in the case of “Surpassed”. In many cases, state owned companies are viewed as thorns in a country’s crown, rather than the jewels they are supposed to MAY 2018 53
PERFORMANCE IMPROVEMENT
BUSINESS SIMPLIFICATION THE KEY TO INNOVATION AND SUCCESS MARIA JUNCU
the last several years, more and more Fveryormanagers have been talking about how the complex processes companies embrace
have a negative impact on productivity and on the workplace as a whole. This idea is reinforced by the findings of major CEO surveys led by IBM, KPMG, as well as by Knowledge@Wharton in collaboration with SAP, which have identified complexity as one of the main challenges all businesses face. According to the “Simplifying the Future of Work Study”, the survey conducted by Knowledge@ Wharton and SAP: “Business
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simplification is a strategic imperative for today’s companies if they wish to unlock innovation and position themselves for future success in an increasingly complex world.” Unfortunately, most companies seem to be unable to effectively align their actions with their goals of simplifying business processes. The same survey gives us a few reasons why there is such a big gap between what companies want and what they do in regard to business simplification. A few of these reasons are: “corporate inertia, lack of clear prioritization from top management and under-utilized
technology solutions”. Denise Broady, Chief Operating Officer of Industry Cloud at SAP, stated that this struggle has been an issue for more than a couple of years and that companies have found road blocks everywhere, from corporate cultures resistant to change, to managers who have little to no time for implementation. Despite all of these setbacks, business simplification has become even more necessary. How so? Morris Cohen, Wharton Professor of Operations and Information Management and co-director of the Fishman-
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Davidson Center for Service and Operations Management explains: “As firms have become more global, outsourced and technology driven, the complexity of their operations has increased. Thus the need for simplification has become greater.” Digital business is the main cause for the addition of so many layers of complexity to every enterprise, as companies must adapt and evolve in a short period of time to fulfill the increasing demands of customers on a variety of channels.
complexity to every process? The path towards simplification must begin with self-diagnosis. Daniel A. Levinthal, a Wharton Management Professor and Chair of Wharton’s Management Department, claims that companies should start gathering specific micro-data to locate where the system is too complex and to use that data to make informed decisions. Technology is another important factor that can help in the process of business simplification, as it can:
Apart from slowing down processes due to bureaucracy and red tape, business complexity is also costly because it uses more resources than necessary to achieve the company’s goals. All these hindrances annoy clients, vendors and partners, who could just as well choose some other company to do business with.
▶▶ “provide the right data at the right time about the right person” so that companies can better target the market;
On the other side, Mary Haskins, Vice President of Leadership Experience at SAP, said that simplification has a lot of perks:
▶▶ “play an important role in developing and retaining business leaders.”
“…better customer experience, higher profitability, reduced costs and an increase in employee engagement and retention… It minimizes redundancy, and improves efficiency, customer satisfaction and retention”. So how can a company escape this neverending cycle of adding layer after layer of
▶▶ “automate the process of applying the laws of different countries on various business processes, such as payroll”;
According to Chris Zook and James Allen, two consultants with Bain & Company, who have written the book “Repeatability: Build Enduring Businesses for a World of Constant Change”, which focuses on the issue of simplification, most successful companies share three values: 1. They have a highly distinctive core business;
2. They make great efforts to keep their business model as simple as possible; 3. They apply it relentlessly to new opportunities. Zook and Allen refer to complexity as the “silent killer” of modern business and they advise every company to avoid it by embracing simplicity. However, the two also admit that there are times when simplicity might not be enough for a company to thrive. Those instances are shaped by disruptive innovation, by a sudden shift of the competitive environment. If we look back, there are many examples of companies that have failed not because of their complex processes, but because they were crushed by better, more innovative newcomers. The best examples, and the most unfortunate cases, are Kodak, Xerox, Nokia, Kmart and Blockbuster. Nevertheless, Zook and Allen argue that companies have a better chance at surviving dramatic changes if they are not burdened by unnecessary complex processes. Simplification can be regarded as one of the main drivers of innovation and success. However, companies have to keep in mind that focusing only on simplification is not conducive to success, especially when the health of the business as a whole is neglected.
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PERFORMANCE IMPROVEMENT
EIGHT FACTORS THAT CONTRIBUTE TO THE SUCCESS OF A BUSINESS MARIA JUNCU
business, no matter if it’s a startup or Edealvery a well-established enterprise, puts a great of work into making itself successful.
Any experienced business professional knows very well that success in business is planned and that it is not left to chance. Several success factors are common to most businesses and understanding what they are and how they work can help any business succeed. Here are eight of the most important success factors according to Lisa Nielsen, author of “Key Business Success Factors” and George N. Root, author of “Three Key Success Factors in a Business Area”:
1. Cost Management By controlling the costs of your business, you can keep all your other costs under control, including manufacturing, advertising and location operations. If you can reduce your costs, you can free up financial resources, which can be used for expanding your product line or increasing your marketing efforts.
2. Employee Attitudes 56 MAY 2018
Employee attitude can lead to change. If the employees of a company do not take initiative, make suggestions and strive to do their best work all the time, that business will stagnate. A key business success factor is a motivated and committed workforce. Without that, no matter the vision or the planning, the company will not be able to achieve growth and prosperity.
3. Technology Keeping up-to-date with technology is crucial. The company that utilizes technology to open up new markets, serve customers, increase efficiency and to
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make it a part of your plan.
6. Marketing Message There are many companies that do not oversee their marketing message as they should. Because they have different messages going out to the same audience at the same time they create a state of confusion among potential and current prospects. Companies with a consistent message across all media platforms, such as websites, paid media and other forms of marketing collateral, are the more successful marketers. Marketing consistency is a success factor that any company should not overlook.
7. Customer Retention No matter the industry, a company is successful if it can retain its main customers. A company that seeks constant development and success does not become complacent after getting the big contract, it works to keep it. Such companies develop new ideas based on the needs of their larger clients to keep them interested in doing business with them. If a company cannot retain its top clients, staying successful can become very difficult. discover new products and develop their services has the better chance to stay ahead of the competition. What is more, this success factor, together with a motivated workforce, can help you face any business downturn.
debt load and a drive toward efficiency in holding down variable costs, among others. Financial success indicators may also be different from one industry to the next.
5. Global Influence 4. Finances Most business owners will first measure success in terms of financial factors. But, while a business needs to make a profit to survive, if the right technology and workforce are not in place, profits will be more elusive. Profits, though, are a key measure of success along with positive cash flow, a manageable
No matter that your business is strictly local, your global influence is just as important because it can greatly affect your future, reflecting a measure of your success. In today's world of instant communication, you have the ability to share information, develop new products and open new markets more easily than ever before. You should examine ways to expand globally and
8. Product Development Each and every company needs to keep up with the changes in their marketplace in accordance with their customersâ&#x20AC;&#x2122; needs if they want to survive, no matter if they sell real products or services. Staying ahead of the competition is idea when trying to maintain the market share, unfortunately this not always possible. That is why, companies need to at least make sure they are keeping up with the demands of the industry and that their efforts of staying on top of product changes are recognized.
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DIGITAL PERFORMANCE
HOW TO SUCCESSFULLY IMPLEMENT THE INTERNET OF THINGS MARIA JUNCU
Internet of Things (IoT) is the concept Tto heoftheconnecting devices to each other and internet. This applies to everything
from coffee makers and washing machines, to cellphones, lamps and almost any other device that has an on/off switch. What is more, the IoT is a limitless network that does not only connect things, but people as well. The IoT’s popularity has grown over the years to the point where companies begin an Internet of Things journey with great expectations. Unfortunately, many of those companies end up experiencing disappointing business results. According to Gartner, starting with 2018, 80% of companies will fail to monetize IoT data. This claim is backed up by Cisco’s survey, which found out that one-third of all completed IoT projects were not considered a success. The question that needs to be answered is: “How can some companies successfully implement IoT solutions, while others fail miserably from the get go?” In his article, “Success with the Internet of Things Requires More Than Chasing the Cool Factor”, Maciej Kranz, the author of “Building the Internet of Things”, believes that the answer lies in change, as those organizations that implement IoT solutions successfully and achieve their expected ROI, change their traditional business approaches in a number of ways. 1. Establishing a Partner Ecosystem IoT is mainly based on interconnectivity. Interconnectivity does not only refer to the
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connections between devices, it also refers to the connections between customers, suppliers and partners. Because of this, IoT is creating the premise for a major shift in the structure of businesses, as it leads the way towards a more inclusive business model where two or more companies start working together. This means that companies have to embrace models that have an open and flexible structure, where partners can work together to solve business problems. Companies implementing IoT successfully in sectors such as manufacturing, oil and gas, mining, and transportation, have started searching for multiple partners to create better solutions. They do this because they have realized that this approach enables organizations to gain the best possible technologies that can further help them develop better solutions that advance their goals. 2. Updating the Talent Management Strategies By employing the IoT, a company will not only have to acquire new technical skills, but also experts who possess both the business and people skills to collaborate across groups inside and outside the company.
DIGITAL PERFORMANCE
Why this need for experts? Because IoT solutions cover information technology, operational technology, and core business functions – three groups that need to work together. As such, companies have come to the conclusion that they need to bring these functions together at an organizational level, creating new roles and hierarchies, if they want to successfully implement the IoT. According to Kranz, there are several strategies that can be used to develop IoT talent: Train employees in IoT skills, such as: technology, processes and collaboration;
important factor that defines the future of an IoT based enterprise is the way in which the team-based culture of diversity and openness is nurtured. 3. Focusing on the Challenge and not on the Technology In order to better understand this last change in the traditional business approach, Maciej Kranz explains how Harley-Davidson, the iconic American motorcycle company, found a way to respond to changing customer desires and to become more efficient operationally. For this, Harley-Davidson assembled people from both IT and operations to create a unified team, he “integrated multiple systems into a single enterprise network, consolidated islands of data, and created a fully IoT-enabled plant”.
Challenge employees to form teams to work together on solutions;
This major change led to the shrinking of the 21-day production schedule for new orders down to six hours, reducing operating costs by $200 million and improving production efficiency. What is more, Kranz explains that the “build-to-order cycle times sped up by a factor of 25, allowing the company to respond to customer desires far more quickly and efficiently.”
Empower, incentivize and encourage employees to think like interdependent entrepreneurs at a startup.
Sooner or later, the IoT will become the main power source that will help businesses improve their dealings with customers and stakeholders alike.
He also believes that knowing how to attract the next generation of IoT talent is crucial, as money is just one factor that needs to be taken into consideration. One other
However, for this to happen, enterprises need to make changes to their business models and strategies so that they can align themselves to the IoT’s network character.
Implement a culture of innovation across all grades, functions, and regions;
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DIGITAL PERFORMANCE
5 WAYS CLOUD HOSTING IS CHANGING THE BUSINESS ENVIRONMENT JAMES CUMMINGS
loud hosting has opened up a wide C range of opportunities to businesses that would otherwise only be open to large organizations. Companies are rapidly implementing cloud technology, from cloud computing to SaaS, all in a bid to provide and receive the best services on the internet.
For every business owner, putting faith in the most efficient and cost-effective method of getting things done shows good business sense and cloud hosting is set to change the terrain of todayâ&#x20AC;&#x2122;s business environment as we know it. Here are just a few ways cloud hosting can affect your business operations. Easily scalable One of the advantages of cloud hosting over traditional physical servers is that it is easily scalable. As a business grows, so does its hosting needs. The larger a business gets, the more customers it attracts, and the bigger its website needs. This means that the website infrastructure that worked for a startup may not work for a mid-sized establishment. Cloud hosting makes it possible to scale up, or down, as your website forms around business demands. When you scale up, your website will have enough server resources to accommodate an increase in traffic that would otherwise cause it to crash. 60 MAY 2018
DIGITAL PERFORMANCE
A level playing field For small businesses, cloud hosting has made it possible for them to compete on an equal footing with big businesses by having access to the same hosting infrastructure they do at an affordable cost. “The competition has now changed from how much you are willing to spend, to how well your products and services appeal to the market”, says Brenden of www. openhost.co.nz. Small and medium-scale business no longer wonder if they should move their hosting away from traditional physical servers to the cloud, but rather how they can go about doing so. This is because there are so many cloud-hosting providers, and companies are looking to do business only with the most reliable of these partners. A wider reach Back when physical web servers were the thing, businesses spent a lot of time and resources trying to make sure that they picked the right hosting provider and had the right SEO package that would help them reach their target market. As a direct limitation of physical servers, your website is to a large extent channeled toward visitors within the geographical location where the servers are. Due of this, businesses may not have access to international customers. Most businesses are forced to rent a different web space in a different country simply because they want to break into that market.
While SEO still plays a very crucial role in a website’s visibility, cloud hosting makes it possible for anyone anywhere to access your website’s content without any restriction. As a result, businesses, both small and large, open up to new markets that would otherwise have been difficult to break into without having a website on a physical server in that location. Cost saving At the end of the day, every business is looking for ways to cut costs and increase savings. Big businesses will think nothing short of buying their own data center to ensure that their web content is up at every minute of the day. This is because they can very well afford to do it. But what if there is an alternative that gives the same or even better results at a far lower cost? Regardless of the size of the business, large or small, the most cost-efficient method will always be chosen. Cloud hosting makes it possible for any business to have control over their hosting budget – you pay only for what you use. Businesses that experience fluctuating traffic on their websites will find this very beneficial, as they will not have to pay for those periods the website does not receive any traffic. The excess funds that would have been spent on costly web infrastructure can then be channeled into other aspects of the business.
Improved trust There is no guarantee that your on-site infrastructure or physical server will constantly be on. When customers cannot access your website, it gives the wrong message. They either feel you are not serious with your business or worry that you have ceased operating (especially for website with paying customers). If this happens consistently, your business will lose trust in the eye of the public. Cloud hosting guarantees business continuity. Your website is always on 24 hours a day, 7 days a week. Because of the failsafe features built in this system, there is very little chance of an infrastructure failure. Even on the off-chance this happens, there are several backups in place that will automatically take over, ensuring that your business is never offline. When customers know that you will always be there no matter what, it improves trust, and this will definitely help your business flourish. Final thoughts There is no doubt that cloud hosting is superior to other available forms of hosting. It has brought about significant changes in the business environment, creating access to new markets and offering SMEs the same opportunities as big businesses. If you are not currently using cloud hosting for your business website, then you need to think about doing so very soon. MAY 2018 61
DIGITAL PERFORMANCE
WHY YOUR WEB HOSTING PLAN IS HURTING YOUR WEBSITE’S KPIS JAMES CUMMINGS
speed low down on your checklist when picking a host or plan could prove costly, especially for sites like e-commerce that depend on user impression for profit. Another big impact page speed has on your site is related to SEO. Google takes page speed as a serious ranking signal. What this means is that a slow hosting plan could be hurting your Search Engine Optimization efforts. So, not only does speed reduce the number of prospects you’re getting through SEO, it also puts off the small number of prospects you’ve already managed to attract.
T
he performance of your website can go a long way in boosting or slowing down your business. There are numerous means to improve website performance, but without an appropriate hosting plan and competent host, your efforts may prove futile. From page availability to load speed, a website’s performance has the inherent ability to entice or enrage visitors. Your goal is to optimize your website to attract more web users and generate leads, and enhancing performance is the ideal way to go about things. No matter how good your site is, making the mistake of choosing an unsuitable hosting plan or provider is a move that will take its toll on your business in the long run. Though
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switching hosting providers is feasible, it can be quite a tiring chore. How your web host affects your site’s performance Your web hosting plan can negatively impact your site’s performance by affecting key performance-related indicators, which include the following: A. Site speed Studies have shown that a large number of visitors will leave your site if it doesn’t fully load in time. About 50% of web users expect web pages to load in at least two seconds, and roughly 40% will abandon the site if it takes more than three seconds to load. Putting
From running and executing lines of code to opening files on a remote computer, a lot occurs at your host’s end, from the moment a visitor attempts to open a page on your website. To choose a reliable hosting provider that won’t hurt your site speed, ensure the servers can execute the program used to develop your website. For example, you should ideally opt for a provider that deals in PHP web hosting if your site is developed with that program. You should also upgrade to a virtual private server if you’re witnessing a drag on the speed of your site, especially if you’re on a shared server. More importantly, check out reviews of the
DIGITAL PERFORMANCE
web hosting provider you’re thinking of using. You can carry out speed tests before entrusting them with your business. B. Uptime/Downtime This is a big player when it comes to how a host directly affects your business. Your need for constant availability is easy to grasp, as you’d be losing repeat visitors, new traffic and leads, and more significantly, sales. For an e-commerce site, just seconds of site downtime can lead to notable losses. According to an IHS study, which conducted a poll on 400 medium to large enterprises, businesses suffer downtimes an average of five times a month. The study further reports that these downtimes go on to cost organizations up to $700 billion every year. A number of factors culminate to cause downtimes on the part of your web host. They include: ▶▶ Poor implementation of updates and configuration changes ▶▶ Power outages ▶▶ Inconsistent supervision and monitoring by system administrators
ones that provide the closest uptime to that figure. However, you shouldn’t be confused when a web host promises 99% uptime, as this could still be a bad thing for your business, despite how high the figure looks on paper. 99% of uptime means you’ll be having a general downtime period of nearly four days during the course of a year. 1% downtime could cost your business dearly. So, go for hosts with figures much closer to 100% and with much lesser downtimes of 1% or even 0.5%. C. Security Cyber criminals are constantly on the lookout to exploit vulnerable systems, where they can carry out identity and financial theft. They don’t look to be backing down any time soon. If your web host has a poor, scarcely-updated security system in place, you may end up losing considerably important information and data to attackers. This happens with web hosts still implementing less-than-adequate practices, including: outdated admin panel versions such as cPanel, storing passwords and logins without hashing them, and utilizing database management tools that are outdated.
▶▶ Lapses in server maintenance
The damage that you can suffer from a poorly secured web host include credit card data theft (if you’re running a site that directly deals in sales -especially an e-commerce site) and identity theft, such as email and other account logins.
While it’s not possible for any web host to deliver 100% uptime, you can opt for the
It doesn’t stop at losing information. You’ll also lose the trust of the customers you’ve
▶▶ Network device failures ▶▶ DDoS attacks
fought hard to secure. So, before you commit to any web host, perform a background check to ensure their security policy can be trusted. D. Scalability and storage The general purpose of setting up a website is to foster and pursue growth for your business. Ultimately, your website’s needs will continue to grow as your business expands. Whether you’re running a personal blog, online store, or lead generation web platform, the number of site visitors you get will increase (or decrease) over time. At this point, there’d be a need to scale up – or scale down – your resources and processes. A great web hosting provider will offer you flexible subscription services to upgrade or downgrade your services, whatever the case may be. If you’re starting out small, there’d be a service offer well-suited to your needs and budget, without shutting out the possibility and transition plan for growth. Conclusion If your website’s KPIs point to decreased traffic and lack of leads, and you’re pretty sure your online marketing campaigns and SEO experts are pulling through, then it’s worth checking things out from the angle of your web host. An insufficient hosting plan or unsuitable provider can render other efforts futile, but a good one can take your business to a whole new level, whilst providing a helping hand whenever you need one.
MAY 2018 63
OPERATIONAL PERFORMANCE
HOW RPA IS ENHANCING THE EFFICIENCY OF BUSINESS OPERATIONS SAVARAM RAVINDRA
Over the last decade, Robotic Process Automation (RPA) has been evolving silently and is now utilized for enterprisescale deployments. RPA has revolutionized the way large organizations operate over the last few years, helping organizations administer their IT support processes, remote infrastructure management, workflow processes, and business processes. In order to maximize the influence of RPA, business leaders must have a firm understanding of the tools that are available and a strategy for the purpose of automating their enterprises. What is RPA? RPA can be understood as either the application of technology that enables employees in an organization to configure a computer with machine learning and artificial intelligence capabilities or simply programming a robot to handle repeatable, highvolume tasks such as triggering responses, data
manipulation, transaction processing, and interacting with other digital systems. RPA for Business Enterprises Robotic Process Automation brings highly advanced technological solutions to businesses across various sectors around the world. Organizations which adopt RPA can enhance organizational efficiency, minimize operational costs and improve quality. Collaboration between artificial intelligence and automation enables companies to handle complex projects and obtain complex capabilities. With its powerful applications in businesses, RPA helps enhance productivity in various ways across functions like analytics, marketing, operations, financial, IT, HR, supply chain management, and so on. The potential benefits of Robotic Process Automation in the various systems of an enterprise include easy integration with present legacy systems, less IT support, remote backup, elimination of language barriers, no issues of attrition and retention with robots, enhanced digital security, cost savings in operations, and so on. Let’s dig deeper into a few of these major benefits. Access to Multiple Systems RPA possesses the capability to work across systems utilizing the presentation layer, this
being one of the seven layers of the OSI code. It renders data present in another layer into something a human can decipher. Automation was accomplished in the past only within a single program before implementing Robotic Process Automation. Nowadays, without the need for any human assistance, RPA can jump between different desktop windows. However, if needed, RPA can also deal with processes in a single program. Flexibility and Simplicity Automating workflows and tasks via RPA doesn’t require script writing or coding. This implies that even with little effort, complex processes can be transferred from a user into a machine. The faster these workflows and tasks can be automated, the sooner your company will start reaping the benefits. High Accuracy It is the nature of humans that even the most careful person can commit a mistake. If you scale this up with the number of employees in a company, this may turn out to be a bigger problem. However, accuracy can be improved with software, as it’s programmed to follow rules, thus avoid man-made measurement errors in the process. Improved Employee Morale Robotic Process Automation doesn’t need any special technical skills. This is the reason
OPERATIONAL PERFORMANCE
why it is an ideal application for end-users. The capability of deploying robots to execute certain tasks without having someone from IT help you enables the end-users to get their jobs done more effectively and efficiently. Meanwhile, this leaves those in the IT department more time to focus on important projects and tasks. Increased Throughput and Decreased Cycle Times These robots are designed to carry out tasks much faster than humans and they can also
run 24/7 operations as they donâ&#x20AC;&#x2122;t require any rest. Also, with robots, there will be a significant reduction in expenditure and you can get greater output with minimal costs. Conclusion The idea of automating business processes is not that new, but the advent of robots is a significant landmark in the gradual shift of mankind towards a more efficient and productive virtual workforce that can perform mundane, repetitive, and routine tasks, leaving the users with more time to focus on
more complex issues. With automation, the limited resources available to businesses can be utilized in a much more streamlined way and this benefit would eventually pass on to employees and the customers themselves. However, before implementing RPA, it is important for business enterprises to understand the RPA model and design a roadmap and plan for RPA implementation, as knowing these three elements well will make the difference between having a successful experience or a less successful one.
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INDIVIDUAL PERFORMANCE
KEY EMPLOYEE ENGAGEMENT STRATEGIES FOR 2018 JOHN HAWTHORNE
or any business to be successful, it must have three things: a robust Fsociety overall strategy, exceptional leaders, and engaged employees. This has moved from an economy driven by the agricultural and manufacturing industries to a service oriented, personally connected economy.
One hundred years ago, employees were tasked with manual labor and had no vested interest in the business that employed them. In 2018, with high paying jobs hard to come by, it is essential for employers and leaders to engage their employees and make them feel as if they are an integral part of the business. How can they do that? In this article, we’re going to lay out the what, why, and how of employee engagement. Employee Engagement Most Recent Data In 2017, Gallup’s State of the Global Workplace report revealed that only 15% of employees worldwide are engaged in their jobs – meaning that they are emotionally invested in committing their time, talent, and energy to adding value to their team and advancing the organization’s initiatives. 66 MAY 2018
This means that the majority of employees show low overall engagement. Workplace productivity was low and employees and organizations are not keeping up with workplace demands fast enough. More Gallup research shows that employee disengagement costs the United States upwards of $550 billion a year in lost productivity. As employee engagement strategies become more commonplace, there is an amazing opportunity for companies that learn to master the art of engagement. Jacob Shriar, in a piece on OfficeVibe, tells us the following: ▶▶ Disengaged employees cost organizations between $450 and $550 billion annually. ▶▶ Highly engaged business units result in 21% greater profitability. ▶▶ Highly engaged business units realize a 41% reduction in absenteeism and a 17% increase in productivity.
INDIVIDUAL PERFORMANCE
▶▶ Highly engaged business units achieve a 10% increase in customer ratings and a 20% increase in sales. ▶▶ Companies with engaged employees outperform those without by 202%. ▶▶ Customer retention rates are 18% higher on average when employees are highly engaged. ▶▶ These statistics are just the beginning of why employee engagement is so important. Why Is Employee Important?
Engagement
So
The term “engagement” has been used so often and in so many different situations that it’s become hard to define. Many people think it means happiness or satisfaction, but it’s much more than that. According to Gallup, who has been collecting and measuring employee engagement data for nearly 20 years: “Though there have been some slight ebbs and flows, less than onethird of U.S. employees have been engaged in their jobs and workplaces.” Imagine if every employee was passionate about seeing the company and its customers succeed. The only true way to ensure that your customers are well taken care of is by taking care of your employees. This is known as the service-profit chain, a concept first introduced by Harvard Business Review in 1998. It’s still as relevant today as it was then. Profit and growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers. Value is created by satisfied, loyal, and productive employees. Employee satisfaction, in turn, results primarily from high-quality support services and policies that enable employees to deliver results to customers. The service-profit chain is the flow from the culture you create to the profits you generate and every step in between. The key is to start internally. When you create an environment where employees are happy, productive, autonomous, and passionate about what
they do, they’ll provide better service to your customers. That amazing service will create many loyal customers, leading to sustainable growth and profits. That’s why it’s important for every leader in an organization to understand the service-profit chain and how each step impacts the other. Key Employee Engagement Strategies Organizations need to pay attention to specific priorities to engage employees. Employees are more likely to become truly engaged and involved in their work if your workplace provides these factors. Employee engagement must be a business strategy that focuses on finding engaged employees, then keeping the employee engaged throughout the whole employment relationship. Employee engagement must focus on business results. Employees are most engaged when they are accountable and can see and measure the outcomes of their performance. Employee engagement occurs when the goals of the business are aligned with the employee’s goals and how the employee spends his or her time. The glue that holds the strategic objectives of the employee and the business together is frequent, effective communication that reaches and informs the employee at the level and practice of his or her job. Engaged employees have the information that they need to understand exactly and precisely how what they do at work every day affects the company’s business goals and priorities. (These goals and measurements relate to the Human Resources department, but every department should have a set of metrics.) Employee engagement exists when organizations are committed to management and leadership development in performance development plans that are performancedriven and provide clear succession plans. When businesses actively pursue employee engagement through these factors, employee engagement soars to a ratio of 9:1 employees from 2:1 employees with concurrent
improvements in the business success. Employee Engagement Examples There are of course many ways to show your employees they are valued, and to keep them focused and engaged on company success. According to Forbes, there are certain items in the benefit package that will help in creating employee engagement: ▶▶ Health Insurance ▶▶ Company Parties (social engagement) ▶▶ Gifts (new luncheons)
babies,
appreciation
Employees go home to different roles–parent, caregiver to a loved one, a church or civic leader, spouse, bandmate, freelancer, artist, neighbor–and the people they are closest to impact their lives and perspectives about work in meaningful ways. Acknowledging those relationships and showing they are a priority will increase employee engagement. How to Improve Employee Engagement In a recent article in Forbes, Brent Gleeson, a former navy seal and successful businessman, gives solid advice on ways to improve employee engagement. When managers are engaged, their team members can confidently state the following: ▶▶ I know what is expected of me and my work quality. ▶▶ I have the resources and training to thrive in my role. ▶▶ I have the opportunity to do what I do best – every day. ▶▶ I frequently receive recognition, praise and constructive criticism. ▶▶ I trust my manager and believe they have my best interests in mind. ▶▶ My voice is heard and valued. ▶▶ I clearly understand the mission and purpose and how I contribute to each. MAY 2018 67
INDIVIDUAL PERFORMANCE
▶▶ I have opportunities to learn and grow both personally and professionally. The steps for improving engagement aren’t complex, they simply must be prioritized. This means engagement must be a core function of the manager’s role. The following steps can help the manager to accomplish this. Step 1 – Put Everyone in the Right Role Again, get the right people on the bus and make sure they are in the right roles. This means that all talent acquisition and retention strategies have to be aligned with meeting company goals. Step 2 – Give Them the Training No manager or leader can expect to build a culture of trust and accountability — and much less improve engagement —without setting the team up for success. This means providing the proper training and development while removing obstacles.
68 MAY 2018
Step 3 – Task Meaningful Work Engaged employees are doing meaningful work and have a clear understanding of how they contribute to the company’s mission, purpose and strategic objectives. Again, this is why they first have to be placed in the right role. I’ve made the mistake of hiring great talent just to get them in the door – but didn’t have a clear career path or role for them. If you don’t sort those details out quickly, they will leave. Step 4 – Check in Often The days of simply relying on mid-year reviews for providing feedback are long gone. Today’s workforce craves regular feedback — which of course leads to faster course correction and reduces waste. Use both formal and informal check-in strategies — and use them every week. Step 5 – Frequently Discuss Engagement Successful managers are transparent in their
approach to improving engagement — they talk about it with their teams all the time. They hold “state of engagement” meetings and “engage” everyone in the discussion — and solutions. Again, these principles are not complex, but must be prioritized. Companies that get this right will drive greater financial returns, surpass their competitors, and easily climb to the top of “the best places to work” lists. Are Your Employees Engaged? Employee engagement is critical to the success of any business. When a business has engaged and invested employees, it is in their best interest to protect the productivity and profitability of the business, and the image the business has in the community. Engagement also results in employee retention, which saves the business money in turnover and training. There is no downside to getting your employees engaged and invested in your business.
PERFORMANCE LABS
THE GO-TO SOURCE FOR PERFORMANCE IMPROVEMENT IN UTILITIES
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INDIVIDUAL PERFORMANCE
THE PROS AND CONS OF TODAY’S APPRAISAL METHODS MICHAEL BUNGAY STANIER
e use ratings in our daily lives more often W than you might expect. We look to Yelp for restaurant ratings, to Rotten Tomatoes for movie ratings; we can even find ratings on medical doctors and university professors. We ask people to rate our seminars and training events. Everywhere, ratings have snuck into decision-making processes in our everyday lives.
At work, ratings have long been part of the formal appraisal process. Traditionally, managers meet with their employees once (or twice) a year for a performance review and assign ratings on key performance points. However, many workplaces are now opting to forgo these annual meetings for more frequent, less formal feedback sessions. For some, this means dropping ratings altogether; for others, it means a less visible form of ratings. There are pros and cons to each method, and it’s up to managers to ultimately decide how to best help their employees succeed. Formal Ratings Just like with movie reviews, formal ratings assigned at an annual review likely don’t take into account all of the content. Often, too much emphasis is put on the most recent events. So if a recent negative event is top of mind for the manager, the employee’s success of six months earlier will not be as prominent. As such, there’s a good possibility of conflict — some push and pull — during the meeting 70 MAY 2018
(after all, it’s a human being who’s being rated). Still, the formal yearly rating process, or review, provides dedicated time for manager and employee to discuss career points, as well as areas of achievement and improvement. Formal ratings require strong assessment on the manager’s part, and they keep things transparent — both of which are pros. In the best cases, these ratings work to motivate employees to reach the highest level, and to show them a clear path to success and promotion. In the worst cases, they cause anxiety and stress on both sides, and involve a lot of time and energy. Shadow Ratings With shadow ratings, there are still performance ratings, but they aren’t shared with the employee. This method lacks transparency and doesn’t provide employees with a clear understanding of what they need to do to succeed in their careers. This type of appraisal does, however, require less time and energy on the manager’s part, and creates less conflict between manager and employee. Shadowy Ratings With shadowy ratings, no specific rating is provided to the employee, but the manager’s sense of their performance does affect their pay. This approach is a much less formal process than the annual review, and since
the manager keeps some level of rating top of mind over the whole year, less time is spent agonizing over THE meeting. But there’s also much less discipline in how managers assess performance. It’s difficult to track real success in a linear way, which means that it’s also difficult for managers to give an employee concrete examples showing the track to follow to a promotion. No Ratings Increasingly, there is discussion of doing away with ratings altogether. In those cases, pay raises are based on seniority (which is easy to track and easy to explain), rather than on performance. But when pay rewards aren’t tied to performance — well, that has its own problems. As you can see, each method has its pros and cons. Whichever you choose, tweak it to fit your employees as best as possible (it doesn’t need to be perfect). Yes, we rate restaurants and movies, but does that mean we should rely on ratings as an accurate measurement in the workplace? Perhaps instead of focusing too deeply on appraisals, relying solely on ratings as an accurate measurement in the workplace, managers should concentrate on having more frequent feedback conversations, which will lead to better performance and, in turn, career development.
INDIVIDUAL PERFORMANCE
HOW ENGAGING DISENGAGED LEADERS WILL IMPROVE EMPLOYEE ENGAGEMENT BRENDA BERG
seems as though there are too many Iaretmanagers out there that seem to believe there only two ways in which a business can be run, and a team led. They can either be highly engaged with the business that they work for, but therefore sacrifice the ability to connect with the employees or get on really well with the employees, but don’t engage with the business on the level that they should be.
It seems to be a one-or-the-other kind of culture when it comes to engaged managers, but this doesn’t have to be the case. Finding a balance between being engaged with the business and the employees is no easy feat, but essential if you want your business to thrive. In fact, only 9% of managers surveyed in a 60,000-strong management pool were able to display this kind of balance. Not sure how to transform your unengaged manager into balanced and comprehensive leaders? Here’s everything you need to know. The Employee Perspective Firstly, let’s take a look at how the employees in a business are managing under this kind of unbalanced leadership. Forbes recently published information on a Gallup survey of over 150,000 workers in the US and found some pretty surprising results. Here, it was discovered that an incredible 52% of employees are ‘disengaged’ with the business they work for, as well as describing themselves 72 MAY 2018
as ‘emotionally disconnected’ and ‘not willing to do more than necessary’ in order to keep their jobs.
more engaged they’ll be with your business explains Sharon Harper, a team leader for Big Assignments.
Of course, if 52% of your employees are simply doing the bare minimum and aren’t pushing the boat out when it comes to working hard or even trying to develop a good work ethic, your business is only going to be 52% successful.
Be Inspiring
However, as State of Writing rightly points out, you can’t be there every step of the way to ensure that your employees are pulling their weight, which is why it’s important for your managers to step up to the mark. In this next section, we’re going to talk about ways in which you can balance out your managers and, therefore, re-engage your employees naturally. Build a Trusting Relationship If you’re working 8 hours a day for five days of the week, that’s a total of 40 hours that you’re spending with your colleagues, employees and managers, and it’s safe to say that the relationships that you have with these people matter. The stronger your relationships are with your management team, the better they’ll perform for you. “Get the managers in your business to learn that you trust their judgement and give them a responsibility for them to manage, allowing you to build up an honest and productive relationship with your line managers. The more responsibility a manager has, the
As a leader, if you’re able to inspire the managers who are working for you, they’ll become far more engaged in your business and will feel motivated to want to achieve more. If you’re asking them to carry out a certain task or project, give your managers the reason ‘why’ you’re asking them to do that, once again imparting responsibility and knowledge, building up your relationships. People thrive on the fact that what they’re doing makes a positive difference and that their skills and talents are being put to good use. By giving your managers a worthwhile purpose, they’ll be far more engaged in what they’re doing, something that will rub off on your employees. Be a Team, Not a Chain of Command “Although it’s vital that a chain of command is followed within a business” exclaims Jennifer Pierson, a team building coach working for Academized. “It’s so important that every single manager and every single employee remembers that everybody is on the same side and working for a common objective, not a free-for-all where one person will come out on top.”
INDIVIDUAL PERFORMANCE
This means rooting for your team players and helping them to overcome problems and being there for them when they have a question or need to learn about something. Youâ&#x20AC;&#x2122;re all here to help each other. This has been a proven technique that works for businesses of all model, from writing services like Paper Fellows to huge, global businesses, such as Virgin, or even Facebook. Again, this will naturally then pass through
your managers and onto your employees. If a team ethic is instilled at all levels of the chain of command, everybody will have your business in their best nature which will dramatically improve engagement rates among your employees. Conclusion There are so many ways that you can reengage your managers into your business and
therefore reengaging your uninterested and unengaged employees as this only scratches the surface of what you can do. Remember to be on the same side of your managers and encourage them to do the best they can. Whatever kind of attitude and treatment you give your management level staff, this will be passed onto your employees, helping your business to be the best it can possibly be.
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BALANCED SCORECARD
THE BALANCED SCORECARD VS. THE EFQM EXCELLENCE MODEL MARCELA PRESECAN
o companies worldwide thrive in D today’s business environment or do they strive for survival? Over the past decades
we have witnessed both the rise and fall of organizations, that either found the necessary tools to achieve performance, or they did not. Ultimately, there is the self-governing tournament that takes place, a contest for performance supremacy due to the increasing competition in the market. Technological advancements and output expansion have urged both new and knowledgeable enterprises to either innovate for performance, or improve their existing strategic framework to stay on top. Fortunately, a growing number of performance management tools and business improvement models have lead to the belief that the battle for meeting competitive requirements on the market has not been completely lost. Performance management tools do not necessarily provide a unanimously accepted formula for success, but they are the product of extensive macro and micro-economic analyses, that have identified the need for non-traditional performance measures that translate into strategy. Overcoming traditional financial reporting, as the most accurate reflection of the business outcomes vs resources ratio, has not been an easy path to follow. 74 MAY 2018
However, comprehensive studies on the subject reveal the fact that management accounting systems are no longer appropriate for measuring performance. Yes, they veraciously reflect past performances, but they are not consistent with present and future business realities. In short, the financial overview in bookkeeping records has no predictive power over future performances. The integrated performance management tools of today provide a model for how businesses should relate performance indicators, not strictly financial indicators, to the strategy and short term vision. Two of the more wide-ranging frameworks developed are Kaplan and Norton’s Balanced Scorecard and the EFQM Excellence model, developed by the European Foundation for Quality Management as an initiative to counteract the Japanese domination of global markets. The questions we want answered here are: Should businesses use one model or the other? Do these two frameworks work independently from one another? How do we put these tools to work? The EFQM Excellence Model One advantage of the EFQM Excellence Model is that it provides a common language for organizations to retrieve performance insights from the outer business environment. Its purpose is
to provide a systems perspective for understanding performance management. It uses knowledge networking to link organizations which operate globally, across various industries, and provides feedback on their performance results. The EFQM framework is based on 8 fundamental concepts of excellence: customer focus, people development and improvement, management by process and facts, partnership development, leadership and constancy of purpose, continuous learning, innovation and improvement, result orientation and corporate responsibility. This non-prescriptive operational model is structured on two criteria: the “enablers” and the results. The “enablers” ensure ways to assess what is being done, while the results provide a view on what has been achieved. According to the EFQM model, the five key enablers of excellence are: leadership, policy and strategy, people management, resources and processes. The four results criteria are: people results, customer results, society and business stakeholder results. The model has a dynamic structure, in which innovation and learning must be continuously present to optimize the “enablers”, so that they lead to improved future performance results.
BALANCED SCORECARD
Kaplan and Norton’s Balanced Scorecard Kaplan and Norton’s Balanced Scorecard uses a four perspective approach on performance management. The Balanced Scorecard provides executives with an architecture that translates the organizations’ strategic objectives into a coherent set of measures that drive performance. The purpose of the balanced scorecard is to help communicate and implement an organization’s strategy.
any insight on what strategies should be adopted in order for improvement and performance to be achieved, and does not mention target performance. On the other hand, by evaluating the result criteria of the EFQM model, an organization can get a view of how the “enabler” criteria performed. Within the EFQM model, innovation and learning is mentioned as a fundamental issue for performance achievement, but employee satisfaction is not fully addressed.
To complement the financial perspective, the Balanced Scorecard introduces three additional non-financial measurement categories: customer satisfaction, internal business processes, learning and growth. According to the Bain & Company “Management tools and trends 2013” survey, the Balanced Scorecard ranks fifth in importance, while strategic planning stands out as the most important management tool of the year 2012.
The Balanced Scorecard links key performance indicators to strategic objectives so as to clearly formulate strategy. However, it provides little information on how key performance indicators should be placed in the balanced scorecard perspectives. But the balanced scorecard is a non-prescriptive model, which means that organizations can design this performance management tool to suit their particular situation.
The major strength of the Balanced Scorecard is that it articulates business vision and strategy, while ensuring companywide acceptance of the performance measures enabled to achieve the overall desired performance for the organization.
The obvious benefit a balanced scorecard ensures is target measurement and setting. It allows for companies to compare past results with actual ones and set performance
targets for future achievements. No employee reward structures are present in the balanced scorecard, but it does emphasize the importance of cascading strategic objectives to business units and further, to the individual level, while suggesting the need for a compensation system that links the individual to strategic measures. Both of these options are two popular performance management tools that feel different and alike, at the same time. The EFQM framework tries to improve organizational performance through quality, but often times, the practice of the Balanced Scorecard reveals entirely new processes a company must excel in. Both approaches regard performance as a management process that links strategy to operations and product quality. Rather than independently working on performance, by using these two approaches separately, complementing one with the other in the same organization might bring us one step further to performance excellence.
Which one is the better option? A short comparison between the previously described performance management tools should be focused on how each of these two models answer the question of strategy formulation and execution, how do they go about setting targets and evaluating performance and how do they formulate reward for performance achievement. The EFQM Excellence Model is based on the concept of total quality management. It was created to provide management assistance on how to use total quality concepts, in order to increase effectiveness of decision making and promote change initiatives of maximum impact to stakeholders. It provides an opportunity for organizations to assess themselves, firstly by understanding their current position and secondly by pursuing continuous improvement and achieving performance success. The EFQM model, however, does not offer MAY 2018 75
ASK THE EXPERTS
ASK THE EXPERTS
13 ELEMENTS OF A GOOD KEY PERFORMANCE INDICATOR
TOR INGE VASSHUS
W
hat is a Key Performance Indicator (KPI)? The answer depends on who you ask. For most IT and business intelligence people, a KPI is simply a number representing performance for a specific process, domain, or subject. If a KPI is just a number, it is nothing more than a measurement system. It should be self-evident that measuring something won't change it. But a KPI is more than a measurement or a number. It should tell a performance story.
76 MAY 2018
Before we look at what elements comprise good KPIs, we need to understand how and why KPIs are used. Companies typically use KPIs for one or more of the following reasons:
▶▶ Control - employees need to be continually managed to perform optimally ▶▶ Ensuring that the organization is moving in the right direction
▶▶ Drive change - motivating the workforce, or creating a 'burning platform' ▶▶ Monitoring value drivers- analyzing where value building opportunities exist ▶▶ Driving competitiveness- engaging top performers to perform even better, and motivating underperformers to improve
ASK THE EXPERTS
▶▶ External reporting - outside world expects key figures and results
8. Initiatives to improve performance and reach the defined target set for the KPI
▶▶ Decision support- making data driven decisions, resource optimization
9. Value driver trees, if the KPI is part of a value driver model
▶▶ Basis for reward and compensationemployee pay for performance
10. Governance rules – what will happen if KPI is not performing? Will there be notifications, processes to initiate escalations, approvals?
When we look at what lies behind some of these concepts, such as 'motivating the workforce,' we can see that a number alone will not provide motivation, but rather a measure and a target. If a system of control is developed through KPIs, the system can become oppressive if there are no means to solicit help, or create a roadmap to improve performance (additional resources, improvement initiatives, etc.). If a decision support system is put in place, users need the right data granularity, and the guidelines or context for making the right decisions. All of these reasons have an underlying story, and top performing organizations are able to clearly communicate that story to their employees.
11. Analytics – what has caused the current performance level? You should be able to explore and analyze the performance as well as perform “what if ’s” and conduct even more analysis to gain knowledge on where resources should be allocated to improve performance 12. Risk factors and risk mitigation plans – every KPI can be subject to unexpected risks. What are they? What can we do to mitigate the risk factors, if they occur? 13. Linkages to overall business context – no KPI stands alone. It is a part of a larger context, such as a process or a part of a strategy.
Not every KPI must have all of these 13 elements, but certainly, every element should have been considered. At Corporater we believe that ‘a KPI is more than a number’, and that is why we enable our customers to use the rich Business Management Platform to tell their unique KPI story. About the author Tor Inge Vasshus is an all-round Enterprise Performance Management professional:
▶▶ An experienced practitioner of management methodologies such as the Balanced Scorecard ▶▶ Consultant and advisor to enterprises using these methodologies ▶▶ Dynamic speaker on performance management at conferences and universities worldwide ▶▶ An innovative software solutions provider to enterprises that aspire performance excellence.
13 Elements of a good KPI: 1. Quantitative aspects of the KPI such as actual, target, and best performance 2. KPI card with description, owner, data source, frequency, intention, thresholds, and much more 3. Charts showing the visual performance history across time 4. Analysis that shows the build-up of data or metrics from which the KPI is derived – this is often displayed via “drill down” capabilities 5. Benchmarks to see show how an entity is performing compared to competition (or as compared to internal benchmarks) 6. Written assessments from the KPI owners as they evaluate performance 7. Corrective actions to get back on track if performance has deviated
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LIFESTYLE
LIFESTYLE
FOCUS – THE KEY SUCCESS FACTOR FOR BOOSTING PRODUCTIVITY CEZARINA BĂRBIERU
ne quick glance around business offices these days and you O might notice that the simple activity of focusing has become one of the most demanding actions to be undertaken while at
work. Reducing it all to the most common denominator, we can see that nowadays, employees face an increasing daily bombardment of audio-visual distraction techniques. Daniel Goleman, author & science journalist, has reported that the wide variety of gadgets, text messages, or e-mails can be certainly perceived as threats, who’s opinion is that focusing represents the most important key success factor in our professional lives. Most of the times, focusing implies not only gathering all your attention on a specific action, but it also remaining focused on that particular task for as long as it takes to finish it. The digital environment has a huge impact on our brains and, most certainly, on our ability to focus as well. Although our brains are attuned to distraction, the environment plays
78 MAY 2018
the most important role on focusing. Goleman also states in his work entitled “Focus, the Hidden Driver of Excellence“, that our ability to try to ignore the audiovisual techniques is diminished by the “cognitive exhaustion” they cause. Therefore we have to search for ways to be focused, otherwise we will not be able to concentrate anymore. Mindlessness represents the condition when your thoughts are always wandering, and when it’s very difficult to concentrate. Its opposite, the mindfulness, represents its “cure,” so as to say, because it implies training your brain in order to focus on a certain situation. Although our capacity to apply full attention represents a great mental asset, some steps need to be followed in order to help our brains get highly focused. In this sense, Goleman identifies three types of focusing:
LIFESTYLE
1. Inner focusing;
2. Other focusing;
3. Outer focusing.
in order to improve concentration. The hierarchy of getting things done has to follow several stages, as Nadia Goodman states, in order to raise your concentration power: This “triple-focus”, in Goleman’s terminology, regards self-awareness (inner focusing), empathy (other focusing) and the environmental awareness (outer focusing). One of the best methods that helps developing concentration is the “singlepointed concentration.”
▶▶ Do the creative work first. One of the secrets of focusing consists in using your brain’s fresh power for doing the creative part of your work first. Creativeness implies developing your brain’s resources and improving your concentration for the analytical tasks.
Focusing on one single action at a time could easily improve your ability to focus. This method also implies keeping a positive attitude and enhances the capacity to remain focused and to be productive.
▶▶ Manage your time by a correctly allocation. Researchers have found out that people are truly focused for an average of only six hours per week, and that almost 90% of people are at their highest cognitive point outside the office. Of course, those six hours have to be very clearly allocated to the most relevant tasks only, especially since some of us focus best in the morning
Goleman displays the ability to focus as a mental muscle which has to be trained by both physical and psychological exercises,
and others late at night. ▶▶ Train your mind. Our brains are usually unfocused because we train them to be unfocused. The brain certainly adapts quickly to multitasking, so practicing concentration by focusing our attention on a single task should be the best method. Getting organized by cleaning your workplace and prioritizing your tasks also leads to concentration improvement. Organizing plays a fundamental role in achieving concentration and in reaching the highest efficiency levels you are capable of. Staying motivated by permanently setting a purpose for your work and permanently evaluating your productivity level will certainly lead to higher levels of personal performance. MAY 2018 79
LIFESTYLE
MIGRATING FROM ORGANIZATIONAL TO PERSONAL PERFORMANCE. USEFUL OR NOT? DIANA ZĂRNESCU
ver since Performance Management has made Eresistance its entrance into the world stage, a stubborn towards it continues to persist. How far are we going to take this process? Where will it stop? How many more levels of our lives will it invade any further? These are just some of the questions that reluctant voices continue to raise. However, the true question we should be asking ourselves is: how long are we able to survive in the harsh environment of today if we don’t change our approach? To what extent do we consider ourselves to be ambitious, competitive, SMART? Nevertheless, the voices of non-believers are quieting down, as direct evidence of success with Performance Management systems emerges to the surface, clearly showing us all that this is the right path towards the future. If, by now, it is more than clear for most companies that, sometimes, the future holds little in stake for them unless they 80 MAY 2018
implement a Performance Management system, how clear is the need to have different performance-related elements applied to our personal lives? How many of us want to return home, drained by the long working hours, only to resume measurements, monitoring, evaluating? The most frequent quarrels people have with Performance Management systems are related not to the results obtained through its use, but to the effort and energy that go into making such a system truly function. Therefore, a line must be drawn: what are we throwing out the window and at what costs? If the results are positive, are we then rejecting a useful system only for the extra time it requires to obtain these outcomes? Are we scared of the meaning conveyed by a continuous process, which is, in fact, what performance management, whether personal or organizational, presumes? Undoubtedly, we are, to some extent. However, we also are fighters, otherwise,
we wouldn’t strive to improve, we wouldn’t have plans for a better future, we wouldn’t be able to call ourselves human, unless we always wanted to become superior versions of ourselves. Then, from this perspective, is it truly farfetched to embrace personal performance tools and techniques as means that were created for the sole purpose of improving a process? They are not. It is all a process which sets order and discipline while also optimizing and improving the time we spend with our families, the budgets we allocate to our holidays, households, education, and the projects we embark on with the purpose of becoming better selves, such as diets, exercise routines etc. That is what performance management ultimately translates into. It takes the dream of something better and it shows you the path towards it. From this perspective, can you still deem it too invasive?
TIME MANAGEMENT AND PERSONAL DEVELOPMENT â&#x20AC;&#x201C; A BALANCING ACT NATALIA NISTOR
etting up early, spending 40 minutes G on physical exercises, over 2 hours a day on e-mails and texts,
30 minutes per day, one hour, or even more. Regardless of the amount of time allotted, we should find the time for ourselves.
around 2 hours and 45 hours per day in meetings and conference calls, 1 hour and 45 minutes per day on tasks and projects, and allotting 30 minutes to personal development.
One way of going about it would be to start asking ourselves what else we are interested in, apart from work and what we would like to learn in order to develop ourselves, personally wise. Then, we should start setting bigger or smaller personal goals (learn a new language, sign up for a photography course, read that book that has been waiting on the desk for weeks).
That is how we could sum up the data of a recent survey conducted by The Center for Management and Organization Effectiveness among successful executives from top companies in North America, such as Adobe, Bank of America and Google, just to name a few, in order to find out how they manage their time. When you think of it, have you felt at least once that you cannot ever catch up on your tasks and plans? That you cannot get things done in due time, that you are falling short of time?
management plans, time management solutions, they are all meant to help us organize our time, this valuable resource that can easily be wasted if we are not mindful about the way we allocate it.
In the current business environment, achieving good performance usually entails being a good time manager, and it generally means doing your work efficiently and effectively. Time management is paramount in order to succeed and perform well in any activity. For some people, even the sound of this word is a chore, while trying to stick to a time management plan is considered something beyond the bounds of possibility.
Pressure, frustration, stress factors. We face them daily. Since work takes an important amount of our time every day, but also a lot of our energy, we find ourselves in the position of finding the formula that could help us solve the work-life balance equation.
Making the most of the time we have is essential both at our workplace and outside work. Daily logs, schedules, time
With these in mind, we should consider benefiting from time management, not only in our professional life, but also in our personal life, so as not to leave us dragged out by fatigue, laziness and idleness, once we finish work. We should try to achieve something for our personal development.
Perhaps the most important stage is to monitor the progress and achievement of those established goals. Ideally, we should start by doing one thing at a time. Focusing on reaching several objectives can prove to be tiresome, and then, eventually, we will be tempted to abandon them one by one. Along with the solution, most of the time, we need to find our self-motivation that could take us from planning to action. Motivation plays an important role, and we must keep in mind that life satisfaction, health and well-being are as important as any project deadline that has to be met, and we must be mindful of how we go about it. With all these, the good thing is that a new day means another shot at doing something useful and for your own personal benefit in those 24 hours. How about starting with tomorrow?
HARDWARE REVIEW
HARDWARE
DataTraveler Ultimate GT
The World’s Highest Capacity USB Flash Drive With Kingston's new DataTraveler Ultimate GT, you can carry more than you can handle. Or alternatively, you might discover that you can handle more than you think, because this flash drive has a staggeringly high storage capacity and a pretty fast copy speed. The Kingston DataTraveler Ultimate GT is the world's highest capacity USB flash drive. It is available in the US in 2TB and 1TB capacities, which currently cost between $1,600 and $1,000. This flash drive is ideal for anyone who wants to transport large amounts of data without relying on hard drives or cloud storage. If you want to better wrap your head around its actual storage capacity, you should know that the highest capacity iPhone 7 Plus has just 256GB of storage, about a quarter of 1TB. On top of the high storage capacity, the new drive is USB 3.1 Gen 1 compatible, which means excellent reading and writing performance. The new drive is made of a robust zinc-alloy metal casing for shock resistance, so you do not have to worry about its durability. However, although it looks and works like a thumb drive, it is about three to five times the overall size of a typical USB drive. Due to this, it might not fit directly in most USB ports, so Kingston has included an extension USB cable to make sure you can use it everywhere. Nevertheless, GT truly is the fastest thumb drive on the market, using a USB 3.0 that registered sustained copy speeds of 165 megabytes per second for writing and 327MBps for reading. What is more, the GT also works with older USB 2.0 ports, although you will notice a decrease in speed. Its biggest downsize is the price. Its average buying price hovers around $900, with a MSRP of $1.319 and a low price of $846, on the best of days. Despite its pricing, nobody can deny that the Kingston DataTraveler Ultimate GT is one of a kind, due to its huge storage capacities and considerable speed.
82 MAY 2018
The Jabra Evolve 75e Bluetooth earphones
Offices can oftentimes be noisy, other times rowdy, and on occasion down right impossible to work in. One company, Jabra, is set to change all of that and give office workers some peace of mind. Through its Jabra Evolve 75e Bluetooth earphones set, the company aims to boost productivity in all areas of specialization, where deep focus separates goods results from poor ones. The company notes that their earphones are the world’s first professional UC-certified wireless earbuds, making them the ideal device for carrying out calls anywhere, from your office, to your local park, without experiencing tangled wires or having to deal with UC setups. The Jabra Evolve are very user-friendly, given that the headset can connect to any of your smart devices – from smartphone, laptop or desktop, via Bluetooth and a USB plug. Once plugged in, you can jump straight into calls, as it does not require supporting apps or software. However, a TechRadar article noted that from time to time, the Jabra Evolve’s Bluetooth connectivity would seemingly drop out of the blue; nonetheless, this minor incident should not be interpreted as the gadget’s inability to use Bluetooth connections appropriately, as during testing, it wasn’t revealed why it sometimes dropped connections. In addition to this, the headset more than makes up for this by boasting a very compact & comfortable design, as well as long battery life – up to 14 hours, as per the company’s statement. So if you’re someone interested in managing calls anywhere, on the fly, be sure to give these a try.
HARDWARE
Samsung Flip
Meetings with a Twist! Samsung has set out to bring yet another layer of innovation in business performance, this time by trying to further improve and streamline collaboration, via their Samsung Flip digital flip chart display. Samsung’s Flip allows four different users to embed content or annotations directly on its screen, at the same time, using either fingers or specialized pens. In this manner, anyone can customize their writing as they please – you change fonts, styles, sizes and colours, all the while keeping everything completely visible via its generous 55 inch UHD resolution. For even greater interactivity, the flip chart allows for extensive device compatibility, through wireless connectivity, USB, PC, as well as mobile ports. Furthermore, the Flip’s integrated screen-sharing functionality lets it redistribute content available on its display, onto any connected PCs, smartphones and tables, without any sort of delay or reduced visual quality. In the same vein, you can also upload your own materials from personal units, onto the Flip, thus bringing new ideas into the foray even easier, as the display is equipped with its own 8GB of internal storage.
In addition to this, Flip users can access up to 20 pages of writing space, with fully integrated search options that allow users direct access to specific content. No more wasting time flipping through dozens of sheets of paper or waiting for that large file to load its search results. As many would expect, you can configure its display, so that it’s either portrait or landscape, depending on your needs, and if the meeting requires, you can put the Flip anywhere, from right in the middle of the business boardroom, to somewhere up high mounted on a wall. Seoggi Kim, Executive VP of Visual Display Business at Samsung Electronics, noted that the drive behind this initiative was motivated by the fact that: “the often-flawed logistics of the modern meeting make it easy for participants to feel disengaged and for vital ideas and discoveries to become lost. Today’s workers require more powerful and flexible technologies, and we truly believe that our new Samsung Flip display offers endless possibilities for driving impactful collaboration.” MAY 2018 83
SOFTWARE REVIEW
SOFTWARE
TeamViewer
Fast, Efficient and Appealing TeamViewer is a tool that lets users connect to multiple workstations remotely. Even though there are a number of similar platforms one can choose from, TeamViewer comes with an extremely powerful and highly accessible system. It is highly popular among individual users and even to large corporations, and it makes things much easier, no matter if you are managing a complex IT infrastructure or fixing a neighbor’s computer without actually going to their location. TeamViewer is ideal for desktop sharing, remote control, and file transfer, as it can easily work behind any firewall or Nat proxy. What is more, while similar applications can be controlled only by a single user, the control of this tool can be passed from one person to another. TeamViewer comes with more than one or two advantages for those businesses that who want to be on top of their IT infrastructure and processes. Here are just a few of the advantages that come with TeamViewer: 84 MAY 2018
▶▶ Swift passing of control from one party to another, which speeds up the workflow and improves productivity. ▶▶ Team sessions enable administrators to manage multiple parties at any given time. ▶▶ Quick and easy file sharing using a drag and drop interface allows users to collaborate and work together in fixing issues. TeamViewer runs under all desktop and mobile platforms, including Windows, macOS, Android, iOS, and even Chrome OS and BlackBerry OS. It also offers a simpler free account for non-commercial use and it has a stylish, attractive and up to date interface. This app is exceptionally well designed, catering to security-conscious professional users. TeamViewer combines remote access and shared meeting features in a single highly secure app, while hiding its complexity behind an elegant interface.
SOFTWARE
Squidex
Screen Recorder Pro
Squidex is a Content Management System (CMS) that enables the user to have total control over his content. The application allows the user to define the structure of his content by enabling him to create schemas, just the way one would edit them as well as fields. Apart from that, the user can also put a set of validation rules in place to ensure the consistency of his content.
Screen Recorder Pro is a highly professional screen recording solution that was designed for any and all user types. This app enables its users to record screen with high-quality audio and save the video in multiple formats, including AVI, MP4, MOV, MKV, WMV, VOB, and WEBM. All the saved videos are exported to the user’s preferred formats without any loss in quality.
The software’s management user interface is simple and userfriendly and it helps the user create and edit the content. However, the Squidex’s rich API is the core of the software. It supports filtering with OData query options and offers the user the ability to create swagger definitions for his content. This makes it easy for the user to integrate his content to the clients, such as a website, mobile app or another server application.
Screen Recorder Pro is a reliable and versatile tool that can record all desktop activities. It is a perfect solution for recording live feeds, video streaming, instructional materials, and more. What is more, users can also add their webcam video into their screencast for that video-in-video effect.
Managing Content with Ease
Squidex implements business constraints and offers a reliable content distribution system. While normal CMS platforms produce a front-end, Squidex was created to deliver the content for a vast range of clients. These include desktop application, websites or mobile applications. The open-source quality of this CMS software is very different from most CMS products on the market. This functionality enables any user to change the system to make it fit his existing processes and workflows instead of having to change the set-up so he can adapt to the system. Squidex’s open source approach, allows developers to configure it and customize the system according to the shifting needs and requirements of the user. What is more, the user can easily build an ecosystem around Squidex, which includes a healthy community and third-party extensions. Squidex provides a single solution to manage all content and those who use it will never have to worry about the vendor lock effect.
The Screen Recording Solution
This app was created by Apowersoft with the intention of offering users a variety of recording modes that suit any purpose. With Screen Recorder Pro one can either choose to go Full-Screen mode to record all activities that happen on one’s computer screen, or one can opt for Custom Area mode if one wants to record only a specific area of the screen. The Around Mouse mode allows users to implement a handson approach, where they can emphasize what they are doing by following the mouse tracker and recording the area surrounding it. Screen Recorder Pro can not only record the screen, but it can also capture the audio from internal and external systems, such as microphones, music players, etc. What is more, this software works well with Skype, MSN, and Google Talk, allowing the user to record screen view using his webcam. The app has two editing tools that, like their name suggests, allow the user to edit his screencast in real time or afterward. Not only that, but this software also makes it easy for the user to add annotations to effectively convey his message or point something out in the video in real time. MAY 2018 85
RECOMMENDED
RECOMMENDATIONS
THE MERCHANT OF VENICE
ne of William Shakespeare's most powerful comedies has O been given a bold cinematic adaptation in this film version of The Merchant of Venice. Bassanio (played by Joseph
Fiennes) is a young and vital member of the aristocratic classes in 16th century Italy; however, Bassanio's impulsive nature and lavish lifestyle have put him deeply in debt, and he will need at least the pretense of wealth if he is to win the hand of the beautiful Portia (Lynn Collins). Bassanioâ&#x20AC;&#x2122;s first instinct is to turn to his closest friend, Antonio (played by Jeremy Irons), a successful businessman, for financial help. However, with much of his fortune tied up in a sailing expedition, Antonio can do close to nothing to help him.
86 MAY 2018
Nonetheless, in order to help Bassanio, Antonio turns to Shylock (played by Al Pacino), a Jewish money lender who lives in Venice's Semitic ghetto. Antonio has oftentimes expressed contempt for Shylock, due to the fact that the money lender abuses his status as one of the most trustworthy lenders in the market, by charging high rates for his loans. Incredulous at his luck, Shylock clearly seems pleased at the ironic prospect of having none other than Antonio as a customer. However, instead of interest, Shylock demands an unusual security on his loan - if Antonio does not repay the three thousand ducats in three months, Shylock will be entitled to a pound of his flesh.
RECOMMENDATIONS
The following is a list of must-haves for your 2018 reading list: 1
3
2
5
4
6
1. Performance Appraisal and Management
2. Bring Your Whole Self To Work: How Vulnerability Unlocks
This text explores common obstacles and why certain performance appraisal methods often result in failures. Using a strategic, evidencebased approach, the authors outline best practices for avoiding common pitfalls and helping organizations achieve their maximum potential.
In today’s work environment, the lines between our professional and personal lives are blurred more than ever before. Whatever is happening to us outside of our workplace—whether stressful, painful, or joyful— follows us into work as well. We may think we have to keep these realities under wraps and act as if we “have it all together.” But as Mike Robbins explains, we can work better, lead better, and be more engaged and fulfilled if—instead of trying to hide who we are—we show up fully and authentically.
3. Supplier performance management: A Complete Guide
4. Performance-Based Strategy: Tools and Techniques for Successful Decisions
By Gerardus Blokdyk
By Steve Fairbanks, Aaron Buchko
Defining, designing, creating, and implementing a process to solve a business challenge or meet a business objective is the most valuable role in every company, organization and department. Unless you are talking a one-time, single-use project within a business, there should be a process. Whether that process is managed and implemented by humans, AI, or a combination of the two, it needs to be designed by someone with a complex enough perspective to ask the right questions.
In Performance Based Strategy, Steve Fairbanks and Aaron Buchko offer a practical set of simple, productive tools that will enable leaders to develop effective strategies. The book offers tools that have been tested in small, medium, and Fortune 100 companies, with for profit and not-for-profit organizations, and across a breadth of industries, such as manufacturing, health care, banking, distribution, transportation, government, and charities, among others.
By Kevin R. Murphy, Jeanette N. Cleveland, Madison E. Creativity, Connection, and Performance Hanscom By Mike Robbins
5. Accelerating Start to Finish: Align 7 Forces for Business 6. Developing a Positive Culture Where People and Performance Thrive Success By Paul Menig
By Marcella Bremer
Business Accelerants™ CEO Paul Menig explains the 7 Forces that are applicable to setting strategy for all companies, large and small. He provides relevant stories on their application and how to scale the effort to the size of your company. As the new Star Wars series continues, may the forces be with you, aligned, and accelerate you from start to finish.
This pragmatic book helps to develop a more positive, productive culture, regardless of your position. Whether you use Interaction Interventions or Change Circles – you can personally influence people through interactions that get copied and become the norm: a positive culture where people and performance thrive.
MAY 2018 87
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Performance Magazine, Printed Edition. Eleventh issue, May, 2018. Content: News. Uber buying into bike-sharing. The Material that can be Programmed to Self-Destruct. The Growth in Workplace Analytics. NASA and Tesla’s great space hunt!. Coworking spaces – maximizing entrepreneurship. HSBC’s looking to expand in China and reduce bureaucracy. CityStasher – Disruptive Businesses and Storage Spaces. Cover Story. Storytelling with KPIs - KPIs that go beyond insights by delivering impact. Expert Interviews: Carmine Bianchi, Professor of Business & Public Management at the University of Palermo, Italy. Christopher Mills, International performance management specialist, United Kingdom. Frank Hajdinjak, CEO at E.ON Romania. Carmen Cucul, EUCAN Business Partner, Customer Experience Strategy at Takeda Pharmaceuticals International AG, Switzerland. Amir Orad, CEO at Sisense, United States of America Portrait. Tor Inge Vasshus. Founder and CEO of Corporater, Norway. Performance Management – A Way of Life. Around the World: Bermuda - on the path of becoming a leader in Government effectiveness. Philippines – between economic performance and human development. Government Performance Management in Malaysia. Government Performance Management in Vietnam. Performance Management Program for Canada’s Crown Corporations. Digital Performance. How to Successfully implement the Internet of Things. 5 Ways Cloud Hosting Is Changing the Business Environment. Why your Web Hosting Plan is Hurting your Website’s KPIs. Balanced Scorecard. The Balanced Scorecard vs. the EFQM Excellence Model. Operational Performance. How RPA is Enhancing the Efficiency of Business Operations. Performance Improvement. Business Simplification – The Key to Innovation and Success. Eight Factors that Contribute to the Success of a Business. Individual Performance. Key Employee Engagement Strategies for 2018. The Pros and Cons of Today’s Appraisal Methods. How Engaging Disengaged Leaders Will Improve Employee Engagement. Ask the Experts. 13 Elements of a Good Key Performance Indicator. Lifestyle. Focus – the key success factor for boosting productivity. Migrating from organizational to personal performance. Useful or not?. Time management and personal development – a balancing act. Hardware Review. The World’s Highest Capacity USB Flash Drive. The Jabra Evolve 75e Bluetooth earphones. Samsung Flip – Meetings with a Twist!. Software Review. TeamViewer – Fast, Efficient and Appealing. Squidex – Managing Content with Ease. Screen Recorder Pro – The Screen Recording Solution. Recommended. Titles to include in your 2017 reading list. Performance Appraisal and Management, by Kevin R. Murphy, Jeanette N. Cleveland, Madison E. Hanscom. Bring Your Whole Self To Work: How Vulnerability Unlocks Creativity, Connection, and Performance, by Mike Robbins. Supplier performance management: A Complete Guide, by Gerardus Blokdyk. Performance-Based Strategy: Tools and Techniques for Successful Decisions, by Steve Fairbanks, Aaron Buchko. Accelerating Start to Finish: Align 7 Forces for Business Success, by Paul Menig. Developing a Positive Culture Where People and Performance Thrive, by Marcella Bremer. Movie. The Merchant of Venice. Keywords: Key Performance Indicators (KPIs). Balanced Scorecard. Performance Management. Performance Measurement. Strategy. Employee Performance Management. Personal Performance Management. Balanced Scorecard Management System Performance. Measurement. Management. Business Intelligence. Education. Solution. Problem-solving. Decision-making. Project Management. Project Planning. KPI Selection. KPI Documentation. KPI Evaluation. Data gathering. Data presentation. Expert Interviews. Academics. Consultants. Events. Research. Mission. Vision. Strategy. Best know-how. Data and Facts. Common Sense. Data Accuracy. Performance Magazine Focus Categories: Editorials. Articles. News. Interviews. Multimedia. Strategy. Balanced Scorecard. KPI. Organizational Performance. Operational Performance. Individual Performance. Personal Performance. Around the World. The KPI Institute’s Professional Certification Programs. Certified Strategy and Business Planning Professional. Certified KPI Professional and Practitioner. Certified Performance Improvement Professional. Certified Employee Performance Management Professional. Certified Personal Performance Professional. Certified Data Visualization Professional. Certified Data Analysis Professional. Certified Benchmarking Professional. Certified Supplier Performance Professional. Certified Customer Service Performance Professional. Certified Innovation Performance Professional. Certified Balanced Scorecard Management System Professional.