Tag Archives: performance management

Performance Management and Accountability

Performance Management and Accountability

GUEST POST from Geoffrey A. Moore

Accountability begins with a voluntary commitment to put yourself in service to bringing about an outcome. To frame this effort for you and your team, I have found Salesforce’s V2MOM management system to be an invaluable tool. In that context:

  1. Vision describes the outcome you are all in service to.
  2. Values shape the approach you will all take to bringing it about.
  3. Methods present what each one of you will do to achieve the outcome and are assigned to single accountable leaders.
  4. Obstacles call out the challenges the leaders anticipate having to deal with, and
  5. Measures are the objective signals that everyone will use to assess your degree of success.

Performance management begins with securing each individual’s voluntary commitment to the outcomes associated with their jobs to be done as well as to the values to be honored while doing it. It then moves on to review their methods, obstacles, and measures to test them for coherence, feasibility, and credibility, and to ensure each person is confident they are set up to succeed and that they want to be held accountable for that success. The day-to-day work of performance management consists of inspecting, detecting, dissecting, course-correcting, and resurrecting the stream of work to keep it on track. Most of this effort consists of self-management, supported by regular check-ins with the team leader and quarterly reviews with the higher-ups. The majority of the work is focused on the near term, but this must be balanced with investments in the mid and long-term for sustained success.

That all said, that is not what most people think of when you bring up the topic of performance management. Instead, they associate it with a mandate to manage out under-performers. The word under-performer has unfortunate connotations, and this has cast a cloud over the entire effort.

To set things straight, begin by realizing that everyone is an under-performer at something. If you are unsure about what you personally under-perform at, just ask your spouse or your children, and they will let you know. The point is, there is no shame in under-performing per se. We just don’t want to persist in it.

When it comes to the workplace, under-performance shows up as a series of repeated shortfalls in our measures despite our best efforts to overcome our obstacles by course-correcting our methods. To ignore these signals without taking remedial action is to fall prey to Einstein’s definition of insanity, namely, doing the same thing over and over again and expecting a different result. Instead, one needs to intervene by invoking the “horse, rider, trail” principle. The horse is the offering, the rider is the person accountable for its success, and the trail is the target market. Changing any one of these factors will materially alter the dynamics of the situation such that you can expect a different result. Just understand that you probably won’t get to do this more than once, so choose wisely.

Finally, understand that while everyone is an under-performer at something, they are also likely to be an overachiever at something else. As a manager, you should act as a steward of your team members’ careers. If they are not the right fit for the job they are in, then both they and you need them to move on. Under-performing in this context is just nature’s way of telling us we are playing the wrong position, perhaps even playing the wrong game. Nobody likes to under-perform, and nobody is served by it. Meanwhile, our world is a needy place, so the sooner we can get people into their right roles, the better we all shall be.

That’s what I think. What do you think?

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Exploring Performance Management

Exploring Performance Management

GUEST POST from Geoffrey A. Moore

Performance management is a tool for managing Performance Zone commitments. These are the outcomes and deliverables that your organization, or for that matter you yourself, are being funded to deliver. In the Vision, Value, Methods, Obstacles, and Measures (V2MOM) framework, they will be represented by one or more of your Methods and will be tied directly to a corresponding set of Measures.

The primary goal of performance management is to ensure success in meeting such commitments. This includes early detection of things going off track—hence the need for frequent check-ins. It includes coaching and mentoring to help team members succeed—something we all need at one time or another. It asks us all to balance empathy for times when people don’t succeed with accountability for the need to succeed. People need help when they are down, but it is not fair to continue to accept funding for outcomes that do not get delivered.

When people under-deliver against their commitments, nobody wins. Most importantly, and this is something a lot of people miss, the person who is under-delivering is not winning. When coaching and mentoring are not getting them to success, the likelihood is that they are in the wrong role. Keeping them in that role, which we sometimes think of as protecting them, just prolongs the agony. A far better response is to step back and assess what would be the right role for this person, whether it be another one on the same team, or one on a different team, or one in another organization, or one in another company. The point is, rather than obsessing about what they are doing badly, we need to focus instead on what they could be really good at and get them into that role as swiftly as possible.

Let me be even more clear. It is obvious that when under-performing folks are kept in a role, everyone else on the team has to work harder. What is not so obvious is that when under-performing folks move on, even if their roles are not back-filled, the team discovers it has less work to do! The reason is that under-performing people absorb everyone else’s time. After all, they are trying to help, they just aren’t succeeding. And since helping teammates is baked into collaborative cultures, we give them extra time even though it is not productive to do so.

Again, nobody is winning here. We need an intervention. In this context, policies that call for managing out the bottom five percent are simply a heuristic that says, in any organization at any time, there are bound to be some number of round pegs in square holes, and leaving them in place doesn’t help anyone.

So, why then do we still bristle at the notion of performance management? There’s a ton of psychology behind this question, more than I am competent to address, but the net effect is that performance management puts enormous pressure on a set of social skills many of us lack. That’s not going to change anytime soon, so we should not be surprised at our reluctance to engage. But it is not OK to dodge our responsibilities either. Our best bet, in my view, is to bake into our protocol a discussion of positive next steps that includes concrete recommendations, and cope with our emotional challenges as best we can.

That’s what I think. What do you think?

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Key Performance Indicators for Innovation

What to Measure

Key Performance Indicators for Innovation

GUEST POST from Chateau G Pato

Innovation is crucial for sustaining growth, competitive advantage, and relevance in today’s fast-paced market landscape. However, managing innovation can be elusive without clear metrics and indicators. Identifying and tracking Key Performance Indicators (KPIs) is essential for steering your innovation efforts in the right direction. In this article, I will discuss effective KPIs for innovation and illustrate their application through two compelling case studies.

Why KPIs Matter for Innovation

KPIs act as signposts that direct an organization’s innovation initiatives. They provide measurable evidence of progress and help leaders make informed decisions. The right KPIs can foster a culture of innovation, hold teams accountable, align efforts with strategic objectives, and ultimately, drive successful outcomes.

Key Performance Indicators for Innovation

Here are some essential KPIs you should consider when measuring innovation:

  • Number of New Ideas Submitted: Measures the volume of innovative ideas generated within the organization.
  • Idea Conversion Rate: Tracks the percentage of submitted ideas that make it through to implementation.
  • Time to Market: Measures the duration from idea conception to market launch, reflecting the efficiency of the innovation process.
  • Revenue from New Products/Services: Indicates the financial impact of innovation efforts by tracking earnings from newly launched offerings.
  • Customer Satisfaction and Adoption Rates: Measures how well the new products or services are received by the target market.
  • R&D Spend as a Percentage of Revenue: Gauges the investment in research and development relative to the company’s overall revenue.

Case Studies

Case Study 1: Google

Google is renowned for its innovative culture and continuous product evolution. Here’s how they leverage KPIs:

  • Number of New Ideas Submitted: Google encourages a culture of idea submission through its “20% time” policy, empowering employees to spend 20% of their time on innovative projects. This KPI helps Google measure its creative pipeline.
  • Idea Conversion Rate: Google’s X (formerly Google X) division focuses on moonshot projects. Out of numerous ideas, only a select few, like Waymo and Loon, get converted and scaled. Tracking this conversion rate ensures that only the most promising ideas get resources.
  • Time to Market: By measuring the time from concept to launch, Google ensures that innovative products reach consumers quickly. For example, the rapid development and deployment of Google Meet during the COVID-19 pandemic showcased this KPI in action.
  • Revenue from New Products/Services: Alphabet, Google’s parent company, closely monitors the revenue generated from new ventures like Google Cloud, which shows the financial fruitfulness of its innovation efforts.

Case Study 2: 3M

3M is an iconic innovator, known for products like Post-it Notes and Scotch Tape. Here’s a look at their KPIs:

  • R&D Spend as a Percentage of Revenue: 3M allocates approximately 6% of its revenue to research and development. This KPI underscores their commitment to continuous innovation.
  • Revenue from New Products/Services: 3M tracks the percentage of sales from products launched in the past five years, aiming for 30%. This helps them understand the impact of recent innovations on their bottom line.
  • Customer Satisfaction and Adoption Rates: Customer feedback is integral to 3M’s innovation process. They measure satisfaction and adoption rates to ensure that new products meet or exceed customer expectations.
  • Number of Patents Filed: 3M files over 3,000 patents yearly. This KPI reflects their innovative output and secures intellectual property to protect and leverage their inventions.

Conclusion

Measuring innovation is not a one-size-fits-all approach. The KPIs you choose should align with your strategic objectives and organizational culture. By implementing effective KPIs and learning from examples set by industry leaders like Google and 3M, you can better manage your innovation efforts and drive sustainable growth.

Remember, the key is to balance quantitative metrics with qualitative insights to get a holistic view of your innovation process. With the right KPIs, you’ll be better equipped to navigate the complex terrain of innovation and achieve success.

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