Performance Measurement, Management, and Improvement

We are focused on helping our clients work smarter to achieve measurable results that are better, faster, and/or cheaper today than they were yesterday and that those same results will improve in the future when compared with what they are today (e.g., higher profits, more proceeds, etc.). This focus requires attention to three key techniques:  Performance Measurement, Performance Management, and Performance Improvement.

Above this blog, you should see a diagram with a set of concentric circles of various sizes.  These circles represent different components of organizational performance:  Purpose, People,Portfolios, Products, Programs, Projects, Processes, and Preparedness.   I will write a separate blog on each of these eight (8) components in the coming weeks.  However, this week’s blog will focus on the common element which binds them together in each organization:  Performance.

Performance is the execution of work in an organization involving one or more existing processes, projects, programs, products, and/or portfolios.  While such work can be executed by a machine it is usually done by one or more people.

Performance Measurement is the process of ascertaining or determining the extent,dimensions, quantity, quality, and/or capacity of a clearly-defined work endeavor (i.e., process, project, program, portfolio, etc.), especially by comparison with a recognized standard. While all outputs (and outcomes) should be measured and evaluated – quantitatively, qualitatively or both – they are, unfortunately, frequently left unmeasured in empirical fashion.  Yet, one cannot manage what one cannot measure; and, one cannot determine if there has been “performance improvement” until those current outputs (or outcomes) are being measured so that they can be compared with similar measurements of future outputs (or outcomes) resulting from the execution of the same work.

Performance Management is the set of activities that organizations create to coordinate the execution of the work done by people (individual employees or contractors, teams of employees and contractors, departments, and other organizational units) by collecting data on the outputs (or outcomes) of one or more existing processes, projects, programs, products, and/or portfolios.

Performance Improvement is the process of achieving measurable results in a new process, project, program, product and/or portfolio by collecting data on the outputs (or outcomes) of one or more new processes, projects, programs, products, and/or portfolios.  When the results of these new undertakings are better, faster or less costly (or a combination of two of these) over its predecessor (existing) undertaking, that is called an improvement or enhancement.

As a recent example, I was engaged to assist a company in the Home Energy Audit business, to help its management improve one of its eight (8) processes:  the “Installation of Enhancements” process.

As a first step, I facilitated a 90-minute, brainstorming session of the CEO, the Process Owner, and the Installation Team Leader.  During that session, we organized the various elements of this process by way of a “Modified SIPOC Diagram” that I call a “SIPOCO Diagram”. That’s because we went through the process and identified, not only the Suppliers, Inputs, Process (High-Level), Outputs, and Customers, but the intended Outcomes, as well.

The next steps (yet to be performed) will be to:

  • Assign values (both quantitative and qualitative) to the existing Outputs.
  • Identify waste (there are 8 types of them) in the existing Process.
  • Identify how that waste (or those wastes) can be eliminated from the existing Process.
  • Create a new Process by either adapting, adopting or acquiring one.
  • Audit the new Process by measuring the values (both quantitative and qualitative) of the new Outputs.
  • If justified, authorize the new Process as the replacement of the previous one.

Is there a process in your organization that needs to be improved?  If so, what approach do you use to measure and manage it and how would you go about improving it?  Please contact me and share your challenges and issues and I’ll share some ideas with you at no expense.

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