Wednesday, January 20, 2010

11 Steps to Improving Performance Through Data Collection and Gap Analysis

It is believed that metrics teams can only get 80% of the way to an effective set of metrics. The last 20% comes from deploying the metrics, seeing how they affect performance, and then adjusting them accordingly. The same can be said about the performance which these metrics guide. One of the main reasons we measure performance is so that we can identify weaknesses and areas of improvements. What we do once we identify these weakness and areas of improvement is what determines how effective our performance initiative, and in turn, organization will be. The purpose of performance improvement is not to point fingers and place blame on a group or individuals that are not performing well, nor is it intended to solve problems. Performance improvement is simply a way of looking at how an organization can perform better. The difficulty with performance improvement, especially in an enterprise organization, is understanding which processes are working well and which aren't and knowing what to tackle first when key processes are interconnected.

Other challenges of implementing a performance improvement plan enterprise-wide occur when performance management teams try to implement change on a large scale. Performance improvement is best accomplished by implementing small changes, mastering a particular process to achieve those changes and identifying the next change that will lead to further performance improvements.

The best way to ensure that your organization is constantly improving and identifying relevant areas for improvement is by involving all employees, from top management down. Most often, negative performance is a result of one or more of the following factors, and is best resolved when all levels of the organization participates:

  • Unclear team/job responsibilities
  • Unclear or lack of performance feedback
  • Inadequate physical environment, including improper tools, supplies, or workspace
  • Lack of motivation and incentives to perform as expected
  • Skills and knowledge required for the job
  • Ineffective processes

Lifecycle Performance Improvement is an eleven step, systematic methodology for identifying weaknesses and the root causes of performance problems, and implementing a solution that applies to those specific performance deficits.

1. Review organizational goals and objectives

Identify/review performance measures (quantity, quality, cost or timeliness) that focus on these objectives

2. Define desired results for the processes

As guidance, focus on results needed by other domains (e.g., products or services needed by internal or external customers). Performance baselines are a good place to start to determine reasonable targets.

3. Measure performance and document results

Ensure that report parameters and formulas are well documented and consistent as these measures are revisited throughout the performance improvement process.

4. Compare the actual results to the desired results

This gives you an idea of how much work you have ahead of you. The further the actual results are from the desired performance the greater the performance gap.

5. Weigh/prioritize the measures that need improvement

Some criteria that may be useful to consider are value of metric, organizational impact, ease of implementing improvement measures, time restraints, etc.

6. Identify other areas of weakness

Often times, investigation of a performance gap will lead you to other weaknesses, which contribute to that gap in performance. In fact, major cross-functional processes are often low performing because of an underlying or sometime unrelated area of weakness.

7. Identify root causes of performance gap

This step involves identifying situations which consume resources, adversely affect the organization, and tend to be repetitive, causing action to eliminate the problem so the situation does not occur again. Root cause analysis (RCA) is a method that identifies causal factors, including interpersonal bottlenecks and dysfunctions that keep a business from achieving financial success. There are several ways to outline root causes. Answering the following questions can aid in identifying root causes:

  • Why did this event happen?
  • What occurred to create it?
  • What occurred prior?
  • What occurred following?
  • What is the significance of the event with respect to customer?
  • Who allowed this condition to exist?
  • Who was supervising this activity?
  • When did it occur?
  • Where (physical location, environmental condition)?
  • How did this condition originate?

Once the root cause is determined then it has to be determined whether it costs more to remove the root cause or continue to treat the symptoms. In a performance improvement setting, removing the root cause is preferred, but again, organizational objectives are the main influence on this decision.

8. Identify solutions

This step involves developing a performance improvement plan based on the organization's weaknesses and root causes. This is where an organization maps out its plan to achieve the desired results, measures and standards that were previous unattainable. The root cause analysis performed in the previous step should assist identifying the best solution for each performance gap.

9. Implement solutions

Well, the hard part is finished. You've identified your problems and determined their root causes. You've generated numerous alternative solutions, and you've chosen the best alternative. If the solution is complicated, or if it requires a lot of work to implement, it might be best to prepare an action plan outlining the necessary steps to be taken. This plan may indicate who is responsible for each action, the target date for completing them, and available resources.

10. Exchange feedback

This is an ongoing process that is often undervalued. Continuous feedback can sometimes enable an organization to identify root causes long before they become problematic. But remember, feedback can only be effective if the organization acts on some of those suggestions.

11. Monitor and evaluate feedback

This is the most important step and extends throughout the entire performance improvement process. This is where you determine the effectiveness of the performance improvement plan. Monitoring and evaluation shows progress, problems and achievements against your goal and objectives. Monitor and evaluation stages help you:

  • make decisions and recommendations about future directions
  • identify the strengths and weaknesses of performance
  • enable judgments to be made about the worth of the measurement
  • determine the rate and level of attainment of the objectives
  • maintain accountability.

About Victor Holman

Victor Holman is a performance management expert who helps organizations reach performance goals through best practice analysis and implementation and custom enterprise performance management products and services.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor's complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

His Organizational Performance and Best Practice Analysis measures how well organization's utilize the key performance activities that drive organizational success, and identifies cost savings opportunities and the critical path to reaching organizational goals.

Learn all about performance management at The Performance Portal

2 comments:

  1. All of the data that you've collected from your workers should be considered when looking for solutions on how to improve your company's overall performance. When all of the data have been analyzed, talk to your employees. Keeping that bond is one of the important factors in improving performance output.

    Clark Adams

    ReplyDelete
  2. I agree what you have putting up on your blog that collecting all data and analyzing data is a big help to make a business success.

    best practices process improvement

    ReplyDelete