Wednesday, January 20, 2010

Success Factors For Developing a Winning Performance Management Team

The other day I was asked how to create a performance team that can tackle the challenges of the modern enterprise. The selection of the performance management team is critical to the success of any large project. This article focuses on the structure, skills and success factors for your next large performance management initiative.

Centralized vs. Decentralized

All performance teams have one thing in common, that is gathering key metrics and reporting them to key stakeholders. How they gather this information depends on the organization's structure. There are two ways performance teams gather and report information; centralized and decentralized. In a centralized structure, the performance management team has access to all of the organization's key resources and is responsible for running the queries, ensuring accurate results and reporting on performance throughout the organization. In a decentralized structure business units are responsible for gathering their own data, and the performance team sends out data calls where the business units provide the metrics to the performance team. The performance management team then assembles these collected metrics into dashboards, scorecards and other graphical displays. Many organizations, especially those with business units that handle sensitive data have a hybrid structure. This is where the performance team is responsible for producing some of the metrics while business units are responsible for providing some of their metrics to the performance team. The ideal situation is for the team to have full reporting access to all major systems, where accurate results can be guaranteed and where those reports are accessible for business unit managers to monitor and ensure desired service.

Performance Management Team selection

The key person on the performance management team is the team lead. A highly skilled team lead is the key to the success of your performance initiative. Whether this person is within your organization or an outside consultant, they should be dedicated 100% to this project, should be highly experienced with performance measures, more knowledgeable in the areas of performance than senior management, and should be able to motivate the people whose performance will be measured and reported on. The size of your team will depend largely on the size and complexity of your organization. A performance team in a centralized structure will be larger than a team in a decentralized structure, because more resources are necessary to gather the performance data and communicate with the business units. In most cases the management team will include subject matter experts in fields such as data integration and industry related processes. These roles will be discussed further in the execution phase. The management team should be well aware of the issues facing the organization from the customer, employee, senior management and key stakeholders perspectives. They should understand the financial and operational goals of the organization. And most importantly, they must be experienced with analyzing data and providing feedback on suggested measures, while constantly searching for new, creative methods of managing performance.

Performance Management Team Success Factors

There are several factors outside of the performance management team's power that will play a critical role in the success of the performance initiative. These are the factors that require support from the rest of the organization. The performance management team must have:

- support and commitment from the CEO

- a direct reporting line to executive management

- access to systems, data, organizational charts, and processes

- management support and full commitment from their staff

- a liaison for each business unit to bridge gap in communication and operational knowledge

There are other success factors to be mindful of when time and budget constraints are introduced. For instance, if your organization is looking for an advanced solution integrating existing systems with multiple business intelligence tools, the performance initiative will most likely be delayed at various points due to purchasing, compatibility and implementation processes. If your organization is looking to improve performance with existing systems, you may not have the luxuries of the new, emerging tool's bells and whistles, but the good news is much can be done with standard applications such as MS Excel, Access and SharePoint... not to mention the learning curve. In fact, one goal of your performance initiative may be to maximize efficiency with the existing tools while at the same time researching new tools that will be the best fit for your service and infrastructure. A performance management initiative with existing tools may require a larger team because some older tools require manual processes to retrieve and assemble data. Other success factors include:

Team Leadership - As mentioned earlier, team leadership is the most critical success factor for the performance management team. A leader with strong performance management skills and the ability to develop others virtually guarantees a successful performance initiative.

Shared vision / approach - The ability for an organization to clearly state it's goals and objectives and gain buy-in among the employees along with a synergistic team that can carry out their responsibilities is vital to performance success.

Technology support - While a skilled performance management team can improve performance with very little tools and only an effective approach, with proper technology to support the team's needs, and the proper data to drive decision making, there is almost no limit to the improvements an organization will yield.

Senior leadership buy-in - It is critical that senior level management and executives buy into the performance initiative. Studies have shown that senior level management that places value in leveraging performance data into overall strategy increase their organization's chances for success. Compound this with strong performance managers that are able to translate the strategy into actionable measures and these organizations are often able to benefit from extraordinary results.

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 road map 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

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