Developing Metrics and KPI (Key Performance Indicators

 

This presentation covers the basics of developing successful performance metrics; from developing winning KPIs, learning how to develop the right metrics, the rules of developing KPIs and metrics and common performance metrics for managing a successful organization.

 

http://www.slideshare.net/victorholman/developing-metrics-that-drive-performance-success

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Victor Holman is a Marketing and Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.  http://www.lifecycle-performance-pros.com/Business-Strategies/business-done-for-you-system.html

Get FREE ACCESS to his highly acclaimed Insider’s Secrets Club, which provides the latest business growth tools and strategies to explode your income.   http://www.lifecycle-performance-pros.com/Free-Stuff/free-insiders-secrets-club-signup.html

Get a FREE Performance Management Kit at http://www.lifecycle-performance-pros.com/Free-Stuff/free-kit.html

Visit Victor at www.lifecycle-performance-pros.com or www.victorholman.com today

 

Developing Metrics and KPI (Key Performance Indicators

What Is Lifecycle Performance Management?

 

Lifecycle Performance Management is the systematic implementation of an enterprise-wide performance strategy involving all business units, systems and personnel.  It is a sequence of management processes, when combined, achieves a complete approach to managing performance from start to finish.  Lifecycle Performance Management focuses on all areas that determine the success of an enterprise, including:

• Employees


• Department / Business Units


• Processes


• Finance


• Programs (e.g. implementing organizational policies)


• Products/Services


• Projects

Key components of Lifecycle Performance Management include:

• Integrating key documents into a performance plan


• Aligning performance to organizational goals


• Applying best practices and key performance activities


• Identifying the right metrics


• Developing a plan to act on the results


• Constantly improving the knowledge and performance of your people, processes and technology.

Lifecycle Performance Management includes integrating multiple data sources and understanding what processes make your organization most productive.  It involves revisiting core processes and identifying ways to maximize and continuously improve performance.

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Victor Holman is a Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.

Get FREE ACCESS to his highly acclaimed Insider’s Secrets Club, which provides the latest business growth tools and strategies to explode your income.

http://www.lifecycle-performance-pros.com/Free-Stuff/free-insiders-secrets-club-signup.html

Get a FREE Performance Management Kit at http://www.lifecycle-performance-pros.com/Free-Stuff/free-kit.html

Learn more about his Business Done For You Service

http://www.lifecycle-performance-pros.com/Business-Strategies/business-done-for-you-system.html

Visit Victor at www.lifecycle-performance-pros.com or www.victorholman.com today

What Is Lifecycle Performance Management?

The Data Integration Lifecycle

Data integration is the process of combining data residing at different sources and providing the user with a unified view of the data.

Access – Data comes from many sources, including legacy application and systems, databases, modern applications, various XML messages and numerous types of documents (spreadsheets, project plans, text documents, etc).  Identifying and accessing these sources is the first step to data integration.

Discovery - This involves bringing all data sources out into the open, and documenting the uses and structures of poorly understood or described sources.  This is also the point at which data semantics (patterns or rules that emerge from its structure and use) and quality issue should be noted and flagged for further action.

Cleansing – Data is cleaned up for accuracy and integrity.  Clean-up can involve detecting and correcting errors, supplying missing elements and value, enforcing data standards, validating data and purging duplicate entries.

Integration - This step involves consolidating data across all systems and applications, accessing their fragmented data, creating an accurate and consistent view of their information assets, and leveraging those assets to drive business decisions and operations.  This often means resolving inconsistent utilization and definition for identical terms across different contexts.

Delivery – Correct, relevant data is made available in proper form, in a timely manner, to all users and applications that need such access.  This might mean responding to queries that result in single records or small answer sets to delivering entire data sets for trend analysis or enterprise-wide reporting.  This step also addresses needs for data security, availability, privacy and compliance requirements related to access and use.

Development and Management - This is where XML-based toolsets enable those who manage data; business analysts, architects, developers and managers to work together in creating a comprehensive set of data integration rules, processes, practices and procedures, thereby capturing and implementing all the substantive work done in the five preceding steps.  This step also tackles issues related to performance, scalability and reliability needs for key enterprise applications and services.

Auditing, Monitoring and Reporting – Once its semantics and uses have been captured, omissions remedied, errors corrected, and quality examined and assured, ongoing observation and analysis is required to keep the data clean, correct, reliable and available.  This part of the process makes it possible to flag potential issues as they occur and to cycle  them back through this lifecycle to make sure they resolved.  Auditing also helps to make sure that data remains visible, under control, and able to guide future changes and enhancements.

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Victor Holman is a Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.

Get FREE ACCESS to his highly acclaimed Insider’s Secrets Club, which provides the latest business growth tools and strategies to explode your income.

Get a FREE Performance Management Kit at http://www.lifecycle-performance-pros.com/Free-Stuff/free-kit.html

Visit Victor at www.lifecycle-performance-pros.com or www.victorholman.com today

The Data Integration Lifecycle

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.

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Victor Holman is a Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.

Get FREE ACCESS to his highly acclaimed Insider’s Secrets Club, which provides the latest business growth tools and strategies to explode your income.

Get a FREE Performance Management Kit at http://www.lifecycle-performance-pros.com/Free-Stuff/free-kit.html

Visit Victor at www.lifecycle-performance-pros.com or www.victorholman.com today

11 Steps to Improving Performance Through Data Collection and Gap Analysis

The Impact of Performance Management on Key Organizational Functions

Performance management is the foundation of any organization that has a vision and knows where they want to be in the near and long term future. As today’s rapidly evolving business environment challenges organizations to adapt to constant change, the need for organizations to be sure that their projects and activities are aligned with overall strategic goals and business objectives is critical. Performance management is the gauge that lets you know whether or not you are reaching strategic goals and which areas within your service delivery could use improvement. It used to be that performance was isolated to one department. Today, every division within an organization can benefit from it. Performance management spans across various management functions and helps ensure that your people, processes and technology are working together to achieve your organization’s missions and goals. This article illustrates how performance management relates to various major management support functions within your organization.

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Strategic Planning

Strategic planning is the process of determining a company’s long-term goals and then identifying the best approach for achieving them. Strategic planning plays a vital role in the performance of your organization. In order for strategic goals to be achieved, strategic planning must be aligned to performance measurements. These performance measurements allow executive management to gauge the effectiveness of the organizational strategic plan and determine how the budget and projects will be setup in the future. The strategic planning process is discussed in more detail in the planning phase.

Organizational Development

Often used interchangeably with organizational effectiveness, organizational development is the process through which an organization develops the internal capacity to be the most efficient towards its mission work and to sustain itself over the long term. This definition highlights the explicit connection between organizational development work and the achievement of organizational mission. Performance management directly relates to organizational development, since OD is primarily focused on improving the performance of organizations and the people within them. Whatever your organizational challenges, the starting point is to get a clear, objective view of your organization’s performance abilities, such as strengths and limitations. Identifying proper performance attributes is essential, because sound management decisions can only be made when performance attributes are identified and measured accurately. In order to reach anticipated organizational targets, you must be able to tie the performance and motivation of individuals to the overall strategic objectives. The Lifecycle Performance Framework processes illustrate how performance management, organizational development and strategic planning share interrelated processes to accomplish organizational goals. Organizational development processes are discussed in more detail in the planning and execution phases.

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Change Management

Change management is a systematic approach to dealing with change within every perspective of an organization, from systems to personnel to projects to functions. Change management is a comprehensive, often difficult management function to properly implement. There’s the saying “Organizations don’t adapt to change; their people do.” With that outlook, it is easy to understand how performance management plays a critical part in managing change. Implementing change within an organization often requires a change in how employees execute things. You can implement the most advanced change management tools money can buy, but if your people don’t buy into or fully support the initiatives, their performance will suffer and ultimately the organization will be ineffective, or less efficient than before.

Every system, personnel, and procedural change within an organization should be implemented with the goal of achieving an improvement in performance some form. The actual improvement should be compared to the predicted improvement to assess the effectiveness of the change. This guide discusses managing your organization during its many changes throughout the performance lifecycle.

Project Management

Project management is the discipline of organizing and managing resources (e.g. people) in such a way that the project is completed within defined scope, quality, time and cost constraints. A project is a temporary and one-time endeavor undertaken to create a unique product or service, which brings about beneficial change or added value. Performance measurement is an area within the Project Management Institute’s Project Management Body of Knowledge (PMBOK). It is the link between performance management and project management, where cost, schedule and scope performance are measured and monitored throughout each phase of the Project Lifecycle. Project performance reporting is the process of collecting project baseline data and distributing performance information to stakeholders throughout the project. Implementing project performance measurement ensures that your reporting clarifies how resources are being used to obtain the objectives of the project. Measuring project performance is discussed in detail in the monitoring phase.

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Customer Satisfaction

Customer satisfaction is the measurement or determination that a product or service meets a customer’s expectations, based on predetermined quality and service requirements. It is said that customer satisfaction equals perception of performance divided by expectation of performance. There is a direct relationship between performance and customer satisfaction, where the better you perform to customer expectations, the more satisfied customers will be. Customer satisfaction is your organization’s level of performance through your customers, employees, and/or stakeholders perspective. In fact, many times customer satisfaction feedback, if requested properly, can provide information and insight for achieving breakthrough increases in organizational performance and effectiveness. When measuring customer satisfaction, organizations should review their objectives and ensure that the customer service strategy is linked to those objectives. How to ensure that your organizational objectives are linked to your customer service strategy are discussed in the reporting phase.

Workforce Performance Management

Workforce performance management is the strategic alignment of an organization’s human capital with its business activities. It is a methodical process of analyzing the current workforce, determining future workforce needs, identifying the gap between the present and future, and implementing solutions so the organization can accomplish its mission, goals, and objectives.

People are the most important aspect to any organization. Therefore, the performance of the people within an organization will greatly impact the overall performance of the organization. While most employees understand what they need to do, workforce performance management tells them how well they must do it. The greatest benefit to workforce performance management is the process of aligning employee performance to organizational objectives and goals. This guide explains how to evaluate individuals on their alignment with corporate goals and their contributions to business results in the planning section. Functions within workforce performance management are Recruit and Hire Management, Compensation Management, Incentive Management, Goals Management, Learning Management, Competency Management, and Performance Measurement. These functions are described in the executing phase.

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IT Performance Management

IT performance management assists organizations with the increasing demands of maximizing value creation from technology investments, reducing risk from IT, decreasing architectural complexity, and optimizing overall technology expenditures. Behind people, technology is the next critical factor in maximizing efficiency and organizational performance. Many organizations from small to large are using IT strategically to support profitable growth. IT performance management includes maximizing technology to improve service delivery in every area of the organization. IT performance management utilizes such technology as unified management reporting and dashboard tools to enhance performance and drives business processes. How to find the right technologies to enhance your business intelligence, and choosing the right business intelligence tools are discussed in detail in the reporting phase.

Knowledge Management

Knowledge management refers to the guidelines, policies, and practices that an organization uses to create and transfer information to support the performance of the people in the organization. These can include various documents and copyrights, and intangible processes, models and methods that their people use to get work done. The impact of knowledge management on key business results is seen through its potential for improving the performance of business processes. Take call centers for example. They may handle hundreds, even thousands of calls a day. It would be too much too ask for call center representatives to be able to resolve the majority of these calls without a knowledge management system in place. With a knowledge management system, the call center representatives have more information and resources to access and can thus resolve more customer requests. Performance benefits can be seen in such areas as first call resolution, time to resolve, and customer satisfaction. Knowledge management drives performance by linking knowledge to critical functions which impact business and putting the supports in place to ensure knowledge is leveraged across people and circumstances.

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Quality Management

Quality management is a method for ensuring that all the activities necessary to design, develop and implement a product or service are effective and efficient with respect to the system and its performance. Quality management includes several processes that enable organizations to ensure quality. Among them are quality planning, quality assurance, quality control, quality audits and quality surveillance. Quality planning is defined as a set of activities whose purpose is to define quality system policies, objectives, and requirements, and to explain how these policies will be applied, how these objectives will be achieved, and how these requirements will be met. It is always future oriented. Quality assurance (QA) is defined as a set of activities whose purpose is to demonstrate that an entity meets all quality requirements. QA activities are carried out in order to inspire the confidence of both customers and managers, confidence that all quality requirements are being met.

Quality control is defined as a set of activities or techniques whose purpose is to ensure that all quality requirements are being met. In order to achieve this purpose, processes are monitored and performance problems are solved. Quality audits examine the elements of a quality management system in order to evaluate how well these elements comply with quality system requirements. Quality surveillance is a set of activities whose purpose is to monitor an entity and review its records to prove that quality requirements are being met. Performance measurement is a necessary instrument for quality management because in order to measure quality, you must first apply performance expectations and standards. In the PMBOK, the performance measurement process group falls under the quality management knowledge area. Quality management is discussed in greater detail in the monitoring phase.

Process Improvement

Process improvement is a series of actions taken to identify, analyze and improve existing processes within an organization to meet new goals and objectives. There are many process improvement methodologies that differ in approach, but the one thing they all have in common is the outcome of better performance. In fact, by definition performance improvement is the concept of measuring the output of processes or procedures, then modifying the processes or procedures in order to increase the output, increase efficiency, or increase the effectiveness of the processes or procedures. Often times, the most critical processes that impact business success are those that require support from multiple functional groups. Identifying and managing cross-functional processes and removing the functional silos that inhibit business culture are discussed in great detail in the planning and executing phases.

—————————–

Victor Holman is a Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.

Get FREE ACCESS to his highly acclaimed Insider’s Secrets Club, which provides the latest business growth tools and strategies to explode your income.

Get a FREE Performance Management Kit at http://www.lifecycle-performance-pros.com/Free-Stuff/free-kit.html

Visit Victor at www.lifecycle-performance-pros.com or www.victorholman.com today

The Impact of Performance Management on Key Organizational Functions

Why Your Organization May Need a Performance Improvement Strategy...

It is believed that having the right metrics can only get you 80% of the way to an effective performance metrics program. 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 areas 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 weaknesses 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

Take control of your organization’s performance and join the elite group of high performing organizations.

 

About Victor Holman

Victor Holman is a Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.

 

Get FREE ACCESS to his highly acclaimed Insider’s Secrets Club, which provides the latest business growth tools and strategies to explode your income.

http://www.lifecycle-performance-pros.com/Free-Stuff/free-insiders-secrets-club-signup.html

Get a FREE Performance Management Kit at http://www.lifecycle-performance-pros.com/Free-Stuff/free-kit.html

Why Your Organization May Need a Performance Improvement Strategy...

How to Evaluate Organizational Performance in Economic Hard Times

We’ve all made the decision to improve our appearance at some point in our lives. Maybe we’ve decided we were going to lose weight by dieting and exercise. Or maybe we’ve decided to gain strength by lifting weights. The first thing we did was stepped on that scale and said “Wow, I need to lose a few pounds”. Or we ran to the gym and measured our strength and endurance at various exercises.

 

What we were actually doing was creating a baseline. We were creating a snapshot of our current selves. Let’s just pretend that we didn’t baseline our current self, we didn’t have our measurements, and based personal goals based on Miss America, or Mr. Universe’s appearance. We wouldn’t capitalize on the available data (our current selves) and set realistic goals. Shortly, we’d become frustrated, lose motivation, and eventually fail.

 

Likewise, businesses often don’t capitalize on available data to get them through difficult times. With a new year beginning and growing concerns of our economic future, now is a good time to evaluate our current environments and identify our organizational strengths, weaknesses and areas for improvements and cost savings. This article discusses the value of baselining organizational performance, different baselining approaches your organization can, and overcoming variables that add complexity to your performance baselines.

 

Baselining involves using historical performance data to calculate averages and standard deviations. The average establishes the baseline and the standard deviation is a percentage change in the baseline deemed acceptable. When performance exceeds the standard deviation, some specified action is usually required.

 

If your organization has clear, specific goals and objectives, the data to be used in the baseline is easier to determine. And of course, if goals and objectives are vague or unclear, it can be difficult to identify important baseline data. But given these tough financial times, it is probably most beneficial to focus on financial performance and key processes.

 

A performance baseline is performance information gathered to evaluate your current state and measure variations to gauge successes and failures within the organization. Baselines may also be used to establish goals and standards, to set SLA metrics and performance thresholds, and to make important decisions. But perhaps the most important, but overlooked reason we do performance baselines is to refocus our organizations on what’s important. You may have done a baseline a couple of years ago, but chances are you are still measuring the same things you measured back then. Performance a new baseline forces us to re-evaluate what’s important to organization as it endures the constant changes brought on by this dynamic economy.

 

Types of Performance Baselines

 

There are three types of baselines:

• rolling baselines


• recurring time-based baselines


• and specific date baselines.

 

Rolling baselines compare current performance metrics with a period of time preceeding the current period. An example would be comparing last month’s performance to the average performance of the previous 12 months.

 

Recurring time-based baselines compare current performance metrics with performance baselines calculated for the same length of periods. Daily or weekly baselines are good examples of recurring time-based baselines.

 

Specific date baselines compare current performance metrics with the metrics from a specific date. For example, gathering baseline sales metrics for the day after Christmas.

 

Complexitites of Baselining Performance

 

Historical baselines often answer the question “how many?” such as “how many tickets were created over a given period of time?” The historical baseline data are the averages of such counts over that specified period. Baselines can be relative to any arbitrary point in time.

 

While this seems simple, it gets more complex when you take into effect some of the following variables: processes that take several days to complete, business hours calculations (e.g. M-F, 9-5, excluding holidays or specific dates), calculations involving multiple time zones, and calculation involving phased implementations.

 

When processes extend for multiple days, counting and time calculations become considerably more difficult, especially when a reporting tool is not utilized. Processes executed on business days and during business hours are also more difficult. In this case the proper divisor at the Day level is the number of business days in the last 365 calendar days, taking into account weekends and holidays. The divisor at the Hours level is the number of business hours in the last 24 hour period. Calculations with Multiple Time Zones can span across multiple cities around the world, reflecting different holidays and work norms. The baseline divisor thus becomes a function not only of Time but also of Location, thus further complicating the process. Projects utilizing phased implementations where new locations or divisions go “live” as the enterprise expands (such as in a phased Enterprise Resource Planning implementation). In this case, the baseline calculation must take into account how long a particular location has been live in order to obtain an accurate baseline.

 

Understanding Variables and Standard Deviations

 

Variance and Standard Deviation are measures of how spread out a distribution is. In other words, they are measures of variability. The spread is the degree to which scores on the variable differ from each other. If every score on the variable were about equal, the variable would have very little spread. Standard Deviation is the square root of the variance. It is the most commonly used measure of spread. An important attribute of the standard deviation as a measure of spread is that if the mean and standard deviation of a normal distribution are known, it is possible to compute the percentile rank associated with any given score. In a normal distribution, about 68% of the scores are within one standard deviation of the mean and about 95% of the scores are within two standard deviations of the mean.

 

Identifying the Right Data to Baseline

 

There’s a basic rule to identifying the right data to baseline:

 

1) measure what your customers say is important,

2) measure areas where there are problems you’d like to solve, and

3) measure the business objectives you are aiming to achieve.

 

If your organization has clear, specific goals and objectives, the data to be used in the baseline is easier to determine. However, if goals and objectives are vague or unclear, it is difficult to identify important baseline data. Measurements should be aligned to your organization’s objectives and should be SMART (Specific, Measurable, Actionable, Relevant, and Timely).

——————————————–

Victor Holman is a Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.

 

Get FREE ACCESS to his highly acclaimed Insider’s Secrets Club, which provides the latest business growth tools and strategies to explode your income.

 

Get a FREE Performance Management Kit at http://www.lifecycle-performance-pros.com/Free-Stuff/free-kit.html

 

Visit Victor at www.lifecycle-performance-pros.com or www.victorholman.com today

 

How to Evaluate Organizational Performance in Economic Hard Times

10 Steps For Managing Key Processes That Drive Business Success

Process Improvement Life Cycle for Continuous Performance

When it comes to performance management, managing the performance of your processes can be your best avenue for driving performance gains. Identification of key business processes is critical to organizations as they execute your strategy by aligning the results of these processes with the strategic goals. Key business processes are those processes which have maximum impact on the success of your organization. Key processes are those that move you closer to your goals and have the greatest impact on your organization. In other words, these are the processes which would seriously impact revenues, should they fail. This article examines the steps necessary to manage and maximize the efficiency of your key processes.

A typical organization should only have less than 15 key processes. A few will be the generic processes within your industry, while others will be specific to your unique approaches, goals, service, geographic location, policies, etc. In my experience, organizations are aware of most of the processes that drive their success. Unfortunately, there are often many processes which have an equal or greater impact on the organization which never receive the attention they deserve. Many times, it’s these latent processes that keep organizations from performing up to their potential. Identifying key processes using a structured approach, aligning their outcomes to deliver the business goals, designing appropriate measures and allocating sufficient resources for their improvement is the key to the success of an organization.

Many organizations struggle to identify their key processes. Most people within organizations understand their team’s function within the organization, but they do not understand how their team’s function interacts with other group functions. Business processes are streams of activity that flow across functional boundaries. For this reason, business processes are said to be fragmented, or scattered across functional silos. This is where the performance management team’s services are so valuable. Assigning a process engineer as part of the performance management team can enable you to standardize processes and bridge the communication gap that exists between functional support groups. Below is a 10 step process for managing key processes that drive business success.

Baseline Current Environment

Every performance improvement initiation starts with a baseline. You must first know how well your organization currently executes your key processes before you can fully understand what you need to do in order to reach your desired level of process execution. This is the foundation and gives you your starting point for where you need to improve.

Identify Critical Success Factors

Critical success factors are the elements that must be present in order for an initiative to be successful. Some critical success factors in process management include:

•Process alignment – aligning processes to organizational goals and objectives is critical to organizational success

•Technology investment – the more you can automate your processes, the more efficient your organization will and the more you’ll be able break down and identify bottlenecks and inefficiencies

•Measuring performance – in order to truly understand your process execution, you must be able to measure your processes from start to finish.

Organize and Centrally Locate Processes

In order to fully understand how processes interact with one another, your processes must be organized. It used to be that each department managed their processes with very little interaction with other divisions. But in today’s fast paced business models and the need for instant process execution, it is vital that organization’s consolidate, standardize and manage cross-functional processes. This requires centrally locating processes and taking a look at the big picture.

Standardize Processes

Often times organizations have similar processes that are executed by multiple divisions and teams. One division may be extremely efficient at executing that process while another division executes at a much lower efficiency rate. Unfortunately, many organizations don’t standardize their processes. By leveraging the processes that strong performing divisions employ and standardizing those processes among weaker performing divisions, the entire organization can benefit from extraordinary performance gains.

Redesign Inefficient or Ineffective Processes

This is where we take action. Once we’ve baselined and measured our processes, we are now ready to take action. Identify the inefficient processes within your organization and the processes that do not support the organizational goals and objectives. If you have a small organization or limited manpower, you can take one process a time. You’ll see that over time you will have redesigned several processes and the impact will be clear.

Eliminate Workarounds and Duplicate Steps

How many times have you worked on a process that was flawed and you found a workaround? It’s amazing the things we will do patch up a process error to get the job done. It always amazes my clients when we map out a process and find all of the inefficiencies and duplicate steps. I’ve seen some processes where two divisions basically passed ownership back and forth until it came to an escalation point and a decision was made by senior management. You’ll be surprised at how much time you can cut out of a process when these flaws are mitigated.

Automate Processes Where Possible

This is the name of the game. The more automated your processes, the less chance for human error and the more predictive your performance will be. This sometime requires a significant investment. But in an age where we want things done yesterday, the investment is most times well worth staying ahead of your competition and establishing customer loyalty.

Identify Metrics and KPIs

This is where we quantify how effective our processes are. Establishing performance measurements for your key processes, especially those that span across multiple organizations will significantly improve your performance. How many times have you evaluated a failed process only to get the usual finger pointing across the divisions involved? When you can break down a performance measure and understand how much time it should take for each division (or individual) to execute their part of the process, then you can assign accountability. And accountability often means results.

Cross Train Employees

In order for an organization to be successful, especially large organizations, it’s important that employees understand three things:

1.what are the organizational goals and objectives

2.how does their function contribute to the organizational goals and objective, and

3.how does my function impact the larger, cross-functional process

Understanding how each employee’s function impacts the function of other division is the first step in gaining synergy among your employee and the processes that drive your organization.

Develop Plan for Process Reevaluation

So, you’ve baselined and centralized your processes. You have standardized where possible. You have eliminated inefficiencies and workarounds. You have applied metrics, automation and cross trained employees so that they understand their role in the bigger picture. Now it’s time to do it all over again. Remember, process improvement is a continuous process. Your competitors are going to keep getting better, faster, more efficient and you must too.

Victor Holman is a Business Performance Expert and CEO of Lifecycle Performance Professionals.  His Business Done For You Service helps small business owners level the playing field with larger, higher budget competitors by delivering high performance marketing, management and social media solutions that build credibility and expert status, and generate steady leads and increased profits.

 

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10 Steps For Managing Key Processes That Drive Business Success