Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/a26f9f83/public_html/articles/includes/config.php on line 159
The 10 Biggest Mistakes People Make Managing Organisational Performance > NetSparsh - Viral Content you Love & Share

The 10 Biggest Mistakes People Make Managing Organisational Performance

mistake #1: rely just on financial statements

Profit and loss, revenue and expenses these are measures of important things to a business. But they are information that is too little and too late. Too little in the sense that other results matter too, such as customer satisfaction, customer loyalty, customer advocacy. Too late in the sense that by the time you see bad results, the damage is already done. Wouldn't it be better to know that profit was likely to fall before it actually did fall, and in time to prevent it from falling?

mistake #2: look only at this month, last month, year to date

Most financial performance reports summarise your financial results in four values: 1) actual this month; 2) actual last month; 3) % variance between them; and 4) year to date. Even if you are measuring and monitoring non-financial results, you may still be using this format. It encourages you to react to % variances (differences between this month and last month) which suggest performance has declined such as any % variation greater than 5 or 10 percent (usually arbitrarily set). Do you honestly expect the % variance to always show improvement? And if it doesn't, does that really mean things have gotten bad and you have to fix them? What about the natural and unavoidable variation that affects everything, the fact that no two things are ever exactly alike? Relying on % variations runs a great risk that you are reacting to problems that aren't really there, or not reacting to problems which are really there that you didn't see. Wouldn't you rather have your reports reliably tell you when there really was a problem that needed your attention, instead of wasting your time and effort chasing every single variation?

mistake #3: set goals without ways to measure and monitor them

Business planning is a process that is well established in most organisations, which means they generally have a set of goals or objectives (sometimes cascaded down through the different management levels of the organisation). What is interesting though, is that the majority of these goals or objectives are not measured well. Where measures have been nominated for them, they are usually something like this: Implement a customer relationship management system into the organisation by June 2006 (for a goal of improving customer loyalty) This is not a measure at all it is an activity. Measures are ongoing feedback of the degree to which something is happening. If this goal were measured well, the measure would be evidence of how much customer loyalty the organisation had, such as tracking repeat business from customers. How will you know if your goals, the changes you want to make in your organisation, are really happening, and that you are not wasting your valuable effort and money, without real feedback?

mistake #4: use brainstorming (or other poor methods) to select measures

Brainstorming, looking at available data, or adopting other organisations' measures are many of the reasons why we end up with measures that aren't useful and usable. Brainstorming produces too much information and therefore too many measures, it rarely encourages a strong enough focus on the specific goal to be measured, everyone's understanding of the goal is not sufficiently tested, and the bigger picture is not taken into account (such as unintended consequences, relationships to other objectives/goals). Looking at available data means that important and valuable new data will never be identified and collected, and organisational improvement is constrained by the knowledge you already have. Adopting other organisations' measures, or industry accepted measures, is like adopting their goals, and ignoring the unique strategic direction that sets your organisation apart from the pack. Wouldn't you rather know that the measures you select are the most useful and feasible evidence of your organisation's goals?

mistake #5: rely on scorecard technology as the performance measure fix

You can (and maybe you did) spend millions of dollars on technology to solve your performance measurement problems. The business intelligence, data mining and 'scorecarding' software available today promises many things like comprehensive business intelligence reporting, award-winning data visualization, and balanced scorecard and scorecarding and an information flow that transcends organizational silos, diverse computing platforms and niche tools .. and delivers access to the insights that drive shareholder value. Wow! But there's a problem lurking in the shadows of these promises. You still need to be able to clearly articulate what you want to know, what you want to measure and what kinds of signals you need those measures to flag for you. The software is amazing at automating the reporting of the measures to you, but it just won't do the thinking about what it should report to you.

mistake #6: use tables, instead of graphs, to report performance

Tables are a very common way to present performance measures, no doubt in part a legacy from the original financial reports that management accountants provided (and still provide today) to decision makers. They are familiar, but they are ineffective. Tables encourage you to focus on the points of data, which is the same as not seeing the forest for the trees. As a manager, you aren't just managing performance today or this month. You are managing performance over the medium to long term. And the power to do that well comes from focusing on the patterns in your data, not the points of data themselves. Patterns like gradual changes over time, sudden shifts or abrupt changes through time, events that stand apart from the normal pattern of variation in performance. And graphs are the best way to display patterns.

mistake #7: fail to identify how performance measures relate to one other

A group of decision makers sit around the meeting room table and one by one they go over the performance measure results. They look at the result, decide if it is good or bad, agree on an action to take, then move on to the next measure. They might as well be having a series of independent discussions, one for each measure. Performance measures might track different parts of the organisation, but because organisations are systems made up of lots of different but very inter-related parts, the measures must be inter-related too. One measure cannot be improved without affecting or changing another area of the organisation. Without knowing how measures relate to one another and using this knowledge to interpret measure results, decision makers will fail to find the real, fundamental causes of performance results.

mistake #8: exclude staff from performance analysis and improvement

One of the main reasons that staff get cynical about collecting performance data is that they never see any value come from that data. Managers more often than not will sit in their meeting rooms and come up with measures they want and then delegate the job of bringing those measures to life to staff. Staff who weren't involved in the discussion to design those measures, weren't able to get a deeper understanding of why those measures matter, what they really mean, how they will be used, weren't able to contribute their knowledge about the best types of data to use or the availability and integrity of the data required. And usually the same staff producing the measures don't ever get to see how the managers use those measures and what decisions come from them. When people aren't part of the design process of measures, they find it near impossible to feel a sense of ownership of the process to bring those measures to life. When people don't get feedback about how the measures are used, they can do little more than believe they wasted their time and energy.

mistake #9: collect too much useless data, and not enough relevant data

Data collection is certainly a cost. If it isn't consuming the time of people employed to get the work done, then it is some kind of technological system consuming money. And data is also an asset, part of the structural foundation of organisational knowledge. But too many organisations haven't made the link between the knowledge they need to have and the data they actually collect. They collect data because it has always been collected, or because other organisations collect the same data, or because it is easy to collect, of because someone once needed it for a one-off analysis and so they might as well keep collecting it in case it is needed again. They are overloaded with data, they don't have the data they really need and they are exhausted and cannot cope with the idea of collecting any more data. Performance measures that are well designed are an essential part of streamlining the scope of data collected by your organisation, by linking the knowledge your organisation needs with the data it ought to be collecting.

mistake #10: use performance measures to reward and punish people

One practice that a lot of organisations are still doing is using performance measures as the basis for rewarding and punishing people. They are failing to support culture of learning by not tolerating mistakes and focusing on failure. It is very rare that a single person can have complete control over any single area of performance. In organisations of more than 5 or 6 people, the results are undeniably a team's product, not an individual's product. When people are judged by performance measures, they will do what they can to reduce the risk to them of embarrassment, missing a promotion, being disciplined or even given the sack. They will modify or distort the data, they will report the measures in a way that shows a more favourable result (yes ? you can lie with statistics), they will not learn about what really drives organisational performance and they will not know how to best invest the organisation's resources to get the best improvements in performance.

Stacey Barr is a specialist in organisational performance measurement, helping people get the kind of information that tells them how well their business is doing and how to make it do better. Sign up for Stacey's FREE newsletter at http://www.staceybar.com

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Sportskeeda

Champions League Fantasy: Top 7 midfielders to choose
Sportskeeda
Salah was phenomenal in the Champions League last season scoring 10 and providing 4 assists. He has started this season in brilliantly again in the league and looks set to continue his form in Europe. Liverpool are in a tough group though with Napoli ...


SportsGrid

The Engel Eye: The King's Week Three Game Breakdowns and Tips
SportsGrid
Here are the King's Week Three Fantasy Football Game Breakdowns, complete with non-obvious start/sit tips, and even some betting and DFS tidbits.Join the ...

and more »

Expressen

Favoritseger – och den här hästen är "säker" tvåa
Expressen
Så gick det förra veckan. ”Maxchansade” Antonio Tabac stannade vid 49% på Top 7…! 68% på V75 var också ett fynd. Tyvärr blev dödens i 10-tempo för tufft för Moni Viking, vilken jag spikat som tvåa. ... Storfavoriter underspelas alltid på Top 7 – som ...


Doctor NDTV

Aeriel Yoga: Top 7 Health Benefits Of Aeriel Yoga
Doctor NDTV
DoctorNDTV is the one stop site for all your health needs providing the most credible health information, health news and tips with expert advice on healthy living, diet plans, informative videos etc. You can get the most relevant and accurate info you ...


Expressen

Favoriten har toppchans – men blir underspelad
Expressen
Någon centimeter skilde mellan Fantoccini och Cab Hornline som 3.a-4:a: Med omvänd ordning fem rätt – nu bara två och 168 kronor. I söndags blev det för första gången rollerpot på 2 rätt! Nu extrapengar i potten för femte lördagen i följd.


Student Loan Hero (blog)

Top 7 Survival Tips for Your First Year Out of College
Student Loan Hero (blog)
“Don't only participate, do your absolute best to contribute at least 10% of your salary,” McNamara advised. “Fifteen percent is the ultimate goal!” The sooner you can start saving for retirement, the better off you'll be. That's because compounding ...


Komando

Top 7 industries where you can find remote jobs
Komando
Remote work is growing at a fast pace--115 percent in the last 10 years, to be exact. And while these types of jobs can be found in many different career fields, some industries are more plentiful with remote work than others. For the last five years ...


Husker Corner

Nebraska recruiting: Jamie Nance has Huskers in Top 7, tips off commitment date
Husker Corner
The Nebraska recruiting efforts have paid off when it comes to Jamie Nance, who has put the Huskers in his Top 7 ahead of an impending commit. The Nebraska recruiting efforts in June have been nothing short of awesome. The Huskers grabbed several ...

and more »

Inc.com

Your Official World Cup Leadership Skills Guide (the Top 7 Teams)
Inc.com
Lead. Your Official World Cup Leadership Skills Guide (the Top 7 Teams). The greatest sports tournament in the world exposes those who know how to lead and those who don't. By Chris MatyszczykOwner, Howard Raucous LLC @ChrisMatyszczyk.

and more »

Guiding Tech

We decided to check Instagram groups, and here we present you seven tips and tricks to use them like a pro.
Guiding Tech
Unlike other social networks or chat apps, creating a group on Instagram isn't straightforward. Meaning, you won't find a dedicated button or option to do so. Then how does one create a group? Well, the trick is to select multiple people while sending ...

Google News

Top 10 Ways Websites Makes Me Suffer

I believe some people create and publish websites for the... Read More

Ten Top Performance Management Tips

Talk to Your People Often By building a great... Read More

7 Reasons You Want Referral Business and How to Get Them

Studies have proven that there is one reason why people... Read More

Ten Tips for Effective Meetings

Here are ten things that you can do to hold... Read More

Seven Ways to Get the Most Out of the Next Training You Attend

Sometime soon you will be attending some training. It may... Read More

The Top 7 Marketing Tips You Dont Want To Overlook

1. Combine Emotion and LogicConsumers buy because the want to... Read More

10 Marketing Tips For Your Business

Here are a few ideas to get you started, all... Read More

Top Ten Ways to Manage Interruptions

So many people I worked with said they got more... Read More

Ten Tips for Cross Cultural Communication

Here are some simple tips to help you improve your... Read More

10 Steps for Business Owners to Take if They Are a Victim of Identity Theft

Be aware that 40 million crooks obtained credit card numbers... Read More

After Hurricane Katrina - Seven Things You Can Do

If you are like me, you are living some distance... Read More

Advice for New Coaches: 10 Ways to Attract Your First Paying Client and Receive Endless Referrals

Many new coaches struggle to attract their first client. Often,... Read More

Shaking Your Money Tree: Seven Ways to Make Quick Cash

Does your business have a money tree you can shake... Read More

Start Your Own Website in 10 Easy Steps

If you're a beginner, starting a website doesn't have to... Read More

10 High-Impact Viral Marketing Strategies

Viral Marketing is allowing people to giveaway and use your... Read More

The Benefits Of Helping An Online Business Newbie

Do your remember when you first ventured out in the... Read More

7 Steps Toward a Better Website

Creating a website is one thing, making it better is... Read More

Checklist for Hiring a Private Investigator

Looking for an old friend? Want to know if your... Read More

Ten Ways to Strengthen Your Reading Habit

Most people wish they read more. It is an activity... Read More

Top 10 Tips on How To Write About Yourself

Many people find it really hard to write for business... Read More

Seven Questions to Improve Your Business, Your Relationships, and Your Life

Seven Questions to Improve Your Business, Your Relationships, and Your... Read More

The 10 Benefits of Cross Cultural Training

Cross cultural differences can and do impede upon communication and... Read More

Get Your Mailing Noticed - Seven Tips for Effective Direct Mail Pieces

When sending mail to clients and potential clients, make your... Read More

How to Become an Expert in Your Niche Business

What is a niche business? A niche business is one... Read More

10 Steps for Simplifying Business Plan Financial Statements

For most business owners and entrepreneurs, preparing, and communicating the... Read More