Saturday, 12 May 2012

Managing Performance in Turbulent Times: Analytics and Insight

Can management systems cope with the rapid pace of change in Society today? We believe they can but it does require new ways of looking at problems and putting in place systems that can adapt to those fast moving environments.

If you think about what has happened through political turbulence and also economic turbulence in recent years, and the rate at which technology is developing then you can see that the World is moving incredibly quickly. What we need to do is to have systems in place that are able to cope with and be updated rapidly to manage those changes. If we get the systems right and organisations adapt and change appropriately then profitability will increase and that can only be good for the recovering UK economy.

We began our research by thinking about what are the most turbulent environments which organisations are operating in, where are the really challenging environments? That led us to think of the rate at which some of the hi-tech firms are changing.

The question we wanted to ask is: ‘If it takes you a long time to design a measurement system normally, and if you think measurement systems are central to the way you manage organisations, how are these hi-tech firms that operate in very fast moving environments actually coping by deploying and developing their measurement systems?’ 

We know that it is not as easy to forecast what is going to happen in the future, and coupled with that most organisations these days are also creating vast amounts of data almost as a by-product of their existing operational processes. So there is more synergy between the new businesses like Facebook and Google and the traditional businesses than you might at first think. 

We found a number of practices that seemed to be in operation in those fast moving organisations but at the heart there were two cycles they used: a performance management cycle and an execution cycle.

It is important to look for the connection between the two cycles. We want managers to ask: ‘How do we know we are doing the right projects to drive performance in this business?’ ‘How do we make sure we are executing those projects quickly and how do we know when to step back and change the portfolio of projects and look for new things to do?’

What the PMTE (Performance Management for Turbulent Environments) framework does is that it gives you a method and a system to think about the way you are approaching performance management in your organisation. There is a lot more to making an organisation successful than simply getting a measurement system right, but it is an important element.

The key to successful working are the five enabling foundations that happened in all the organisations we looked at:

Strategic intelligence is about scanning externally for ideas and capturing that intelligence. Continuous conversations are about continually exploring and thinking about that information across the organisation.  If you get that right you get accelerated learning, where you actually start to learn faster about what is working and what is not working.

But you need a framework that gives organisational alignment to allow those continuous conversations and accelerated learning to take place across the organisation. However, you are not going to do that unless you have engaged leadership that actually legitimises it inside the organisation and allows people to use performance data to drive improved performance.  

We need to make sure performance measurement systems are as dynamic as possible in organisations and that they really help you to learn fast.

The faster you can get round that process then the faster you can learn and the more likely you are to survive in turbulent times. Robust systems are the key to today’s rapidly moving turbulent times. 

More on this can be found in this book by Andy Neely and Ed Barrows or here for a Podcast Interview with Andy Neely

Andy Neely and Ed Barrows