Assuming an Enlightened Leadership Team, Then What?

Organizations will not make speedy progress by focusing exclusively on one methodology, such as better forecasting, and taking a year or longer to implement those improvements. Competitors will beat you, or customers' expectations will outpace you. Multiple methodology improvements should take place simultaneously. An increasingly accepted best practice for such improvements is to apply the "plan, do, check, act" (PDCA) cycle. Start with rapid prototyping, followed by iterative remodeling for all of the relevant methodologies. Naysayers will argue that the organization can handle only a few projects at a time, but they underestimate the capabilities of people to work together when they are being guided by leaders, not just managers.

With rapid prototyping techniques, an organization makes mistakes early and often, not later when it is more costly to make corrective changes. This do-it-quick approach accelerates learning and brings fast results that gain buy-in from employees who are naturally resistant to change. Resistance to change is human nature. Iterative remodeling continues to scale and expand each of the prototyped methodologies to become repeatable and reliable production systems. Performance management is like gear-teethed cogs in a machine: the more closely linked and better meshed the methodologies are during implementation, the faster the organization moves forward. It helps organizations gain better traction and faster speed - in the right direction. Software technologies are very relevant, but their purpose is to support all of the methodologies. They are enablers, not solutions.

Embrace Uncertainty with Predictive Analytics

Gradually, managers and employee teams will see and understand the big picture, including how all of the methodologies fit together. Those in commercial organizations will realize that creating higher profits and increasing shareholder wealth is not a goal but a result. For those organizations, the true independent variable is finely managing the innovation-based R&D and marketing spending to focus on the types of customers to retain, grow, acquire and win back - as well as those types of customers to avoid wasting money on. Leaders in public-sector government organizations may view funding as a scarce commodity; therefore, they have a need to maximize outcomes by increasing output or improving service delivery without additional resources.

Executives are constantly on a quest for the next breakthrough in managerial innovation. My suggestion is to start by integrating and enhancing existing methodologies that have proved their worth. It is likely that the organization is implementing most of these at some level of competence. However, integration deficiencies may exist in some areas, leading to time lags that cause excessive and costly reactions.

Successful organizations adapt by performing much deeper analysis, such as better and more granular customer segmentation, helping to provide insight into all of the elements being managed. This is called leveraging business intelligence. These leaders integrate their methodologies and supporting systems for better decision-making. Their next major task is to get in front of the wave, using predictive analytics to mitigate risk by making changes before the effects can occur. Predictive analytics may well be the next major competitive differentiator, separating successful from mediocre or failing organizations. The uncertainty of future demands or events should not be viewed as a curse, but rather embraced as something organizations can tame with the powerful and proven probabilistic tools that already exist.

Start now - everywhere. Most organizations overplan and underexecute. For organizations that have experienced recent upheaval, now is the time to regain some order. With a nurturing attitude from executive leaders who act more like coaches than bosses, and with accelerated learning by managers and employee teams, organizations can move forward to complete the full vision of performance management.