Develop a Performance Management Roadmap

More companies than ever are embarking on business performance management (BPM) initiatives. However, some of these companies don’t even realize that is what they are doing. The reason is that many of these projects begin as one-offs to address a particular business need. For example, the finance team may realize the need to move from spreadsheets to a more robust, purpose-built budgeting application. They may not be aware that they are in fact creating the foundation for a performance management system. Some managers in IT may decide to build a dashboard as a way to share key information more broadly. More than likely they will take key ratios from existing reports and use them to populate their dashboard, missing the opportunity to develop a true performance scorecard. Business unit heads may develop key performance indicators to better manage their particular area, but these important measures may not be linked to each other or tied to the overall corporate strategy. Missing from these disparate projects is a cohesive vision for performance management and a roadmap to help execute on that vision.

The best way to begin a performance management project is with an audit/roadmap workshop. The benefits are many and include: minimizing redundant efforts and projects, linking together disjointed pieces to create a result that is greater than the sum of the parts, developing team alignment and setting appropriate expectations, determining technology needs in a more comprehensive manner and evaluating what is already in place so it can be leveraged for BPM - potentially reducing (or eliminating) new software expenditures.

When done properly, the roadmap can be developed in days or weeks, not months. Once the roadmap is in place, work can begin immediately on addressing short-term pains, but with an eye toward how the work fits into the bigger picture.

Now let’s look at how this workshop should be run. The biggest challenge is the one you’ll hit right up front - getting the right people in the room. The attendees should include senior management representation from each of the major functional areas or business units, senior IT and finance executives, the person or persons in charge of managing the company’s overall performance project and the executive sponsor. This sponsor can be the COO, CEO, president, CFO or CIO, but it is important that this individual will be able to communicate the company’s high-level vision for performance management. It is often difficult to identify all the correct individuals for the workshop in advance, and it is probably even more difficult to get them in the same room at the same time. For this reason, you should try to optimize the involvement of the most senior people, and have them in the meeting at the very beginning to discuss the vision and at the end to sign off on how the team plans to execute toward that vision. The other key individual at this session is the person who will facilitate the workshop. This person needs to have a deep understanding of BPM - what is possible, what is not, best practices, how to avoid common pitfalls and what are reasonable resource requirements for dollars and people. It is also helpful if this individual has a broad range of relevant experience from other companies and performance management projects and is not politically tied to any one area in your company. Two ways companies have filled this role successfully are by utilizing a new hire with the aforementioned skills brought on board specifically for this purpose, or by short-term contract engagement with an external performance management expert.

The workshop itself has four main sections. The first is really about education, making sure everyone understands what performance management is and what it can and can’t do. This is usually presented by the facilitator utilizing case studies of other companies and detailed industry research and analysis. The second is focused on vision. The executive sponsor will lay out the company’s long-term (three- to five-year) goals for performance management. The department heads will then discuss their specific short- and long-term needs as well. The goal is to come out with a unified vision that incorporates the needs of each area. The third workshop section is focused on understanding what is in place today and what is working or not working. This systems audit aspect of the workshop often involves IT, with feedback from the business users of these systems. Once these sections are completed, the fourth and final topic can be addressed - creation of the performance management roadmap.

The roadmap itself is designed to close the gap between what exists today and what the company would like to have in place tomorrow. Typically, the steps spelled out in the roadmap follow a three- to five-year timeline and are detailed enough to be meaningful and actionable. Some steps may be about the business processes and work needed to be done there, others will be about getting the right people in place and trained, still others will relate to systems - requirements, selection, purchase and deployment. The roadmap should also indicate the relative priority, sequence and target timing of the steps. This document needs to be approved by the executive sponsor and have buy-in from all the key stakeholders.

With your roadmap in hand, you can now start your performance management project with an increased degree of confidence and a holistic view of what’s ahead of you. Things will change - they always do. This approach, however, will give you a framework to determine the impact of those changes and a way to communicate a new set of expectations to the key stakeholders as your initiative builds momentum.