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bjarte-bogsnes's picture

Performance Management Hackathon Synthesis

By Bjarte Bogsnes on October 23, 2012

Dear MIX Friends,

A month after we launched this hackathon, I wanted to take a step back and reflect on what we have heard and what we have learned. What a month! I am really, really impressed. Not only with the high number of contributions (close to 70 when we closed), but even more with the high quality of ideas, challenges, and creative thinking coming from every corner of the world.

Dear MIX Friends,

A month after we launched this hackathon, I wanted to take a step back and reflect on what we have heard and what we have learned.

What a month! I am really, really impressed. Not only with the high number of contributions (close to 70 when we closed), but even more with the high quality of ideas, challenges, and creative thinking coming from every corner of the world.

It is always easy to criticize an existing idea, but much harder to develop a new alternative. In this hackathon, we have seen a wealth of new alternatives proposed, covering such breadth that it is difficult to summarize.

As I mentioned in my previous blog post at the halfway point, we all define Performance Management slightly differently based on our roles and experiences. Even Wikipedia uses a shotgun when attempting to define it:

  • “Activities which ensure that goals are consistently being met in an effective and efficient manner.”
  • “A process by which organizations align their resources, systems, and employees to strategic objectives and priorities.”
  • “A technology (i.e. science imbedded in applications methods) for managing both behaviour and results.”
  • “Monitoring and measurement of relevant performance metrics.”

These rather cold definitions all tilt towards the business or organizational dimensions of Performance Management. How does the organization translate strategies, set targets, allocate resources, and monitor, evaluate, and reward performance? Although some of you touched upon these things, directly or indirectly, the majority of you focused more on important individual and human aspects—on what really ignites, inspires, and unlocks the performance potential of the 21st century employee.

As I have said before, we need to address both business and human aspects. 

We must address them in a way that creates consistency and coherence across everything we do to get the best possible performance in our organizations. It does not help to have Theory Y leadership visions if you have Theory X management processes. Finance and HR need to climb out of their functional silos and start talking with each other and not just about each other on these important issues.

Fortunately, there are great examples of this happening. I have had the pleasure of helping Plymouth University in the UK get started on a Beyond Budgeting journey, where the team is aiming to undergo significant changes in how they lead and manage at the university. It has been fantastic to see CFO Sarah Jones and HR Director Vikki Matthews work seamlessly together in developing their new management model with the rest of the management team. Brave and wise people, and the first university worldwide to go Beyond Budgeting! I’m sure many of you could share similar examples of great change in action.

A clear trend in the contributions throughout the hackathon was that most people not only dropped “Management” in their proposed label (no surprise), but also “Performance.” I fully agree that Management has to go. I am more uncertain about Performance. What I do believe, however, is that many organizations need to revisit and change their definition of this word. Performance has to be about more than a narrow, mechanical, and short-term orientation. There must be room for things like values, transparency, and sustainability as well.

Let us take a look at some of the contributions. There are so many great ones that I would love to highlight and to quote. I’ll point to some, and also highlight a few common themes that caught my eye.

One of the contributions that resonated strongly with me was Lorne Mitchell’s The Performance of the Hive, for not just sharing his brave career move, but also the relevance of a fascinating beekeeping experience.

The importance of conversations and dialogue was emphasised by many, including Christopher D. Lee in Conversations, not Evaluations, Jonathan Winter in Engaging Conversations, Mike Caracalas in Performance Dialogue, and Katarina Schmidt in Inspiring Conversation. Check out what complexity theory says about conversations and how they explain a lot of what happens in organizations, especially all those “unplanned” conversations.

One theme that appeared in many contributions was “enabling”; creating an environment for great performance without trying to manage it. See for instance Anders Olesen’s Performance Enabling. I had maybe also expected the word “facilitation” to appear in some form (Performance Facilitation?) but it was noticeably absent from the labels.

Among the most “liked” entries was Alberto Blanco’s great Contribution Compass. I really liked the metaphor and the questions he proposed.  Both Alberto and others proposed clever abbreviations for their labels. As mentioned in my comment to Alberto, I personally prefer if we can take the time to spell things out :)

Peter Bunce’s Empowered and Adaptive Management Model also was rated highly. I recommend checking out the Beyond Budgeting model, although I am not entirely objective here, given my strong involvement with the Beyond Budgeting movement.

So, have we reached a tight, decisive conclusion? Do we have a clear alternative label for Performance Management?

Probably not quite yet.

But what we do have is a much clearer understanding of the components we’ll find in any replacement for Performance Management. In my view, a replacement will likely have many of the following principles that were highlighted by the hackathon participants. In essence, it will:

  • Provide people with increased autonomy—pushing the responsibility for making the necessary business trade-offs as close to the front line as possible
  • Encourage building capabilities of people and teams, not just evaluating them.
  • Be a more open and collaborative process that truly leverages the collective intelligence of the company and de-politicizes decision-making
  • Feature ongoing, consistent dialog and feedback that enables real-time adjustments based on a broad set of inputs and metrics.

It will also require applying these principles in how we design and execute several important management processes, like the way we set goals, allocate resources, forecast, measure and review performance,  and provide rewards and incentives.

These processes should be as self-regulating as possible. The less we need to manage the better.

As you all know, what is most important is that we understand and agree on the problems with the old way and that we all have a common view of what we think should be the new way. That is if course a million times more important than what we label this stuff, and that was actually the main purpose of this hackathon.

Still, I have to admit that it would be nice if we also could pin down that new label. Have I given up? Definitely not!

I would like to extend a big thank you to Michele, Chris, and Bruce at MIX for organizing this hackathon. Thank you from all of us in the community for being part of creating the MIX as a great meeting place for the many of us frustrated with today but exited about tomorrow.

Finally, a big thank you to everyone who contributed. Your ideas have taken us another few steps further towards that better tomorrow.

I'd love to hear from you. What were your takeaways from the hackathon? How do you think we can continue to make progress in redefining Performance Management? Please feel free to add your thoughts in the comments below.

What's next? Several of the people who contributed have offered to develop their definitions into full hacks for the MIX. And we are working on a short report to capture the results of our work. I look forward to sharing these hacks and the report with you once they are completed.

All the best, and good luck on your own journey!

Bjarte

PS. My apologies for not being able to respond to all contributions individually, which was my goal. Midway through the hackathon I got a virus on my balance nerve. My wife tells me I must have been too unbalanced about something. The revenge of Performance Management?

 

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torsten-dalhoefer's picture

Hi Bjarte
Thank you for organizing this platform for exchange on one of the most important topics in business life.
However, I am not entirely sure if the status quo has already been captured sufficiently. If not, we may be drawn to wrong or not fully correct conclusions.
I would like to offer a different perspective to the discussion. I did not have the opportunity yet to read all the input you have already received, so apologies if this is redundant with comments already made.
In my opinion and experience, the problem with Performance Management is too little Management, rather than too much. I am talking of Management in the good old Drucker way here. The reality I am observing is that objectives are being set that are more or less aligned with what has been cacaded down. Keep in mind that this has an operational level as well as a strategic one. Even if it is close to what came down from the top, usually the targets/objectives are being formulated in a superficial way that makes monitoring them - aka managing the performance - impossible. The reason e.g. we want objectives to be time-bound is not because we are all terrible bureaucrats. It is because this allows the individual to plan and prioritize his/her work, and it allows the manager to monitor it and take action where necessary.
Now, if the targets have not been set properly, did therefor not get monitored properly (if at all) what is the Manager talking about when it is time for the Performance appraisal that triggers e.g. pay for performance. Again, performance does not get managed. The result is euphemistic 'Performance Appraisals' that are actually useless. Next step: the company introduces forced rankings to get a grip on the problem...

I guess what I am trying to say is that the problem is not so much the label or the process. The real problem is that we have not succeeded in convincing Managers on all levels of the organization that this makes sense and that it is actually part of their job. Not only when it is time for target setting, mid-year review, and performance appraisal. Performance Management needs to happen each and every day. We do not seem to be disciplined enough to implement this properly, we shy away from those difficult conversations and the tough decisions that are necessary. We try to fix all of that with better software. Not working.
I truely believe that a well implemented Performance Management Culture can give employees all the freedom they need to unleash their full potential - while making sure at the same time, that we are not losing sight of the overall objective of the organization.

Regards

Torsten

bjarte-bogsnes's picture

Torsten,

Thank you for taking time to repond so thoroughly. I fully agree with you that "Performance Management" needs to happen all the time, and that better software or forced ranking isn't a recommeded medicine. We also both appreciate the wisdom in Peter Drucker's many wise words.

I hesitate however on your diagnosis about targets not being precise and specific enough. My experience is actually the opposite, that too detailed and too many targets often can have the opposite of their intended effect, even if they are well aligned with strategy.

Thanks,
Bjarte

torsten-dalhoefer's picture

Bjarte

You are absolutely right with your comment. Too detailed objectives are just as much a problem as not properly defined ones. While the later ones do not allow real/good management, the first ones kill all creativity and innovation within the system. Employees in the company will feel micromanaged.
I guess the problem with Performance Management is that because it sounds so easy to do, we (managers) do not take it serious enough. As Drucker said: it's simple but not easy.
The fact that many HR colleagues still sell it as an HR tool/process does not really help either.

Kind regards

Torsten

jonathan-winter's picture

Many thanks Bjarte, your work pulling this all together is much appreciated. Let's keep the ideas and experiments flowing!

bjarte-bogsnes's picture

Jonathan,

Thank you so much for contributing. I definitely believe the future is on our side. The world is not becoming less dynamic and unpredictable, and people are not becoming less educated and aware. I am an optimist. As one of my favourite bands once put it: " The future's so bright, I gotta wear shades".

Thanks,

Bjarte