Über die Autorin bzw. den Autor

BRUNO AZIZA has led marketing, sales, and operations teams at various technology firms, including Apple Inc., Business Objects, and Decathlon. Bruno has worked and lived in France, the U.K., Germany and the U.S., and holds a master’s degree in business and economics from three European institutions. He currently works on Microsoft’s Global Business Intelligence strategy.

JOEY FITTS has consulted over twenty-five of the Fortune 500, guest-lectured at Harvard Executive Education programs, raised over $16 million in venture capital, and served on the Board of Advisors for InterVivos and the Computer Technology Industry Association (CompTIA). He currently works on Microsoft’s Global Business Intelligence Partner strategy.

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How can your organization increase its agility, alignment, and accountability to improve performance? Developing performance management capabilities means changing the way people are empowered to make better decisions. It requires a transition from a restrictive, command-and-control approach to a management style that includes more participants in the performance management process. Drive Business Performance shows you how.

Starting with a Foreword by Dr. Robert Kaplan and Dr. David Norton, creators of the revolutionary Balanced Scorecard approach, Drive Business Performance reveals how to effectively align performance with technology, creating a best-in-class information management system and amplifying individual employee impact.

This groundbreaking guide provides a deep understanding of how to achieve enterprise performance management objectives, backed up by firsthand accounts from Fortune 500 companies that are winning by building accountability, intelligence, and informed decision making into their organizational DNA. Drive Business Performance explains the competitive advantage experienced by organizations that create and manage a “Culture of Performance.”

Part of Wiley’s Microsoft Executive Leadership Series, Drive Business Performance fills a gap in the literature on managing performance. This innovative, jargon-free book demystifies performance management, with detailed guidance for organizations to replicate top performers’ results, including the recommended skills and assets needed to successfully compete in today’s business environment.

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Drive Business Performance

How can your organization increase its agility, alignment, and accountability to improve performance? Developing performance management capabilities means changing the way people are empowered to make better decisions. It requires a transition from a restrictive, command-and-control approach to management style that includes more participants in the performance management process. Drive Business Performance shows you how.

Starting with a forward by Dr. Robert Kaplan and Dr. David Norton, creators of the revolutionary Balanced Scorecard approach, Drive Business Performance reveals how to effectively align performance with technology, creating a best-in-class information management system and amplifying individual employee impact.

This groundbreaking guide provides a deep understanding of how to achieve enterprise performance management objectives, backed up by firsthand accounts from Fortune 500 companies that are winning by building accountability, intelligence, and informed decision making into their organizational DNA. Drive Business Performance explains the competitive advantage experienced by organizations that create and manage a Culture of Performance.

Part of Wiley's Microsoft Executive Leadership Series, Drive Business Performance fills a gap in the literature on managing performance. This innovative, jargon-free book demystifies performance management, with detailed guidance for organizations to replicate top performers' results, including the recommended skills and assets needed to successfully compete in today's business environment.

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Drive Business Performance

John Wiley & Sons

Chapter One

Give employees a large dose of discretion; provide them with the information they need to make wise decisions; and then hold them accountable for results. -Gary Hamel, The Future of Management

WHY MANAGE PERFORMANCE?

Why do companies need to manage performance? For most organizations, it is crystal clear that they better figure out how to perform better if they want to better serve their customers, stay ahead of the competition, and meet shareholder demands.

Drivers for Performance Improvement

What are the catalysts for managing performance? Organizations often embark on a performance improvement initiative within one of the following scenarios:

Leadership change. Often, performance improvement initiatives begin with a change in leadership. In case study after case study example in this book, this is a recurring theme-Energizer, Expedia, Fortis, Millipore, the Veteran's Administration-all had new leaders come in with performance management as a priority. When a new leader takes over a division, business unit, or company, they have a green light to be bold in suggesting a performance improvement initiative. The authority and timing is right with a leadership change for performance optimization. Executive request-"top down." Executives sometimes discover performance benefits achieved by other organizations and want to follow their path with a performance initiative within their own company or group.

We refer to this scenario as "scorecard envy," when an executive sees the performance management capabilities other executives (inside or outside the company) have and wants these as well. Management best practice-"bottom-up." This scenario is often the result of a zealous and persistent manager's pioneering performance management results within a team or group, which get discovered and eventually are taken on to be institutionalized across the organization. As we shall see, this "internal guerilla marketing" as Laura Gibbons of Expedia refers to it, is necessary to get buy-in for performance management systems and processes even when executive support is present. Industry/sector awareness. In some industries, the management practices and systems are very consistent from company to company. When performance management becomes instantiated within a few of these organizations it is not uncommon for others in the industry to follow suit. The public sector is a great example of this. Once a few government organizations adopt performance management practices, it soon proliferates across other segments of government. There's really a domino effect across the U.S. federal government for performance management adoption. Once the Balanced Scorecard was first adopted in the Army and the Department of Defense, it spread like wild fire. Information technology (IT) driven: Sometimes the work of IT can help drive the proliferation of tools and applications, which start to effect broad change in how performance is managed. In these scenarios, the organization may view IT as strategic and take guidance on how technologies can improve performance thus having the initiative driven by IT. As IT shares technology capabilities without a business mandate, the "toys" are distributed and then the people discover how to play. This may result in a champion ultimately developing a best practice that bubbles up, and a more formal performance improvement initiative is started. This is not a common scenario, however, as at some point the push must come from the top down. Executive support is necessary for the performance management initiative to become a standard process or practice-to move from an initiative to the way the company does things across the enterprise. Regulations and public reporting: Regulations can also drive attention to performance management. Many public sector organizations are required to report performance against public metrics, such as the UN's Millennium goals (as we shall discuss in the example of the Development Bank of Southern Africa). Public service organizations are often required to report their impact as well on metrics related to education, health, or safety. In the private sector, compliance with financial reporting regulations such as Sarbanes Oxley and Basel II drive a focus on performance management. When the consequences are jail time for executives or fines if the organization is found to be out of compliance, it's no wonder regulations are significant drivers for a more disciplined and transparent management approach.

These scenarios are typical catalysts for performance improvement. In addition to these structural drivers, there are also common business scenarios that compel organizations to better manage performance.

It should also be noted that performance management initiatives do not only occur when times are bad. Clearly, when performance is poor, the interest in performance improvement is increased. However, as professor and author Tom Davenport explains, you shouldn't just manage performance when things are bad.

Motivation may be lower then (when things are going well), but when things do go bad, you need to know very quickly what the relationships are. So if you see that you are starting to have a problem with employee engagement, for example, you know from previous analysis that this is going to really affect your financial performance if you don't do something about it very quickly. Or maybe you know there is a one year lag, so if we start with a customer royalty problem, it's not going to affect this year's performance but it is going to affect next year's performance. You have to establish that under good times so you can address it quickly during bad.

Good or Bad-You're Making Decisions Today

The question really is not whether an organization will take steps to manage performance; it's just a question of how serious they take performance and how well they'll do it. Even without a formal performance management strategy and systems in place, organizations have some method, process, or habits they've developed to manage performance. Whether this is simply done via informal, status-update conversations, bonus-pay incentives, or a formal management-by-objectives method, these are all approaches to managing performance-it's just the degree to which they are effective that varies.

So, when asked why performance management matters, we often ask in reply, "Why manage anything?"

Let's start with a local business example for familiarity. Suppose you run a retail store and you are interested in making more money to grow your business, pay your people more, or maybe just so you can take a nice family vacation. How will you decide what promotion you are going to run to increase income for your store? This...