Closing the Intelligence Gap - Gary Cokins on Performance Management

Everyone is familiar with the relentless question from children in a car’s back seat during a long road trip impatiently asking, “Are we there yet?” To some managers this question can apply to the journey of implementing the full vision of the performance management framework. As an example, Michael Ensley recently wrote a blog asking Jonathan Becher and I “How would each of you define Performance Management and what does it mean when it is successfully implemented?” Jonathan responded first, in "Performance Management Defined (and Debated)." My turn.

When is Performance Management successfully implemented?
For the second part of Michael’s question, I commented on a similar question in my June, 2009 blog, “Can You Ever Complete Implementing Performance Management?” posed by John Colbert, an IT analyst with BPM Partners:

There are many types of performance initiatives, arguably dozens, including profitability optimization and strategic planning. Executives select which initiative to pursue like choosing your food in a cafeteria line. The selections for any organization will depend on what is most desired. However, a key to getting synergy is to both integrate the initiatives' methodologies and imbed analytics of all flavors in each – especially predictive analytics…"

John also states, “… (P)erformance management is an ever evolving project that is never really ‘complete.’” This is my belief too. I have stated that there is no organization on the planet Earth that has completed the full vision of the Performance Management framework. But the smart and healthy ones have traveled far. It is like running a marathon without a finish line. But it is better to be running in the lead.

I expand on my observation in an earlier blog “One Performance Management – Many Recipes” where I state that

Just like our grandmothers each had their own recipe for a holiday fruit cake, organizations are concocting their own customized versions of the performance management framework. Increasingly there is consensus that performance management is not a process or a system, but rather it is the integration of multiple managerial methodologies like cog gear-teethed wheels in a machine to be synchronized – better, faster, cheaper and smarter.

How does one define Performance Management?
Now let’s address the first part of Michael’s question – a definition for performance management. One of the causes for impatience with the performance management road trip is there confusion, ambiguity and lack of consensus in the marketplace about the definition of performance management.

As evidence of this confusion just Google the term and you will see what I mean. Many of the hits are about employee performance management and appraisal, an HR and personnel task. Additional confusion is because different information technology research firms define it differently. And different consulting firms and software vendors describe it to fit their unique competencies rather than what their customers may require.

A major source of the confusion is that performance management is perceived by many as far too narrow. It is often referenced as a CFO initiative with a bunch of measurement dashboards for feedback and better financial reporting. It is much, much more and broader. More recent confusion comes from the term being narrowly applied to a single function or department, such as marketing performance management or IT performance management. These two examples are an operational view in contrast to the strategic enterprise-wide view that Colbert, myself and others share. It is not business process management but performance management.

Since my impression is that performance management is not a new methodology but rather is the integration of existing methodologies, none near optimal, and that have been in practice for decades – arguably even before computers – then my belief is it is better to discuss what performance management does rather than have arcane debates about defining what it is.

But if I was pressed, I would define performance management as follows: Performance management is the integration of multiple methodologies with each one embedded with business analytics, such as segmentation analysis, and especially predictive analytics … to achieve the strategy and to make better decisions.