Monday, 8 December 2014

Billy's Thirty-sixth Law: It is important to manage both process and outcome.

Efficiency is doing things right; effectiveness is doing the right things.
Peter Drucker
I was working through some performance management issues with a client the other day.  We took the company’s key service offerings, broken those down into tasks, and then looked at the individual position involved in each task.  A single individual completed some tasks.  People in many different roles completed most tasks.

As we were discussing this, my client commented that it was not enough just to perform the task; the task had to be done correctly.  That got us to thinking about the processes involved in task management. To put things more simply, we wanted to look at how to manage both the how and the what!

Defining Outcomes

Several years I was doing a management seminar and I commented that the best way to think of performance management was to start with the outcome and then work backwards.  The fellow who was hosting the program, a human resources veteran, told me that that was a unique way of looking at things…the traditional HR performance management approach was to look at each step and manage the process.

We need to manage outcomes.  Define the five results needed for each position in your organization and manage the hell out of them.  A manufacturing client just implemented a system that creates a bi-weekly report including productivity (planned times vs. actual times) and quality management.  At the departmental level, the departments know in real time if they are ahead of time targets or if they are behind time targets.  He has taken outcome management to the shop floor. 

Managing Method

It is not enough to manage outcome…we must also manage and provide guidelines for methods.  If we learned anything at all from the financial crisis is that, the way we achieve results has consequences!  The values of your company must permeate down to the methods of delivery.  Sometimes, method is very prescriptive and other times it is more philosophical.  Here is an example from watchmaker Rolex.  It defines the corporate characteristics they call The Rolex Way.

The Rolex Way

     1. A way of doing things unlike any other.
     2. The way we make watches, the only thing we will ever make.
     3. ‘Precise’ is too imprecise for our attention to detail.
     4. ‘Tradition’ is too conventional for the innovation we undertake.
     5. We sculpt, paint and explore. But sculptors, painters and explorers we are not.
     6. There is no word for what we do.
     7. There is only a way.
     8. The Rolex Way.

There are other examples of this.  Hewlett Packard (HP) had the HP way.  Different companies define themselves in terms of customers, employees, innovation, product and a myriad of other aspects of their enterprise.
Outcome is like a script.  Anybody can say, May I help you when a customer enters the store.  Process and attitude determine if the greeting is sincere and welcoming. If you want to develop a complete performance management system, begin with the outcome, and then determine the how and why each task is completed.  This helps both performance management and employee development.

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