Do you know what high performance means for your organisation?
Individual Performance
There has been a lot written about Individual performance. What it means, what high performance looks like, how to measure it and how we can achieve it. In any business, leadership / management publication, TED Talk, podcast etc you’ll find a wide range of research, literature and theories focused on understanding and increasing individual performance. Much of this is fantastic and Simon Sinek (Start with Why: How great leaders inspire action) and Dan Pink (Drive: Autonomy; Mastery; Purpose) are a couple of my favourites who have influenced a generation of thoughtful leadership looking to enhance individual performance.
Organisational Performance ≠ Profitability
When it comes to Organisational performance, the same simply isn’t true and there is not the same abundance of materials. In saying that, it is important to note that there is a lot written about competitive strategy and profitability and that there are a significant proportion of organisations for whom high performance is, and will always be, predominantly measured by profitability.
I’ll explore in a later blog whether it can actually ever be true that the only organisational performance metric that matters is profitability. Even in a corporate, shareholder-driven environment, we have seen evidence from the recent tech start-up trend that profitability is not the be-all and end-all. But for simplicity, let’s assume that there are some for whom profitability is king.
What remains are a great deal of organisations for whom high performance or success cannot be defined in such simple terms. This more complex and nuanced environment includes public sector and third sector organisations in addition to private sector examples such as many tech start-ups.
So what is Organisational Performance then?
And here’s where it gets fascinating for me because it’s not easy to give a single, simple answer that will universally be accepted and understood. Despite this (or perhaps because of this?), there is much less by way of articles, podcasts, theories and frameworks than exist for the topic of individual performance.
For me, it starts with a clear understanding of your desired Impact as an organisation.
- What does winning look like?
Once you have that agreed by the relevant parties, which is easier said than done, you need to understand any boundaries that must be observed such as company Values, legalities or constraints.
- What are the rules of the game?
With these established, you can begin to form Strategic Objectives which either directly measure or are good proxy-indicators for success in achieving your stated impact. These need to cover a range that is as complete as possible to ensure that crucial areas are not omitted. Each area will have bespoke measures specific to your organisation type and strategic objectives.
- How do we keep score?
Why does it all matter?
Once you have your metrics, what you do with them will make a huge difference to how useful they are. One of my preferred tools is a balanced scorecard which covers business critical areas including Finances, Processes, Customers and Learning & Growth. Done well, this makes management, reporting and oversight significantly more efficient for managers, leaders and boards.
For any organisation, better defining and understanding their desired performance or impact can result in improved monitoring and management of their performance criteria. In turn this is likely to increase performance against those measures.
For me then, Organisational Performance is all about consciously maximising your impact against pre-agreed criteria whilst abiding by your values. And this should be something that every organisation wants to do.
So, how well is your organisation performing? How do you know?