It is all very well working hard, following processes and generally being good employees, but what is the point unless you know that (a) you are getting the results you want, and (b) you can prove it? So that’s what today’s post is about – how to account for, and move toward, the achievement of your business goals.
I believe there are two components of superior business analysis which ensure that an organisation’s business operations continue to improve. Together, they establish accountability for and proof of how well an organisation (through its processes) is achieving – or even exceeding – its business goals, in an efficient, cost-effective and appropriate way. Together, performance metrics and performance reporting data set up a simple but effective continuous improvement mechanism. They are critical to ensuring that the organisation is meeting expectations and they provide the feedback loop for improving goals, policies and processes.
I would admit that this should be fairly intuitive, but I think it is worth thinking about the concepts of performance metrics and performance reporting data in a little more depth. I have seen plenty of instances of reports to executive being written in the vein of a storybook commentary or being full of statistics that do not give its audience any sense of what is really being achieved. Even worse is where the results of the reports do not change how the organisation operates – this makes the time and effort spent on reporting a waste of time and devalues the benefits of evaluating activity, when done correctly.
To properly report on achievement against business goals – that is, to appropriately report on whether an organisation is achieving what it sets out to – you need to make sure that the dots of business goals – policies – processes and procedures – reporting data – reporting metrics are all lined up.
This is all about that great buzzword (or those two great buzzwords) ‘continuous improvement’. Otherwise known as ‘continual improvement’, continuous improvement is the cyclical and incremental mode of making something better, be that oneself, one’s business area or one’s greater organisation.
Before going any further though, I would like to make a distinction between continuous improvement and another word frequently used in the natural resource management space at least: adaptive management. I see them as very similar concepts but their difference is critical to understanding how to achieve organisational success.
While continuous improvement is about generally improving something (and in terms of superior business analysis, this something might be a process, a business goal or the overview framework in which they sit), adaptive management is about improving the management of something… essentially improving the decisions that are made. Adaptive management is essentially a method by which continuous improvement is practised within a decision making process. As fascinating as I find it, I won’t go any further down this tangent today – it will keep for another post!
So where am I heading with all of this? Here’s my logic…
- You need to prove success – In many organisations (especially government departments), and for many organisational units (think HR) success is not obvious.
- You need to move toward successful practices or be able to maintain them in a changing environment – Hopefully I don’t need to explain this!
- To do this you need to know what determines success – This is where the performance metrics come in. These are agreed (at the outset of a reporting period) measures of what success looks like.
- Then you need to know what data must come out of business processes to report against these metrics – If you don’t know your data requirements, and the data is not collected throughout the reporting period, you will have a mad scramble just before the reporting deadline to throw together the results (and I would question how accurate the results will be!). Sound familiar? Note that this data is different to the data required for decision-making within everyday business processes.
- You need to build the data collection and reporting steps into processes – Well you don’t have to. But see the comments on the ‘mad scramble’ in point 4!
- You need to adapt your goals, policies and processes based on reporting results – Else what is the point? And how successful do you think your organisation will be in the long-term? However this is one of the biggest challenges of embedding continuous improvement into organisations and merits a post of its own.
Before we finish, it is worth noting that the level of detail in the metrics is up to you! Large organisations will benefit from detailed metrics, whereas for small organisations that may be overkill and too resource intensive.
But that’s my preliminary overview of performance metrics and performance reporting data, and in fact that wraps up our first of hopefully many cycles around the Superior Business Analysis organisational model! And just in time for Christmas too J
I’m taking a break from my normal Thursday postings over the Christmas to New Year period and will be back on January 3rd.
Thanks for reading… Have a merry Christmas and a very happy start to 2013.
Performance Metrics are: the defined measures that together determine whether a specific business goal has been met.
Performance Reporting Data is: the data required to prove whether the performance metrics have been met (or not!).
The benefits of defining the Performance Metrics and required Reporting Data: to ensure executive, management and operations staff have the same, clear picture of what success looks like and what the reporting requirements are. The results of each year also provide a solid benchmark against which they can identify problems and make improvements in future years.
What do you think?
Do you think appropriate performance reporting against business goals is important? And do you have any suggestions for how this can be used to instil a culture of continuous improvement in an organisation?