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Expert Interview – Gregory Richards, Professor of Performance Management, Telfer School of Management, University of Ottawa, Canada

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Gregory RichardsFor the report Performance Management in 2013, The KPI Institute conducted 20 semi-structured interviews with practitioners, academics and consultants from 18 countries, who offered rich insights into the state of Performance Management as a discipline.

One of the main editorial rules followed in the development of the content is that a discipline can only evolve through the combined efforts of practitioners, academics and consultants. Gregory Richards, Professor of Performance Management at Telfer School of Management, University of Ottawa, Canada was one of the academics that The KPI Institute has interviewed.

1. What does the term Performance Management mean to you?

There are two different interpretations: one is Performance Management at the individual level, and normally that’s about setting targets and performance appraisals and those types of one to one management practices. The other is at the organizational level, and there we’re talking about strategic planning, measuring performance and using data in order to make good decisions to improve the business.

2. What drives interest in Performance Management?

I think the interest has always been there, if you look back in history, at the scientific management movement in 1895, this was a conversation about organizational Performance Management. I think nowadays what’s happening is that organizations work in much more complex environments, so for example in a global environment we have many more competitors, many more customers to think about, and we have lots of data, information in both structured and unstructured format, so we’re seeing a renaissance of interest in how to actually use all of this data in a very complex environment in order to improve performance.

3. What are your thoughts on the relationship between Performance Management at organizational, departmental and individual level?

They should really be closely aligned. In some of the work I do, we talk about the organizational performance measurement framework for example, and that breaks down to departmental and eventually to individual levels. I think that discipline in the planning literature has been there for a long time. What’s interesting is now that we’re able to deliver information to people across the organization much more easily, it’s changing the way in which we connect the Performance Management expectations at the different levels, for the better I think; it makes it easier when we can communicate effectively across those three levels

4. What are the 2013 key trends in Performance Management from your point of view?

I think there are three main areas of exploration here: one is what we’re referring to as Big Data and analytics, there’s a lot of conversation about this integration of information from a variety of different sources, so I think that’s one key trend.

The other is around the notion of planning itself. Years ago we would build a strategic plan for 3 years and sometimes for 5 years. Nowadays with the environment changing so quickly, there’s a sense that you need some kind of model in place to be able to adjust your plans on a regular basis, so the notion of business models is becoming very important.

Thirdly, there is the question of the different types of people who are now getting into the organization. They’re not the same as in the past where you came in at the bottom and worked your way to the top, they have different expectations, and so we have to now think about how to manage individuals differently within that context.

5. What aspects of Performance Management should be explored more through research?

I think right now we know about Performance Management frameworks, they’ve been around for a while, I think we know how to capture information and how to disseminate it. To me, the big questions are how do people actually interact with this data, how the decisions get made using this information, and what is the latency between information delivery and the actual decisions. I think that’s the area for exploration now, how do we actually use the data to make the decisions.

6. Which companies would you recommend to be looked at due to their particular approach to Performance Management and subsequent results?

I think there are a number of organizations that are doing really well, if you look in the financial sector for example, a number of large banks have very good Performance Management practices in place, not only that, but they also have pretty good risk management practices in place. I personally see risk as part of Performance Management; a lot of organizations separate it completely. Some of the technology companies who have been doing very well, especially the large ones, companies like IBM, Cisco for example, Intel, they all have pretty good frameworks in place that seem to work. In the literature by Kaplan and Norton on the Balanced Scorecard you’ll find lots of companies who are using Balanced Scorecards and doing quite well with them.

7. Which are the main challenges of Performance Management in practice today?

In practice I think there are probably two challenges: one goes back to the big data conversation we had earlier, just trying to find efficient ways to capture and transform that information. Some of the research out there by McKinsey and Gartner suggests that there’s a skills gap in organizations. That means we don’t have enough analysts and we don’t have managers who fully understand how to use all this information. The second is related to the first, it’s the management’s skill gap in terms of working with this new generation of employees that I talked about, within the context of a high performing environment.

8. What do you think should be improved in the use of Performance Management tools and processes?

There are I would say three areas: I think we’re pretty good at planning, I think what we need to do there is to think about how to make planning a little bit more dynamic, it can’t be a static process anymore.

Another one is the integration of Performance Management processes with risk management processes, we need to bring those two together, because in a lot of cases the performance measures can also be risk indicators and so the integration between those two would be important.

The last area I believe is resource management, as in capital investments and assets that will drive our performance. There’s a business case process that’s been around for a while, I don’t know how well it’s used within the context of managing organizational performance. I think those are the three areas that can be improved.

9. What do you consider best practice in Performance Management?

Some of the research we’ve done suggests that the most important thing is that the organization should have a plan for what they want to do with their Performance Management program. Many organizations adopt it just because others are adopting it, and I’m not sure if they do it completely well in terms of knowing exactly what they want to get from the Performance Management program that they put in place. There are many different frameworks out there that you can use, it doesn’t matter that much which one, as long as you know what you’re trying to accomplish with it. So to me, the key best practice is understanding what it is you want to accomplish and then be disciplined in how you apply it. Many organizations will give up before they actually start to get the results. It’s about these two things: know what you want and be disciplined in applying the tools to get it.

10. What aspects of Performance Management should be emphasized more during educational programs?

Some of the things I talked about earlier, which is what we’re emphasizing in our program here at the Telfer School of Management: it’s about dynamic planning, so creating a plan that allows you to adjust very quickly when conditions change, using data effectively, knowing what data you need and being able to analyze it to make very quick decisions and understanding a little bit about the data infrastructures that organizations use. Change happens so quickly in the information technology field that I think we really need to keep up on the many types of tools that are out there to allow us to capture information.

11. What are the limitations in order to achieve high levels of proficiency in Performance Management among practitioners?

To me I think there’s a sense that most people understand how to do Performance Management, but the field has evolved over the last few years. There are some frameworks and methods out there now that are specific within the domain of organizational Performance Management, so I think that there’s a need for managers to understand that these tools can really enable them to do what they’re doing a lot better; so that’s one, just awareness of what’s happening in the field of Performance Management. And the other, as a lot of people tell me, is the time. Do you want to spend time learning how to apply those tools and frameworks or do you want to get on with the operational activities that you’re doing? Many organizations don’t spend time looking up (from their operational activities) to say there’s a way that we can do things better. I think those are two constraints that I’ve seen.

12. If you are to name in few words the main aspects governing Performance Management today, what would they be?

I would say that data and information obviously is one, because this is raw material that we use to make decisions about what to do, and probably the other is adaptability in Performance Management frameworks, realizing that things really can’t be static, you need to be able to adjust quickly. So putting a program in place and never revisiting it I think is one of the issues that we have to be aware of.

13. We are developing a database of Performance Management subjects and degrees. Which are the subjects/degrees you have come across and at which university?

I know Cardiff University has a Masters on Organizational Performance, I believe that’s what they call it. What we’re seeing in a lot of universities are degrees related to business analytics: Master degrees in Business Analytics or Organizational Analytics. I would say there are probably 50 or 60 such programs launched within the last year. Many of them don’t use the term “managing organizational performance” specifically, but that is the implication of these programs.

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