The end of Performance Management, as we know it. Insights from Bjarte Bogsnes at the PMA 2014 Conference
“The End of Performance Management (as we know it) – why more self-regulation is needed and how Beyond Budgeting can help” was the title of another key presentation offered in the first day of the PMA 2014 Conference, by Bjarte Bogsnes, Vice President for Performance Management Development at Statoil, Norway.
“Can and should performance be ‘managed’ at all?”, “Do we need to think radically different?” – these are some of the questions that Bjarte Bogsnes’s research was aimed at answering.
According to Bogsnes, the current business environment is characterized by volatility, uncertainty, complexity and ambiguity. In this context, managing performance should be replaced with “creating the environment for great performance to take place”.
The means through which Statoil’s Performance Management Development Vice President considers this could be achieved is self-regulation, which is comprised of five key measures:
- Abolishing the calendar year, and replacing it with events and rhythm determined performance activities;
- Introducing more relative KPIs and using more cost unit targets;
- Introducing more transparency, as a control mechanism;
- Aligning through translation, not cascading: team members should adapt the above directions according to their specific needs. The most important results identified by Bogsnes are understanding, ownership and commitment;
- Introducing a holistic performance evaluation: not tying performance to very strictly established number.
Replacing the illusion of being in perfect control with a more human oriented approach is Bogsnes’s advice for changing and upgrading the traditional management.