Predict Ensure performance and critical process parameters are measured objectively, using trends and gap analysis to drive a disciplined approach to solving current or potential performance issues. Companies that have established a real ability to predict and control their performance tend to establish a strong focus in a number of the following areas: Develop a Broader Context They ensure relevant targets through a comprehensive understanding of the business context Ensure Information Flows They focus a flow of appropriate information to the points where decisions will benefit from it Act on Facts They make complex decisions and solve difficult problems by using a rigorous decision making process Promote Self-Analysis They encourage everybody to use measurement and simple analytical tools in all aspects of their work Seek Information Efficiency They harness the potential of IT in ensuring an efficient information system Keep Score They use measurement extensively as a basis for statistically controlling the business To understand these in more detail please click on the relevant image above, or scan through the explanations below Develop a Broader Context Ensure relevant targets through a comprehensive understanding of the business context How well can you predict the next major change to hit your company? What are you doing to identify the potential sources of future change, and to ready your business to benefit from them? Principle In his book “The age of unreason” Charles Handy tells the story of a frog slowly heated in a pan of water, unaware of the slight but ongoing change until it is eventually boiled alive. For the frog to understand what was going on it would have had to be able to see the bigger picture - the broader context. We all live with paradigms, some of which are outdated, but fortunately not fatally so - at least not yet. Safety (and success) lies in being able to identify these paradigms, and the broader context challenges us to do exactly that. The broader context is about extending the horizons of our awareness through exploring global competition, technology shifts, cultural trends etc. Benefits By understanding the broader context we reduce the possibility of major change creeping up on us unawares. We can see possibilities before they happen, and plan for them. We can make changes in a timescale that we can accommodate. The broader context also gives us the opportunity to take advantages of such changes before our competitors do, and to ensure that any changes we make through the normal processes of improvement can benefit from the latest thinking on the subject. Approach A number of vehicles are developing to ensure that companies have access to the broader context: - benchmarking and best practice clubs - organised study visits to companies (in this country and abroad) - management press (particularly HBR) - books written by people from industry All of these are useful in exposing and challenging our paradigms - providing we approach them with an open mind. [Return] Ensure Information Flows Focus a flow of appropriate information to the points where decisions will benefit from it To what extent are people fully equipped with the information they need to do their job? How easy is it in your organisation for people to be able to access and apply the information they want? Principle Increasingly, information and our ability to use it properly will be our sole source of strength. Capital can be reproduced, labour is cheaper elsewhere – all we have is our experience and our creativity – and if our decisions don’t make full and efficient use of that then we are nowhere! Jan Carlson said that a person without information cannot take responsibility, but that a person with information cannot fail to take responsibility. We need to ensure that we design our flow of information to accurately and successfully stimulate that responsibility, and to fully support those same people in the execution of that responsibility. Benefits Clear and concise information will increase our ability to ensure that the right decisions are taken at the right times. By tailoring our flow and format of information we can make the task of taking responsibility simpler and less time consuming. Such information will also clarify any individual development needs, and should increase the job satisfaction of those who need the information. And careful design of our information systems will enable us to compete with all of our knowledge available to us - and this will be a key factor as our competitors move to knowledge based systems. Approach We need to be clear about the potential for every job to use information, based upon the factors that are critical to the success of that job. We then need to tailor the flow and format of that information to make its use as efficient and effective as possible. A key element of this will be the use of information to stimulate a top-box response to issues, such that the management of improvement becomes routine within the organisation. [Return] Act on Facts Make complex decisions and solve difficult problems by using a rigorous decision making process To what extent are the decisions made in your organisation rooted in facts? How does your decision making process ensure that the right data is used in the right way in coming to the correct conclusion? Principle The quality of a decision is a function of the quality of the information on which it was based. Acting on facts is about setting a very clear expectation on how information is to be used in making quality decisions. In large part it is about having a clear process for making decisions, and about creating the expectation that the process will be reviewed, and any deviations challenged. And it is about making full use of the decision making tools that exist to support this process. Benefits Business decisions are often poorly thought out in terms of their implications or in terms of making full use of the opportunities. This is especially true of problem solving where the problem is not fully addressed or the solution creates disruption elsewhere. Formal decision making processes help to address this, and provide a basis for improving the quality of the decision still further through planned improvement of the decision making process. Approach Decision making is clearly not a one-size fits all process. Where such a solution has been attempted, bureaucracy has resulted, and the process has been abandoned or compromised beyond usefulness. Rather, best decision making practice needs to be assimilated into a number of separate guidelines, each with different levels of application: - problem solving (for teams or individuals, quick or involved issues) - option selection - objective setting etc. [Return] Promote Self-Analysis Encourage everybody to use measurement and simple analytical tools in all aspects of their work How good are your people at engineering their own development? What does the organisation do to stimulate and support effective self development? Principle We all have a lot to learn. We just don’t like having it pointed out to us. Better to identify our learning needs ourselves. Modern appraisal systems have gone a long way to recognising this - but in large part this only takes place on an annual, or at most quarterly, basis. We should really seek to establish processes where self analysis and learning is an ongoing thing. Benefits The learning that can result from this will have three major benefits: - it will ensure the ongoing performance improvement of our processes - it will significantly enhance our performance in developing our people - it will reduce the coaching and development burden on managers Approach Promoting self-analysis is about creating the expectation that our people will regularly record and improve their own personal performance. That they will move into their own top-box. We should encourage this with clear processes, and questions about people’s adoption of it. We should expect to see graphs of people’s performance assessments and analyses of the issues, and we should audit and appraise our people on the quality of their self improvement work. [Return] Seek Information Efficiency Harness the potential of IT in ensuring an efficient information system How well do your computer systems support your use of information and learning? What is the scope for using your computer system to make efficient use of measurement data, and for developing a successful knowledge base? Principle Computers hold the key to providing us with an information source about our business that is second to none. Their data handling and storage capabilities mean that analysis and modelling can be undertaken in seconds - but as yet much of this resource lies untapped. We need to rethink the way we use computers without falling foul of the paper based paradigms (such as e-mail overload). We need to develop a database approach to information, and equip our people to use and develop it effectively. Benefits Computers can provide us with insights that would be impossible through wading through physical data. They can streamline data analysis and make the task of producing reports much less time consuming. They can interpret data into forms and relationships that are tailored for each individual role and they can relentlessly observe the performance of the business. Approach Identify what could be better done by a computer, and do it. [Return] Keep Score Use measurement extensively as a basis for statistically controlling the business How do you judge how well you are doing as a business? How well does your performance measurement system reflect the determinants of your future performance, as well as those of your current performance? Principle The Balanced Scorecard was a concept introduced by Kaplan in Harvard Business Review (HBR). Since its publication many companies have adopted the principles of ensuring a balance of top-level measures to reflect both current and potential future performance. Keeping Score is about establishing such a balanced scorecard for your business and ensuring it is supported by other scorecards within the various areas of your business. Benefits On the basis of what gets measured gets done, the balanced scorecard provides a basis for maintaining a balanced focus on all of the foregoing principles. Approach The first step is to determine what the balance of measures should be for your business. The systematic approach reflected within these pages should give you a reasonable start in this regard. The next step is to refine these into an appropriate dashboard of measures and to ensure that this dashboard is an active part of management meetings. 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