Just as misaligned equipment can wreak havoc on production operations, misaligned objectives and goals can seriously disrupt your organization’s overall business.
By Jeffrey S. Nevenhoven, Life Cycle Engineering (LCE)
Misalignment is one of the most common causes for machinery malfunction. Equipment, though, is just one area where misalignment can cause problems. The disruptive and damaging effects of a misaligned business environment can
Customers, shareholders, and employees all experience the deteriorating effects of misaligned objectives, goals, processes, and job duties. Excessive non-value-added work exists in organizations where employees have no clear connection with the business strategy and organizational objectives. Even well-intended performance indicators that are misaligned or cause conflicting expectations result in wasted time and money.
Leveraging performance management
Similar to using methods that ensure rotating equipment is properly aligned, result-oriented organizations apply performance-management methods to establish and sustain a “true- north.” Performance management encompasses activities that ensure objectives, goals, and targets are consistently met—efficiently and effectively. It can focus on the performance of an organization, a department, processes for building products or services, and employees, among other things.
The principles of performance management remind us of several important things—being busy is not the same as producing results, and training, strong commitment, and lots of hard work alone are not results. The major contribution of performance management is its focus on producing useful, cost-effective products and services for customers inside and outside an organization
The performance-management system is a powerful business tool when structured properly, applied universally, and enforced effectively. Result-driven performance-management systems link and align roles, responsibilities, behaviors, processes, and department goals to the business strategy and organizational objectives.
Employees within result-oriented organizations have a clear line of sight between their daily activities and organizational outcomes and understand the impact their daily contributions make. Moreover, a result-oriented workforce consistently meets objectives, goals, and targets through a unified vision, clear and non-conflicting priorities, integrated processes and functions, open communication, and shared responsibilities. Establishing a result-oriented performance-management system directs efforts from busy work back to effectiveness. It provides a framework through shared goals that pull individuals into work teams, work teams into functional teams, and functional teams into an organization team, all centered on a common goal.
This type of system consists of three primary components: the daily management system, process integration, and a performance-review process. When synchronized, these three elements, or sub-systems, communicate, integrate, and align multiple roles, departments, and functions toward common organizational objectives.
The daily-management system creates visibility and communicates performance against goals and objectives. Cascading measures communicate and connect employees to processes, processes to outcomes, and outcomes to goals and objectives. Key performance indicators and visual controls report, in real time, how well the organization is performing against plan. Through real-time monitoring and regularly scheduled review meetings, the daily-management system fosters teamwork in identifying problems quickly, developing corrective actions, and driving continuous improvement. Daily management directly connects business processes, production systems, and employee duties to the heartbeat of the organization.
Process integration removes functional silos and competing goals by incorporating processes and establishing shared responsibility for organizational objectives. Result-oriented organizations recognize that processes are a group of coordinated activities that, together, create value and deliver results. They understand that no single process or function delivers results. Rather, all processes need to work together. Within these organizations resides a mutual understanding that all parts of the process and departmental functions fit together from end to end.
Properly designed, integrated processes facilitate alignment and promote teamwork by identifying interdependencies, coordinating efforts, and setting shared responsibilities. Through standardized and integrated processes, all stakeholders can see the impact their day-to-day job responsibilities have on performance. Employees in such organizations strive and work toward collective outcomes versus personal gain.
The performance-review process takes the performance-management system to a personal level. It aligns employee day-to-day activities with departmental goals and organizational objectives. A successful performance-review process keeps everyone focused on common goals and fosters a culture of engaged, high-performing contributors who understand that their performance has an impact on organizational outcomes. Employees who are provided with realistic stretch goals, growth and development opportunities, timely feedback, ongoing coaching, and appropriate compensation strive to bring value to the organization and deliver positive results.
Contrary to the popular practice of an employee and supervisor meeting once or twice a year to set arbitrary goals and review progress, the result-driven performance-review process is an ongoing effort. The two parties meet regularly to review performance against goals, identify obstacles, implement action plans to ensure employee growth and development, and ensure job duties deliver results.
Ultimately, multiple elements in an organization must work together for sustained success in today’s global economy. Result-oriented companies recognize that the performance-management system by itself doesn’t equal success. If the three sub-systems aren’t aligned, integrated, and managed effectively they can lead to competing initiatives, conflicting priorities, organizational silos, and a disconnected workforce, resulting in undesirable outcomes.
In contrast, result-oriented organizations realize that, when coupled together, driven by a supportive management structure, and led by strong leadership, these three sub-systems enable unique functions and roles to collectively achieve organizational objectives. MT
Jeff Nevenhoven is a senior consultant with Life Cycle Engineering, Charleston, SC (LCE.com) and develops solutions that align organizational systems, structures, controls, and leadership styles with a company’s business vision and objectives. Contact him at jnevenhoven@LCE.com.