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The 10 Biggest Mistakes People Make Managing Organizational Performance


mistake #1: rely just on financial statements

Profit and loss, revenue and expenses these are measures of important things to a business. But they are information that is too little and too late. Too little in the sense that other results matter too, such as customer satisfaction, customer loyalty, customer advocacy. Too late in the sense that by the time you see bad results, the damage is already done. Wouldn't it be better to know that profit was likely to fall before it actually did fall, and in time to prevent it from falling?

mistake #2: look only at this month, last month, year to date

Most financial performance reports summarize your financial results in four values: 1) actual this month; 2) actual last month; 3) % variance between them; and 4) year to date. Even if you are measuring and monitoring non-financial results, you may still be using this format. It encourages you to react to % variances (differences between this month and last month) which suggest performance has declined such as any % variation greater than 5 or 10 percent (usually arbitrarily set). Do you honestly expect the % variance to always show improvement? And if it doesn't, does that really mean things have gotten bad and you have to fix them? What about the natural and unavoidable variation that affects everything, the fact that no two things are ever exactly alike? Relying on % variations runs a great risk that you are reacting to problems that aren't really there, or not reacting to problems which are really there that you didn't see. Wouldn't you rather have your reports reliably tell you when there really was a problem that needed your attention, instead of wasting your time and effort chasing every single variation?

mistake #3: set goals without ways to measure and monitor them

Business planning is a process that is well established in most organizations, which means they generally have a set of goals or objectives (sometimes cascaded down through the different management levels of the organization). What is interesting though, is that the majority of these goals or objectives are not measured well. Where measures have been nominated for them, they are usually something like this: Implement a customer relationship management system into the organization by June 2006 (for a goal of improving customer loyalty) This is not a measure at all it is an activity. Measures are ongoing feedback of the degree to which something is happening. If this goal were measured well, the measure would be evidence of how much customer loyalty the organization had, such as tracking repeat business from customers. How will you know if your goals, the changes you want to make in your organization, are really happening, and that you are not wasting your valuable effort and money, without real feedback?

mistake #4: use brainstorming (or other poor methods) to select measures

Brainstorming, looking at available data, or adopting other organizations' measures are many of the reasons why we end up with measures that aren't useful and usable. Brainstorming produces too much information and therefore too many measures, it rarely encourages a strong enough focus on the specific goal to be measured, everyone's understanding of the goal is not sufficiently tested, and the bigger picture is not taken into account (such as unintended consequences, relationships to other objectives/goals). Looking at available data means that important and valuable new data will never be identified and collected, and organizational improvement is constrained by the knowledge you already have. Adopting other organizations' measures, or industry accepted measures, is like adopting their goals, and ignoring the unique strategic direction that sets your organization apart from the pack. Wouldn't you rather know that the measures you select are the most useful and feasible evidence of your organization's goals?

mistake #5: rely on scorecard technology as the performance measure fix

You can (and maybe you did) spend millions of dollars on technology to solve your performance measurement problems. The business intelligence, data mining and 'score carding' software available today promises many things like comprehensive business intelligence reporting, award-winning data visualization, and balanced scorecard and score carding and an information flow that transcends organizational silos, diverse computing platforms and niche tools .. and delivers access to the insights that drive shareholder value. Wow! But there's a problem lurking in the shadows of these promises. You still need to be able to clearly articulate what you want to know, what you want to measure and what kinds of signals you need those measures to flag for you. The software is amazing at automating the reporting of the measures to you, but it just won't do the thinking about what it should report to you.

mistake #6: use tables, instead of graphs, to report performance

Tables are a very common way to present performance measures, no doubt in part a legacy from the original financial reports that management accountants provided (and still provide today) to decision makers. They are familiar, but they are ineffective. Tables encourage you to focus on the points of data, which is the same as not seeing the forest for the trees. As a manager, you aren't just managing performance today or this month. You are managing performance over the medium to long term. And the power to do that well comes from focusing on the patterns in your data, not the points of data themselves. Patterns like gradual changes over time, sudden shifts or abrupt changes through time, events that stand apart from the normal pattern of variation in performance. And graphs are the best way to display patterns.

mistake #7: fail to identify how performance measures relate to one other

A group of decision makers sit around the meeting room table and one by one they go over the performance measure results. They look at the result, decide if it is good or bad, agree on an action to take, then move on to the next measure. They might as well be having a series of independent discussions, one for each measure. Performance measures might track different parts of the organization, but because organizations are systems made up of lots of different but very inter-related parts, the measures must be inter-related too. One measure cannot be improved without affecting or changing another area of the organization. Without knowing how measures relate to one another and using this knowledge to interpret measure results, decision makers will fail to find the real, fundamental causes of performance results.

mistake #8: exclude staff from performance analysis and improvement

One of the main reasons that staff get cynical about collecting performance data is that they never see any value come from that data. Managers more often than not will sit in their meeting rooms and come up with measures they want and then delegate the job of bringing those measures to life to staff. Staff who weren't involved in the discussion to design those measures, weren't able to get a deeper understanding of why those measures matter, what they really mean, how they will be used, weren't able to contribute their knowledge about the best types of data to use or the availability and integrity of the data required. And usually the same staff producing the measures don't ever get to see how the managers use those measures and what decisions come from them. When people aren't part of the design process of measures, they find it near impossible to feel a sense of ownership of the process to bring those measures to life. When people don't get feedback about how the measures are used, they can do little more than believe they wasted their time and energy.

mistake #9: collect too much useless data, and not enough relevant data

Data collection is certainly a cost. If it isn't consuming the time of people employed to get the work done, then it is some kind of technological system consuming money. And data is also an asset, part of the structural foundation of organizational knowledge. But too many organizations haven't made the link between the knowledge they need to have and the data they actually collect. They collect data because it has always been collected, or because other organizations collect the same data, or because it is easy to collect, of because someone once needed it for a one-off analysis and so they might as well keep collecting it in case it is needed again. They are overloaded with data, they don't have the data they really need and they are exhausted and cannot cope with the idea of collecting any more data. Performance measures that are well designed are an essential part of streamlining the scope of data collected by your organization, by linking the knowledge your organization needs with the data it ought to be collecting.

mistake #10: use performance measures to reward and punish people

One practice that a lot of organizations are still doing is using performance measures as the basis for rewarding and punishing people. They are failing to support culture of learning by not tolerating mistakes and focusing on failure. It is very rare that a single person can have complete control over any single area of performance. In organizations of more than 5 or 6 people, the results are undeniably a team's product, not an individual's product. When people are judged by performance measures, they will do what they can to reduce the risk to them of embarrassment, missing a promotion, being disciplined or even given the sack. They will modify or distort the data, they will report the measures in a way that shows a more favorable result (yes - you can lie with statistics), they will not learn about what really drives organizational performance and they will not know how to best invest the organization's resources to get the best improvements in performance.


Todays News by officejax free advertising and ad exchange solutionsMORE RESOURCES updated Thu. July / 18 / 2019
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Period or menstrual bloating is one of the many common pre-menstrual and menstrual symptoms that women face. Bloating is caused due to a change in the ...


5 home remedies for pinkeye - Medical News Today
5 home remedies for pinkeye  Medical News Today

Pinkeye, or conjunctivitis, is a common eye condition. People can relieve irritation, itchiness, and discomfort at home, using various natural remedies.


5 Doctor-Approved Home Remedies for Restless Legs Syndrome - Health Essentials from Cleveland Clinic
5 Doctor-Approved Home Remedies for Restless Legs Syndrome  Health Essentials from Cleveland Clinic

When it comes to treating restless legs syndrome, anything that relieves symptoms is worth trying. Here are 5 options our sleep expert suggests.


Here are some ancient home remedies that are worth trying - Times of India
Here are some ancient home remedies that are worth trying  Times of India

No doubt there are a variety of medicines available in the market to treat different diseases. Yet when it comes to treating problems like a toothache and hiccups, ...


Home remedies: Cold remedies that work - Medical Xpress
Home remedies: Cold remedies that work  Medical Xpress

Cold remedies are almost as common as the common cold, but are they effective? Nothing can cure a cold, but there are some remedies that might help ease ...


Measles Treatment: 8 Home Remedies To Help You Recover - International Business Times
Measles Treatment: 8 Home Remedies To Help You Recover  International Business Times

Measles is an extremely infectious viral illness that can affect anyone. Here are some home remedies to help you should you find yourself sick with measles.


Grandma knows best! Baby home remedies from around the world - TODAY
Grandma knows best! Baby home remedies from around the world  TODAY

In every country around the globe, grandmothers have old-school home remedies to help babies and toddlers with colic, sleeplessness, teething and so much ...


7 natural home remedies for your dog - Mother Nature Network
7 natural home remedies for your dog  Mother Nature Network

When your dog gets sick, in most cases the first thing you should do is check in with your veterinarian. Even mild symptoms could be the sign of something more ...


Note to Parents: Most 'Home Remedies' for Children's Colds Don't Work - Healthline
Note to Parents: Most 'Home Remedies' for Children's Colds Don't Work  Healthline

Survey shows at least half of parents try vitamin C, zinc, and other methods that don't have much impact on colds.


Baby constipation: Top 7 home remedies - Medical News Today
Baby constipation: Top 7 home remedies  Medical News Today

Babies rarely experience constipation, but it can occur. The first treatment for baby constipation is to try home remedies, such as taking their rectal temperature or ...


12 best natural remedies for eczema - Medical News Today
12 best natural remedies for eczema  Medical News Today

Many natural remedies can relieve the dry, itchy skin that eczema causes, including aloe vera, coconut oil, special baths, and essential oils. In this article, we ...


How to get rid of calluses: 7 home remedies - Medical News Today
How to get rid of calluses: 7 home remedies  Medical News Today

Calluses are hard, thick areas of skin that are often uncomfortable. They are rarely serious, and a number of simple home remedies can help reduce their ...


Xuan Juliana Wang recalls immigrant stories in ‘Home Remedies’ - San Francisco Chronicle
Xuan Juliana Wang recalls immigrant stories in ‘Home Remedies’  San Francisco Chronicle

Author Xuan Juliana Wang tells the stories of immigrants in.


Top 10 home remedies for an itchy scalp - Medical News Today
Top 10 home remedies for an itchy scalp  Medical News Today

Whether dandruff, psoriasis, or another condition is causing an itchy scalp, various home remedies can relieve the itch. In this article, we discuss the options and ...


8 natural and home remedies for itching - Medical News Today
8 natural and home remedies for itching  Medical News Today

Itching can be bothersome and cause a person to lose sleep or damage their skin. In this article, learn about a variety of simple remedies to get relief from ...


How to get rid of acne scars: Treatments and home remedies - Medical News Today
How to get rid of acne scars: Treatments and home remedies  Medical News Today

Acne scars can form as a result of moderate-to-severe acne. Many home remedies and medical treatments can help smooth the skin and reduce scarring. Learn ...


9 Home Remedies and Scientific Studies on Their Effects - Interesting Engineering
9 Home Remedies and Scientific Studies on Their Effects  Interesting Engineering

Not all home remedies are equal. Many remain as myths whilst some actually have scientific studies backing them.


Home remedies: Self-care measures to relieve tension-type headaches - Medical Xpress
Home remedies: Self-care measures to relieve tension-type headaches  Medical Xpress

Frequent headaches can interfere with your daily life. But healthy lifestyle choices can help you head off the pain. Start with the basics, including diet, exercise ...


Simple Face Exercises to Delay Signs of Ageing - India.com News
Simple Face Exercises to Delay Signs of Ageing  India.com News

You may have used the best of anti-ageing home remedies and expensive drugstore creams and lotions. You may be eating the right kind of anti-ageing food ...


Atopic dermatitis (eczema): Treatment and home remedies - Medical News Today
Atopic dermatitis (eczema): Treatment and home remedies  Medical News Today

People may find their atopic dermatitis, or eczema, challenging to treat. However, there are many treatments and home remedies that can reduce itching, ...


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