Page 53 - Performance Leadership

42 • Part I A Review of Performance Management

We can expand on this concept to create metrics that drive the right
behavior, in this case collaboration. One of the adverse effects we have
seen is suboptimization, which is what happens when we follow con-
ventional wisdom. But conventional wisdom is not always right. There-
fore, some key metrics should not be assigned to a single performance
owner, but to two performance owners who need to collaborate to
achieve the target, because both own an essential part of the means
and resources. In this case, the targets are not defined for a single busi-
ness domain, but for crossovers between the business interfaces.
A CIO had a problem with the business interface between IT devel-
opment and IT operations. Development was responsible for imple-
menting systems, and operations was responsible for running them,
after extensive acceptance testing. A new performance indicator was
introduced: time used to take new development into production. Both
managers complained, as they did not have the means by themselves
to achieve the target. The CIO rightfully pointed out that they hit the
nail on the head. The metrics drove the behavior to collaborate.

Understanding the Impact of Feedback
Every person needs and likes feedback, even when it is negative feed-
back. It is important to hear how we are doing and how we are perceived.
When feedback is positive, it will spur the displayed behavior. If the feed-
back is negative (but constructive), there is a good chance it will alter
behavior. However, the way feedback is delivered is crucial for how you
will choose to either accept it or not. Let’s have a look at two case stud-
ies to show how organizational culture affected the impact of feedback.

Case Study 1: Positive Impact of Measurement
due to Understanding Company Culture
A claims department of an insurance company has four groups in one
wing of the building—North, South, East, and West. Each day, the
claims are sorted by postal (zip) code and distributed to the right group.
One of the most important performance indicators for the department
is average process time. The sooner a claim is processed and the client
is notified, the higher the customer satisfaction, even if the claim is not
always awarded. It fits the customer value proposition of the company:
clear and fast results. When the average processing time lapsed, the