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System Implementation Challenges
Organizational performance measurement systems are complex constructs that significantly impact leadership decisions, employee behaviors, and management processes and systems. Consequently, there are often many people, process, and technology challenges associated with the implementation or significant upgrade of such monitoring systems. By understanding these potential risks, leaders can put in place mitigating instruments to reduce the overall organizational impact and increase the likelihood that the new measurement system will be accepted and have the desired positive impact on performance.
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Additional Resources
Numerous other StrategyDriven articles provide elaborating information on how to avoid/address many of the challenge points above including:
Principle
Best Practices
- Organizational Performance Measures Best Practice – Predefined and Reinforced Data Standards
- Organizational Performance Measures Best Practice – Documenting Performance Measure Drivers
- Organizational Performance Measures Best Practice – One Source of the Truth
Warning Flag
About the Author
Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.
When developing the picture of organizational performance, many leaders view their metrics in clusters aligned with the organization’s hierarchical structure. While logical, such groupings cannot capture the cross-functional nature of many business processes, systems, and applications. Consequently, the organization’s monitoring system may provide the appearance of healthy performance that is inconsistent with what managers know to exist. Regrouping organizational performance measures often reveals these known issues and brings to light other previously unseen improvement opportunities that can yield great value to the business.
Organizational performance measurement systems are complex structures cascading vertically from the executive suite to the shop floor and stretching horizontally though many different functional workgroups. Consequently, the design of a performance measurement system takes on a high degree of complexity because of the numerous interrelationships between various organizational levels and workgroups and the cross-functional sharing of common metrics. Thus, it is important to employ a multidiscipline team to design the measurement system, one that includes representatives from all levels of the organization as well as each functional area.
A performance metrics system is, in part, a communications mechanism conveying the organization’s performance against stated goals and in doing so reinforces leadership’s commitment to stated behaviors and results. To effectively achieve these objectives, performance measurement system communications must reach their intended audience. Too often, the organization’s metrics remain largely unobserved; residing on desktop computer dashboards or in binders tucked away in filing cabinets. Broad, direct, routine communication of performance measurement system’s output to those affecting the results is therefore necessary to achieve the reinforcement desired.
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