Now that we know what the stakeholders want; have a strategy to meets those wants, and have a clearly defined system designed to accomplish the strategy along with a scorecard to measure performance and progress, it is time to review the performance and progress. The seventh component of the Leadership System is the Organization Performance Review (OPR) process. A well designed OPR process includes four phases: alignment, analysis, dialog and decisions, and follow through.
1. Alignment of Inputs
The first phase of the OPR process is the alignment of the inputs, including stakeholders, strategy, systems, and the scorecard. Each of the four “cornerstones” provides a piece of the “puzzle” and helps clarify the meaning of the individual results. There are three basic types of metrics, including the performance of the organization system, the progress on the strategy, and the value that is created for the six stakeholder groups. These three types of measures are linked and together provide a complete “picture” of the performance of the organization. The linkages between the three inform the analysis and the dialog to facilitate a deep understanding of the causes and outcomes related to the measures. In short, alignment makes the connections between the performance from the scorecard with the systems, strategy, and stakeholders explicit. This ensures there is clarity between actions and results. With this solid foundation, the next phase is the analysis of the results.
The technical analysis of the results is completed before the review meeting. This allows for a more thorough treatment of the data and the linkages. Also, the analysis before the meeting allows for further research into areas that are not performing as planned to make sure additional data and information are gathered, analyzed, and prepared for the review meeting. Analyzing organization performance often requires a wide variety of methods, tools, and techniques. Analysis methods can range from stoplight charts to visual displays of descriptive statistics to more advanced methods, including regression and modeling. Each method offers different insights, so we often use several types of analyses for a single aspect of the organization. They also provide a way to triage what is included in the meeting agenda. Leadership teams seldom have the time to “plow” through all the measures and analysis that is included in the organization performance. A stoplight chart with color codes helps identify the areas that deserve discussion.
3. Dialog and Decisions
The actual review of the organization’s performance is a process of review, dialog, and decisions. For our purposes, we define dialogue as an open, frank, and professional interchange of ideas to seek meaning and greater understanding to maximize individual and team or organizational learning. To ensure the open and frank exchange of ideas, the OPR process needs to be one where the participants can explore ideas, no matter how “out of the box” they may be, without the fear of being attacked or put down. In other words, a safe place. The leader’s job is to role model respect for people, collaborative approach, and set the tone and norms of behavior for the reviews. This does not mean that team members do not challenge the ideas presented, for that is the essence of a frank and rich dialog. It does mean that when they challenge ideas, they do it in a manner that does not demean the individual, and they do it in a way that is in the spirit of trying to understand. This requires a balance of advocacy and inquiry.
There is an old saying, “what gets’ measured gets done.” But that is only true if someone with authority asks about those measures and the action plans. All the alignment, analysis, and dialog won’t make a difference if you don’t follow-through and make the changes necessary to achieve the desired performance. As one CEO noted,
You have to follow through; you can’t just be a visionary. I used to think people would naturally follow me; I was wrong. I used to think I could just communicate, and they will all jump in there and make it happen—that didn’t happen” (Latham, 2013).
The OPR process is the first of three learning components of the Leadership System. In the next article, we will discuss Reinforcing Behavior and align the incentives with the strategy and values.
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Enjoy the journey!