I recently read an article in which the author began with saying he was “dubious about the accuracy of his bathroom scale”. He discussed the many creative ways he manipulated the reading, from adjusting that little ‘magic knob’ on the bottom of the scale, to leaning a particular way to increase the likelihood of a more favorable reading. The author was using this metaphor to drive home the importance of self honesty and commitment to a vision, rather than constantly changing the game fit our needs and wants of the moment.

While this was written in a philosophical (life principles) context, I couldn’t help thinking about it in the realm of managing performance in the workplace. How many times do our management reports behave like that “bathroom scale”? How often do we send out data and numbers, fully aware that human nature will be to play with that ‘little knob’ on the scale, or tilt their ‘management bodies’ to get the readings they want?

As difficult as it may be, it’s up to us as good performance managers to lay out and reinforce a consistent and honest performance vision for the organization. We need to lay out the data in a thoughtful and meaningful way, not simply report numbers and factoids. We need work with our management to understand the data in a holistic manner, embrace the conclusions honestly, and set a firm vision for short and long run organizational improvement. Then, it’s our job to report that data in a meaningful and insightful way that encourages an honest and consistent interpretation of that data vis a vis the organization’s vision.

And therein lies the rub. Many performance management organizations today are still in the mode of reporting data, rather than information. And its not all their fault. The practice of interpreting data to fit our (management’s) individual agendas has been around since the beginning of time. Like I said earlier, it’s human nature.

Your mission as performance managers should be to change that culture. Starting with the top brass, and working through the organization. Most of you are in a unique position of managing the information flow, and as a result, have quite a bit of influence over how data is presented, interpreted, and acted on.

The answer is not to replace that old scale, but to get management to embrace a more honest and consistent interpretation of what the data is telling them. Good performance managers will use their power productively and responsibly to create that “unwavering commitment of performance excellence”.

During the course of managing projects, consultants are often faced with the age old problem of “data denial”. You know the feeling- when you have to look in the mirror and face the fact that its your data, your conclusions, and your recommendations that could affect the lives of many. While some would say it’s a feeling of power or influence, most would argue it’s nothing more than a big headache and major source of stress.

That notwithstanding, let’s look at the source of “data denial”. Data denial stems from those people within organizations that have a lot to lose from accepting the conclusions of your “data story”. Think about it like this- if you knew the conclusion of a book before you started reading, and didn’t like it, would you even begin reading? Such is the case with data. A conclusion that is disliked will breed data denial every time, regardless of how good or bad the data story hangs together. Its a fact of life , that there will always be a large percentage of your clients who will not like what the data has to say. Accept that. Their reaction is something that you have no control over.

What you can do, however, is make damn sure the data, and the data story hang together. If it does, the naysayers will soon meet their ultimate destiny all by themselves. The will assert your conclusions are wrong based on a single piece of data, but soon find out that it’s not one piece of data, but rather a a body of evidence pointing in one direction, that’s driving your conclusion- a direction that likely runs counter to them. And then, with far less fanfare than they arrived with- poof- they’re gone!

So how do you create that defendable “data story”. First, make sure that you’ve scrubbed the information before building it into your conclusions. That should be obvious, but remember, we’re not talking only about spreadsheet errors and omissions here. We’re also talking about the reliability and validity of the data. How was it captured? Was it captured the same way from each respondent? Are the data capture systems reliable? Are clear standards in place to ensure an apple is always an apple?

Secondly, make sure your conclusions aren’t based on a single dimension of performance. For example, a conclusion about high cost will almost always be met with the “oh but we ‘re high cost because we are the high quality producer!”. Maybe true, maybe not. Your conclusion will be a lot more defendable if the service quality dimension of performance is built into the equation, rather than being absent or tangential to the argument. A data story like “your cost is x..and your service level is y. And while it appears you pay for having that high service level, companies a and b generate the same service level at 70% of your cost”. That’ll take quite a bit of wind out of your adversary’s sails, and with any luck, get his energy refocused on problem solving rather than data denial.

Finally, avoid being absolute with your data components. Nothing is perfect. No room for black or white answers. There are times where statistical accuracy and hairline confidence intervals are important (like sending the space shuttle into orbit!), but most of the time, directional accuracy is more than enough. Spend your time finding 10 metrics that point directionally to your conclusion, rather than finding one lone measure that is squeaky clean statistically. I’m not diminishing the importance of statistical accuracy, but what I am saying is that there is a time and place for it. Very often, you can prove your conclusion much faster and feel very confident in your recommendation without the comfort of statistical precision. I’ll take directional accuracy over “analysis paralysis” every time. Oh yeah, and did I mention that for every statistically precise datapoint, there is a statistically perfect rebuttal. Here, the old adage, “you can make statistics say anything” rings oh so true. Pick your battles wisely, and spend your time on obtaining a larger volume of directionally accurate supporting metrics rather than shooting for data perfection.

There are many more ways to “tighten up” your conclusions and avoid falling victim to the data naysayers. The above are just some of the more important ones- the ones that can’t be ignored.

Remember though that “data denial” comes with the territory if you’re in the business of performance management. It can’t be avoided. And even if it could be, most of us would find that to be a very boring place to work. Instead, embrace the challenge knowing that you are armed and well prepared for whatever they throw at you. If you’ve done your best at this, trust the right answer will emerge based on the data you’ve prepared. The naysayers will usually take care of themselves.

In a world driven by efficiency and productivity, many companies are turning toward outsourcing functions that are best delivered externally. That could be because the outsource provider delivers the service more efficiently or effectively. Or it could simply mean that the nature of the service being outsourced has an element to it that makes it non conducive to delivering internally.

Such is the case with many of the functions within the performance management discipline. For a variety of reasons, it makes little economic or practical sense to manage functions like benchmarking, best practice sharing, and other inter-company networking internally. For one, the mere efficiency gained by sharing administration costs of these functions across multiple organizations beats the alternative of “reinventing the wheel” hands down. If you’re not already outsourcing these functions, its something to take a serious look at. In addition to saving considerable amounts of expenditure, companies that have gone down this road have found the cost savings to pale in comparison to the additional value gained.

So let’s assume you decide to outsource some of these key performance management functions. What should you look for in a partner or contractor? There are literally hundreds of consulting firms (large and small) delivering these services, as there are online exchanges, associations, academic institutions, and one-off consortiums. Knowing how to define what you’re looking for, and how to gauge the partner’s capabilities can make the difference between the success or failure of your performance management initiative.

Here are some key attributes to look for when choosing a performance management contractor or service provider:

1. Objectivity and independence:
This is perhaps one of the most overlooked attributes in selecting a PM partner. Consultants, suppliers, and trade associations have for years offered benchmarking and other performance management products for their clients and members. The problem is that most of these organizations have other forces motivating them to deliver such services (e- using metrics that will expose an opportunity to sell a particular product or consulting gig). You’re better off using a service from an organization that specializes in performance management, rather than one that provides it as part of a broader solutions portfolio.

2. Data Integrity:
This one is a real no-brainer. So why is it so many organizations accept such a low standard of data integrity from their service providers? That’s the vexing question. When you look for a benchmarking vendor or performance diagnostic consultant, try and determine how much emphasis they place on data reliability and validity. Look hard at their data validation process, peel back the layers, and then ask yourself if you would trust the data to make critical “life or death” business decisions. My guess is that only a fraction of the data you get today would pass that kind of scrutiny.

3. Content Expertise
Does you vendor bring top industry expertise to the table? Are the people they staff your project with respected players in the areas they support? Could they sniff out performance issues and trends that might lie buried beneath the surface? Or is 70% of your project team staffed with glorified MBA’s with little or no real market experience? Nuff said on that.

4. Market Access
Some of the best insights will come from a very small slice of the market… thought leaders within leading edge companies who have a passion for innovation. The problem is that these companies are not always the big names, and not always easy to find. They are also often unwilling to share information, unless they feel there is an adequate quid pro quo. A vendor that has good market access will not only be able to identify these types of companies for you, but also bring the kinds of relationships that will get you in the door. And sometimes that’s 3/4 of the battle.

5. Action orientation
Nothing is more frustrating than a consultant who has the analytic brains of Einstein, but has never implemented anything in his life. This attribute goes hand in hand with the expertise of the vendor, but also deals with the “propensity for action” that the service provider brings with them. What you want is someone whose bias is for action is high (learn, pilot test, implement- sometimes “going ugly early”), not someone who will get you into a neverending cycle of “analysis paralysis”.

There you have it. 5 key attributes you should look for when bringing on a partner to help with your performance management efforts. A few questions around each of these factors can reveal some key strengths of the vendor, and identify critical weaknesses.

A little time up front can save you a bundle in the long run.

There are many different views of what performance management really means inside of the organizations we manage. Some view performance management as simply the tracking and reporting of corporate performance. Others view it as a formalized process for benchmarking and best practice identification. Some even view it in its broadest context, extending PM well into the implementation of best practices and operational improvements.

While there are no “right” or “wrong” answers on the charter of the performance management function, there are some clear advantages to looking at the function more holistically… from the identification of current performance, all the way to tracking the impact of implementing key changes on the business. By looking at performance management this way, companies can begin building the PM discipline into the very culture of their business.

When we work with clients on their Performance Management process, we try and look at it as a key ingredient to each part of the management cycle- Plan, Do, Check, Adjust. Performance management plays an essential role in each part as illustrated in the examples below.

In planning, the role of performance management is to inform the process. We think of this as a periodic inventory of performance. How are we doing against internal targets AND external benchmarks? What gaps exist? What do the gaps mean? What practices could we/ must we implement to close these gaps? These answers form the basis for the strategic and operating plans of the business. A good analogy for this phase of PM would be the kind of preparation done in the two or three weeks preceding a superbowl or similar championship event. During this phase, the team pours over statistics, films, historical performance in similar situations, and other information necessary in helping it prepare its plan of attack. It’s the performance management function that provides the data and analysis necessary in building that kind of comprehensive and bulletproofed gameplan.

In the “DO” part of the management cycle, the role of performance management takes a back seat to the daily tasks of operating management who are ultimately responsible for implementing the plans of the business. During this phase, the role of performance management is to provide support to operating management in terms of routine performance reporting vis a vis the control limits established in the operating plans. The purpose of these reports is to enable deviations to be quickly detected and resolved. The analogy here is what happens on the field during the big game. Teams are always making small mid course adjustments, often between plays, but frequently during the key plays themselves. Even though they work within the construct of the overall gameplan, the quarterback is always processing information, and making slight corrections to keep the ball moving downfield. Performance management provides the information necessary for operating management to identify and execute these mid course corrections.

In the CHECK phase of the cycle, Performance Management takes center stage once again. It’s the equivalent of the halftime briefing. Management looks at performance versus plan. They analyze key gaps and variances. Why did they occur and what could have been done differently? They use this data to make adjustments to the plan, and inform the team of what aspects of the overall plan must change in order to achieve success. It is a critical analysis activity that is driven by those who are constantly looking at the data and trends, and culling the insights necessary in making effective halftime decisions.

The last part of the cycle, ADJUST, puts management back in the drivers seat to implement the adjustments and changes identified during the halftime briefing. Once again, performance management moves back into a support role, continuing to provide critical indicators that allow management to keep the plan on track without disrupting execution.

While the realities of business are not always this simple, the above analogies are useful in illustrating how the role of performance management changes as the process of management is implemented. At times, performance management takes a very strong leadership role by providing a framework for understanding strengths and weaknesses, and providing the data to support that learning. At other times, they must step out of the way, allowing management to implement their plan, while continuing to provide the information necessary in helping management identify those small but important mid course adjustments.

When viewed from this type of holistic perspective, performance management is more likely to be seen as an integral part of the business process, rather than a distraction or periodic activity that management must endure. It becomes a part of the business culture, rather than another staff activity whose value is questionable to bottom line results.

From one performance manager to another, that’s what we’d call the Holy Grail of PM.

As you walk through life today, look around you. While there are some notable exceptions, it seems to me that more and more people and institutions (from health care to education; municipal services to private business) are turning to mediocrity as the benchmark standard for performance.

Despite the great strides made in customer service and quality during the 80’s and 90’s, we seem to have slipped as an industry. Of course, that’s the opinion of yours truly…someone who has very few “completely satisfied” bones in his body. That notwithstanding, the acceptance of mediocrity is something that, if left unchecked, will destroy whatever culture of innovation still remains alive and well.

So what drives people and companies to accept mediocre performance? What if I told you that the answer lies in the very reward systems that are designed to drive innovation and excellence? Yup, that’s right. The very systems we implement to drive innovation are the very systems holding back the next wave of performance gains we so desperately want.

In particular, there are two aspects of our performance management systems that can cause such an unwanted and unexpected outcome:

The first, relates to how we set goals. Many organizations use external benchmarks and internal data to build their performance targets for a particular reporting period. The problem is that there is a big temptation to look at performance against the average or median of a particular reference group. Sure, we might look at top quartile or top decile, but in the end its human nature to shrug these off as coming from companies that are “way too different from us”. There’s also a tendency to err on the side of “achieve-ability” or “attain-ability”, the notion that we shouldn’t set the bar so high that no one will achieve it and subsequently end up discouraged and de-motivated. No doubt, setting the right goal is an art, and setting goals too high can get you into trouble. But erring on the short side of target setting can be equally destructive. The key to getting this right is to simply have two progressive sets of targets – one based on driving a smaller set of incremental improvements, and other at creating major “jump shifts” in performance. When combined with the right reward mechanisms (discussed below), the two-tiered goal setting philosophy can really help drive that next level of innovation.

The second factor driving performance mediocrity is the reward system itself. That is, what happens when the goal is attained? Our old friend B F Skinner had a lot of great insight on this subject…enough to fill a small library. But here are a few highlights to chew on. Is your reward system based on punishment (the infliction of a negative consequence for failing to meet targets) , negative reinforcement (absence of a negative consequence for achieving targets), or positive reinforcement (giving a positive consequence for achieving results)? Is the schedule for reinforcement (when, where, and how much reinforcement is delivered) predictable or varied? Do you reward different tiers of performance differently? Is the gap between average performers and superstars too small? Is there an implied ceiling in your reward system where there is no benefit for pushing farther?

These and other factors drive what disciples of Skinner call “just enough to get by performance”. For example, the difference between punishment or negative reinforcement (e.g. “achieve this level of performance and you get to keep your job”), and a positive reinforcement (a sliding bonus schedule for meeting, beating, and exceeding expectations) can be enormous. The former keeps the employee’s eye on the standard that will allow him to not lose his job- usually nothing more, nothing less. Not exactly what you want if a paradigm shift is what you’re looking for.

Similarly, having a varied and unpredictable element to your reward schedule can also be a big help. Skinner showed clearly that while “static interval” reward schedules do work, they tend to drive “hockey stick “ performance in which performance accelerates toward the end of reporting periods. If, however, a more unpredictable schedule of reinforcement were added to the scheme, a more sustainable and increasing level of performance would be observed (anyone remember Skinner’s pigeons?).

Some would say these kinds of tactics are a bit too manipulative. To me, that a load of #$%^@!. Human beings react to rewards, punishments, and any other kind of scheme you throw at them. In fact, you probably already have reward systems with these elements built into it. The only difference in what we’re describing here is that we are deliberate about it. We name the ambitious performance levels we want to attain, and we design the reward system to accomplish it. Manipulative? You bet.

So as you visit your local grocery store, doctor’s office, kid’s classroom, or your place of business- look, listen and learn from their mistakes. Then try applying some of these principles. The possibilities in performance are endless. We just need to be smarter about how we set targets, and how we reward those who achieve them.