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This newsletter is the first of two on how to make strategic planning align with performance management. The focus in this issue is on the big picture while the next issue targets accountability.
Linking strategic planning and performance management Performance Management is most often defined in the context of Human Resources. I have broadened that definition to incorporate more of the organizational outcomes as a whole.
The performance of individuals clearly impacts organizational performance and vice versa. Incorporating both perspectives within the framework of strategic planning provides the best opportunity for success. So, my broader definition of performance management is making continual progress in positively impacting the key indicators of your business.
Your strategic plan provides the basis for what your key indicators are. What is your vision? Improving performance on key indicators requires outlining how the strategic work will be held on an executive level, board level and front-line staff level.
Your strategic plan and the planning process are the tools to deliver what is needed for performance management. They define the changes needed to positively impact your key indicators and answers why the changes are important.
Without a clear strategy, units of the organization will define their own agenda, there will be uncoordinated, unfocused efforts to improve, and the impact on performance will be dramatically diluted.
In short, your strategic plan defines both how and why you will achieve your performance management goals. Your strategic plan should define the best combination of these for sustained improved performance, i. This is done through two assessments, the strategic and the internal.
The outcome is the list of priority, executable strategies for growth. The internal assessment defines priority opportunities to improve performance through better quality, better consistency, lower cost, better fulfillment, better systems, better morale, better leadership etc.
Put together, you have your strategic or change agenda that spurs improved performance, in short, you have the change agenda for performance management. An effective assessment process should yield four to six projects that are a mix of both internally and strategically focused work.
Much more than this and you will begin to see diminishing returns. The resources available for defining and managing the change agenda are scarce and very precious.
Using the strategic plan for performance management Once you have defined the change agenda, you must manage the journey to get there. Two key tools help in that task, metrics and accountability.
First, to the extent possible, each project on your strategic plan should include a metric or measure that tells whether the strategy you have chosen is working e. It is not enough to simply measure if you are implementing the projects in your strategic plan, you need to measure whether or not the projects are working.
Learn more on building successful strategic planning metrics here. We will delve into the second key to managing the journey, accountability, in our next newsletter.
In the meantime, know that without implementing a process to keep team members accountable for their commitments on the strategic plan, their focus will be on the urgent tasks at hand.
Both accountability and metrics require regularly sitting down as a team and assessing progress. What do the metrics tell you? Where is performance sluggish? Are you on the wrong road or do you just need to make some adjustments to the plan?
Putting a strategic plan in place that is regularly discussed and monitored is vital to successful performance management.
The other components of performance management Your strategic plan is but one tool in performance management, though certainly a vital one. It sets the performance agenda, can manage that agenda and can measure whether strategies are, in fact, improving performance.
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