If you REALLY want to manage performance – Read this …

It’s no secret, I’m a passionate advocate of OKRs.?Many managers today are still struggling with linking employee activity with productivity and performance.?They will keep on struggling until they realise that you cannot manage performance by managing inputs!?I will explain that later.

There are good reasons why OKRs are considered “Silicon Valley’s secret for Achieving Business Goals”.?For example, they:

• Link productivity to strategy and goals – directly!
• Align and connect employees to your goals
• Give clear direction to every team and individual
• Regularly track progress towards goals
• Enable more effective and informed decisions
• Achieve accountability and transparency with measurement

Hands up all managers who would really and sincerely want this in their team, department, organisation.?Of course, we all want it.?Why then are we still trying to use methods that have proven to be ineffective in the past.?We all know the quote, Einstein’s or not, “Insanity is doing the same thing and expecting a different result.”?If we want to achieve something different, we need to DO something different.

What we ARE Managing!

At the very foundation of successful performance management is understanding the difference between Inputs, Activities, Outputs, Outcomes and Impact.?This is how the relationship works.

Somewhere at the top of the organisation goals are set.?Then everyone is expected to find ways of achieving them.?And the general formula is:

• With these resources
• and by performing these activities
• and producing these artefacts
• we will achieve these Outcomes
• that will have the Impact (or goal) that organisational leaders are looking for.

But, with this formula, there is little or no correlation or linkage between the Impact we’re looking for and the Inputs, Activities, and Outputs produced or used.?Managers are managing Inputs and Activities – are people at their desk? are they in the office? how many invoices have they processed? how many calls have they taken?

These are all Inputs and Activities – and very hard to measure objectively.?And the result on the organisation’s goals is Random at best.

What’s the Difference between Inputs, Activities, Outputs, Outcomes, and Impact?

To understand this better, let’s look at what we mean by Inputs, Activities, Outputs, Outcomes and Impact.

• Inputs – are the things used in a project or process.?They are the resources needed to make it work and include peoples time, finances, equipment, etc.
• Activities – are the actions taken in the project or process.?They are what people are doing in the time allocated to deliver the outputs and achieve the outcomes.
• Outputs – are the tangible or intangible things produced in a project or process. ?They could be completed services, products, reports, interventions or other ‘deliverables’. ?They are normally fairly easy to measure and can often be quantified, for example, was it delivered, yes/no, number of completed workshops, emails sent, how many, how long did it take?
• Outcomes – are the short to medium effects, or results, you are looking to have achieved, or the ‘step changes’ that need to occur, in order to achieve the impact or goal. There should be a clear link between the Outcomes and the Impact, or Goal.?They can be considered the changes one might expect to have achieved on the journey towards the goal.?They are often more difficult to define than outputs, because one is looking for changes, not deliverables.?Examples are: improvement in employee retention, improvement in employee engagement, improvement in quality of new hires, increased attendance, etc.
• Impact – is the ultimate objective, or end state, of the project or process. ?In organisational context, they are closely linked to organisational goals, mission and vision, for instance: be an Employer of Choice, Improve profitability, Improve sales performance, Raise brand awareness and credibility.?The Impact is achieved as a result of achieving the Outcomes.

What Should we be Managing?

Managing Inputs, Activities and Outputs, without the link to Outcomes, does not necessarily lead to achieving of the goal.?Why??Because they are not measures that are directly linked to the goal.?They are what we “think”, and sometimes hope, will lead to the achieve of the goal.?A person can spend all day at their desk, yet achieve very little.?Or, have the best equipment, but not use it correctly.?Or they can be working extremely hard, but not in a direction that leads to Outcomes.?It’s the Outcomes that we need to manage, in order to be successful.

So if we turn our “model” around, the new story goes like this:

• To have this Impact (or organisational goal)
• we need to achieve these Outcomes
• and we do that by producing these Outputs
• and performing these Activities
• with these Resources.

That creates a clear and direct linkage between organisational goals, or the Impact that organisational leaders want to achieve, and what it takes to achieve them.

Then, what managers will manage are Outcomes and Goal achievement.?We know what Outcomes we need to achieve the goal, so the question is, are we achieving those Outcomes.?If not, what needs to change – Outputs, Activities or Inputs.?We can more effectively manage the variables based on achieving given, known and measured Outcomes.

The achieving of organisation goals is random if we are managing Inputs.?We need to manage Outcomes if we want to ensure the achievement of organisation goals.

But, this is Easier Said than Done!

But how do we achieve that??The answer is simple, it’s called OKRs, or “Objectives and Key Results.” ?It is a collaborative goal-setting methodology used by organisations, teams, and individuals to set challenging, ambitious goals with measurable results. ?OKRs are how you track progress, create alignment, and encourage engagement around measurable goals.?By doing this, they ENABLE performance, rather than take a backward look at whether we performed or not, which is what current Performance Management does.

Whether talking about office operations, software engineering, not-for-profit, or huge corporations, OKRs work the same for setting goals throughout most organisation levels. ?And, it’s not necessary for the entire organisation to adopt OKRs.?A single team can adopt and use them without impacting the rest of the organisation – except they will be more successful at achieving their goals.

Contact Us to find out More

If you would like to know more about OKRs, or just experiment in an area to see how they can work for you and your organisation, visit our website at www.talentalign.com, email us at [email protected], or connect with us on LinkedIn - https://www.dhirubhai.net/in/gailsturgess/.

Don’t be one of the 80% of organisations that fail the first time they try to implement OKRs. Our OKR coaches work closely with leaders and teams so that OKR best practices successfully become a part of the company culture and help drive your organisation’s success.

We look forward to working with you on your journey.