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Performance

Performance goals : Six factors that determine success

March 3rd, 2021
Innovation

Performance goals : Six factors that determine success

March 3rd, 2021
Innovation

Performance, depending on the nature and scale of the organization, the time and effort required to readjust the operational model can vary. But in practice, all successful developments have six factors in common.

The optimal role of employees.

 The prosperity or success of an organization can depend on large-scale rearrangement. Therefore, the smartest minds should be involved. In what is known as “valuation talent,” each employee role makes a quantitative assessment of their value to the company. This is used as a basis for staff role-playing with the most appropriate people. This approach, while improving performance, can also be used to assign new roles and responsibilities as the transformation progresses.

Ride the wave of business

40% of the middle three quintile companies have a positive economic situation. For these organizations, the chances of success increase: on average, 15% reach the top of the power curve and only 8% go down. For this group, too, the application of large movements will affect the performance result, including the following concepts:

 Do not waste your capabilities.

 The immobility approach is still a bad idea. While the chances of the companies in this situation rising from the power curve are 9%, the chances of going down will be 7%. You can definitely do better than that.

Emphasize the benefits of your performance.

 In an evolving industry, the return to performance improvement process is increasing exponentially. This is against the human desire to equate performance changes with rotational ones. If you are lucky enough to be in the retail industry, a single change in performance will increase your chances of rising to 15% and your chances of falling to 2%. Press the accelerator pedal when moving in a fast lane.

Do not spend a lot without good performance.

Growth and productivity are well matched. However, beware of large investment programs as they do not improve overall costs and gross economic margins. Your net chance of success in this scenario is much worse than not making a big move at all. However, combining a large capital-expenditure movement with a large performance gives you a good chance that it is more than seven times better than standing still.

A good job is a job well done

In fact, it is the comprehensive approach to transformation that wins. Organizations in this group, depending on their specific composition of the portfolio and performance movements, increase the chance of entry to 39% versus a 6% probability of falling.

Larger transformation programs require not only a strong team but also clear leadership structures. The central team of the project should be the ground driving force, while the steering committee consisting of representatives of the project management and senior management calls the photos. Besides, project management should allow for agile working methods and modify them if necessary.

Make the performance change simple.

The concepts underlying future operating models are often too complex and obsessively detailed. At first glance, such structures may be superior to simple models. In practice, however, they prove to be a dangerous obstacle because they create countless distractions that increase the risk of ignoring important changes. Simpler approaches are often more successful with basic planning and continuous adjustment.

Think of consumers first.

Traditional market research is related to the past. Today, companies have a huge amount of data that allows them to better tailor their operating model to the needs of their customers. It also explains the range of different models used by leading market players today.

Go for two different speeds in Agility.

The analysis and planning process traditionally takes several months, and the theoretical models dealing with real-world conditions, have led to many unforeseen conditions in the implementation phase. Agility work methods can compensate for the shock of facing the reality of the market and improve performance. Ideas are developed, reviewed, and constantly improved. As a result, the goals remain the same, but they can take different paths.

Source: Mckinsey&Co.

Adapted from articles: Getting the transformation right—six determinants of success and Riding on the wind

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