Suppose that the leaders at a tech firm saw their costs had grown, disproportionate to their sales.
- Is it a problem with the sales process?
- Are there issues with purchasing or manufacturing?
- Are per unit product costs not reducing as volume increases?
To answer these questions, the leaders can implement a strategy that might find gaps and problems in the appropriate process, then make change based on the findings. That strategy is the discipline of performance improvement.
The discipline of performance improvement is an organization’s targeted and concerted effort to identify ways to become more productive and efficient. It might seem logical, but many organizations do not sufficiently examine their processes and other aspects of their business. That’s why they repeatedly make mistakes which lead to poor performance and even affect employee engagement.
“Performance improvement is improving the results of a company,” said Ronald Gothelf, Grant Thornton Transformation Managing Director. “It should be the responsibility of a performance improvement function within an organization to do process monitoring and function monitoring, to identify where there are improvement opportunities.”
Improve performance in tech
Performance improvement efforts in the technology industry have become widespread, as companies look for ways to become more productive and efficient in a highly competitive environment. Today’s accelerating technology changes, high employee turnover, hybrid work environments and other business shifts mean that the potential for operational and behavioral problems is greater than ever.
So, where does a company start a performance improvement initiative? From Gothelf’s perspective, you go to the front line. “First of all, I think that it's a matter of listening to your own employees — and looking for the pain points. Employees usually have a good sense of where the ‘pain’ is, and where the challenges are.”
You can gather employee feedback with workshops, one-on-one interviews, group discussions or other methods. The key is to make employees feel comfortable sharing their experiences transparently and without repercussions. They should also realize that performance improvement leads to positive outcomes, so it can result in improvements for their own performance reviews, the company culture and perhaps even compensation. All employees like to hear that.
But employee input is not enough. Employees usually only know how things are done today, generally based on their own experience. To identify other areas of opportunity, extend your assessment by looking outside the organization. Qualitative best practices and quantitative benchmarks from outside your organization can help you identify your gaps.
Find the gaps
Gaps or deficiencies can be either organizational or behavioral. The example at the beginning of this piece, where there were gaps in the complete sales process, could be an organizational issue. A behavioral complication might be something like disrespectful actions from employees.
The organizational areas that need improvement are almost always quantitative, and organizations can address them by setting clearly defined goals like sales targets. It can be harder to measure behavioral changes, since they are qualitative indicators. In these cases, employees need to have shared expectations on what is appropriate behavior.
Organizations can communicate performance improvement goals or expectations through a Performance Improvement Roadmap (PIR). A PIR is a thoughtfully drafted document that thoroughly describes the problems, gaps or deficiencies that need to be addressed and then lays out a plan to respond to them. A PIR can be developed for an employee, function or entity.
Technology companies are keenly aware of how technology itself is having a major impact on performance improvement. Gothelf noted, “Technology can be applied to both identify where there are areas for improvement as well as then become the enabler for improvement.”
Many companies already have process metrics that are supported by technology. These metrics can become a component in a functions PIR. For instance, a manufacturing line might have technology controls that monitor productivity and efficiency. Management can review that data and work with the function to agree upon future goals and a path to improvement. Because the metrics are agnostic, the PIR may contain multiple components.
Many businesses have found that some employees are able to work remotely when they can use video conferencing software. Video conferencing is just one component of hybrid environments that lead to less employee travel, more flexible work schedules and other outcomes that can improve performance. Other emergent technologies, including artificial intelligence, augmented and virtual reality and the Internet of Things are having a profound impact on employee performance. Companies inside and outside of the technology industry need to understand these technologies and their capabilities.
Maintain the improvement
When tech companies are truly committed to performance improvement, they make it a continuous process.
So, who should spearhead and maintain continuous performance improvement? There might be a qualified leader in FP&A or Training, but Gothelf pointed out, “Many organizations have an ongoing transformation role, even a Chief Transformation Officer (CTO), that I've seen on a level of a Chief Financial Officer or Chief Operating Officer. The CTO is actually constantly responsible for the evolution of the company.”
A CTO can work closely with a host of company contacts, including management, IT, employee groups and vendors, to develop, evangelize and execute performance improvement initiatives. Performance improvement can have benefits throughout the company, including a more productive workforce, better engaged and more satisfied employees, an improved quality of output and a higher level of efficiency.
However, successful performance improvement takes hard work, active management and open communication. The discipline of performance improvement forces an organization to spotlight where it is falling short, and that can lead to difficult conversations.
Still, the benefits far outweigh the challenges, and these are not the times to shy away from hard conversations. Gothelf warned, “Right now there might be a lot of competitive pressure and uncertainty, but history has shown that the companies which take advantage of the current situation to improve operations are the ones that thrive when the climate turns around.”
Is it time for performance improvement in your organization?
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