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How to measure process performance with a well-designed dashboard

An expert in benchmarking for performance management reveals how process performance is hard to analyze without a dashboard that provides the right context.

As 2015 came to a close, APQC conducted its annual priorities survey to better understand the pressing priorities...

and challenges of process and performance practitioners for 2016. We found that process and performance management continue to be top priorities for business excellence practitioners in 2016 (see Figure 1). However, their focus has shifted from the engagement challenges of last year to integrating process performance to show the value of certain processes to the business.

As an organization moves from being function-based to process-based, it shifts its perspective to encompass the entire value chain of work, and focus on its end goals. This, in turn, helps the organization align its process performance management efforts to the organization's strategy. Typically, the business' priorities are not functional in nature. They are large-scale issues such as improving organizational agility, becoming customer-centric or entering a new market. Each of these issues demands an understanding of how the organization creates value and requires aligning the purpose of the organization's processes and overall performance management. All of this is underpinned by employing the right measures and making insights readily available to support decision making.

APQC 2016 annual priorities survey
Figure 1. An APQC survey found process performance to be the top priority among 200 process and performance management practitioners.

What follows are some best practices for using a dashboard to integrate process performance thinking into the organization, and an explanation of the key features of effective dashboards.

Picking the right measures for process performance

The first step for achieving effective performance management of any kind is identifying which measures are strategically aligned and relevant.

Strategic alignment refers to how well measurements are linked to organizational objectives. Best-practice organizations use value stream analysis to align measures with strategic objectives. This entails having senior management or a centralized team analyze the value stream and link measures to high-impact business processes.

For example, the agriculture company Syngenta requires process performance measures that are aligned to the organization's goals. To that end, Syngenta uses a balanced scorecard with objectives that cascade down and align with its processes to indicate how these things are achieved. Ultimately, it uses the same key performance indicators for strategic objectives and process performance.

Storage manufacturer EMC also required process performance measures that were strategically aligned, and worked to identify three measures for each of its end-to-end (E2E) process groups. The E2E process team then conducted a workshop with the process "sponsors" to discuss and agree on the measures for the process groups and to identify the best ones for tracking the process performance of the end-to-end categories. All of the measures were assessed by the group using the following criteria:

  • Is the measure linked to a strategic objective?
  • Is the measure related to revenue?
  • Is the measure customer- or employee-focused?

The selected measures ignored functional boundaries and instead focused on process outcomes. One objective of performance management is to align how resources are allocated and how work gets accomplished with the company's strategic objectives. With this in mind, the teams used EMC's strategic objectives (profitable revenue growth, total customer experience, employee experience, etc.) as guideposts for prioritizing measurements during the selection process.

Just as important as picking the initial measures is regularly re-evaluating them to ensure that they are still relevant and accurate. Organizations need to view performance management as a continuous journey that requires new goals and measures as the organization or initiative matures. They should not, however, cease to monitor original goals and measures. Instead, the definition of success and associated measures should evolve and become more sophisticated.

For example, consultancy Booz Allen Hamilton sought to drive new business from intellectual capital developed in functional communities. It developed measures through three stages of the goal's implementation. The first step was developing its communities, measured by the volume of staff engaged in the communities. The second step was measured through the number of pilot programs created from the intellectual capital developed and shared in the communities. Finally, as these ideas became commercialized, the organization began measuring the amount of revenue generated from the functional communities. In each phase of the initiative, Booz Allen Hamilton carefully matched the measure to the goal and evolved the measure as the purpose changed between phases. This way, each measure continued to have relevancy.

Role of benchmarks to set context

Even more important than reporting metrics to stakeholders is including context. Without context, an organization risks reacting too quickly to a shift in data and instituting unnecessary corrective measures. Providing context means looking at performance over time, between peer groups, and even looking outside the organization for meaning.

For example, EMC's E2E team understands that measurements without context do not provide meaningful information for decision makers. Therefore, once the measures were finalized, the E2E team conducted research to understand and identify external benchmarks to put the performance in context. The research included identifying the top quartile, the median and the bottom quartile performance measures through third-party sites, such as APQC's benchmarking portal, and comparing to peer organizations' measures when possible.

Using this information and the current performance for each measure, the E2E team developed a process category dashboard (see Figure 2) to track performance over time to meet its objectives of understanding which process provides strategic value and identifying and prioritizing improvement opportunities.

EMC process performance dashboard
Figure 2. Storage maker EMC developed this dashboard to track the performance of end-to-end processes.

The dashboard helps decision makers understand the performance of the process. They can scan the dashboard to identify performance issues and drill in to identify opportunities for improvements. The features of the dashboard include:

  • Current performance, which shows the measure's value each month. In collecting this information monthly or quarterly, the E2E team is working to understand the drivers of performance, both positively and negatively.
  • Performance trend provides comparative context for how the measure has performed over the last four quarters and acts as a quick visual cue for decision makers on whether the process is performing well or needs to be investigated further.
  • External benchmarks compares the organization's performance against the top quartile (green), median (yellow), and bottom (red) quartile performance of its peer groups. Using the traditional color-coded rating system allows decision makers to quickly identify relative performance and determine if they need to drill down to the root cause of the performance or prioritize an improvement opportunity.

Managing risk through control points

In addition to picking the right measures and ensuring they have the context necessary to provide value, organizations also include risk management in their process performance. This means mapping out and monitoring where processes intersect and what control points ensure quality, all of which helps decision makers uncover issues that need to be addressed.

For example, to manage risk, some organizations use a summary of controls as part of their process performance dashboards. The summary of controls element shows which business controls are associated with each business process. In addition to identifying the presence and location of control points, it also acts as another dimension for the regulatory body, the audit team and the controls team to use to search for process maps. Quick access to process maps enables these groups to better understand the organization's processes, identify control points, and see which processes relate to high-risk activities.

Though not the only answer to current needs, a well-designed dashboard can help business-excellence practitioners address many of their top challenges. Process-focused dashboards that provide access to strategically aligned performance measures help practitioners start to engage their organizations in process thinking by linking the work they do with the organization's goals. Furthermore, providing context around the performance measures in the dashboard helps decision makers understand what their process performance means and when to drill in further to figure out the root cause and prioritize what needs to be fixed.

About the author
Holly Lyke-Ho-Gland is program manager for process and performance management research at the American Productivity & Quality Center (APQC), a Houston-based nonprofit that provides expertise on business benchmarking and best practices.

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