Performance Management Fundamentals

Lifecycle Performance ProfessionalsLifecycle Performance Professionals

© 2007 Lifecycle-performance-pros.com All rights reserved


Lifecycle Performance

Management

Fundamentals Guide


© 2007 Lifecycle-performance-pros.com All rights reserved

Table of Contents

About this eBook ................................................................................................ 1 Distribution Copyrights ....................................................................................... 1 Introduction ......................................................................................................... 2 What is Performance? ........................................................................................ 2 What is Performance Management? .................................................................. 2 What is Lifecycle Performance Management™? ................................................ 4 The Lifecycle Performance Management Model ................................................ 5 Organizational Performance and Best Practices Analysis .................................. 7 The Lifecycle Performance Framework .............................................................. 8 Lifecycle Performance Management Best Practices ........................................ 10 The Organizational Performance and Best Practices Analysis ......................... 22 The Best Practices Roadmap ........................................................................... 24 The Lifecycle Performance Roadmap .............................................................. 25 Government Performance Framework ............................................................. 32 Decision Support Systems ............................................................................... 45 Lifecycle Performance Methodologies .............................................................. 47 Defining Phase ................................................................................................. 48 Planning Phase ................................................................................................ 49 Executing Phase ............................................................................................... 50 Monitoring Phase .............................................................................................. 51 Reporting Phase ............................................................................................... 52 Performance Management Templates ............................................................. 53 Performance Management Glossary ................................................................ 63

Tables and Figures

Figure 1 - The Lifecycle Performance Management Model ......................................... 6

Figure 2 - Lifecycle Performance Framework .............................................................. 8

Figure 3 - Performance Index Scoring Table .............................................................. 23

Figure 4 - Best Practices Roadmap ............................................................................. 24

Figure 5 - Lifecycle Performance Roadmap ............................................................... 25

Figure 6 - Lifecycle Performance Methodologies ...................................................... 47


© 2009 Lifecycle-performance-pros.com All rights reserved 1

About this eBook

Hi and thank you for downloading my Lifecycle Performance Management Fundamentals Guide. This eBook will help you approach performance management more successfully by introducing the Lifecycle Performance Management Model and describing the best practices and key activities that make high performing organizations successful. By reading it you will learn the high-level processes necessary to ensure a smooth, successful performance initiative. You will also find out the essential plans, processes, technology and metrics to successfully manage your organization’s performance, whether it is employee/team performance, process improvement, systems performance, project performance, financial performance or the entire enterprise. This guide will walk you through the chapters of the 120 Day Plan: Step by Step Guide to Implementing a World Class Performance Solution and provide a look into the Lifecycle Performance Roadmap and some of my proven, performance management methodologies. For the complete Lifecycle Performance Management Kit, including the Lifecycle Performance Framework and Roadmap, the 300 page step by step implementation guide, 37 performance management templates and plans, the 120 Day Performance Plan in Microsoft Project, 600 performance metrics and KPIs, 30 illustrated step by step performance management processes, and the Business Intelligence tools guide; all of which complement the high level processes outlined in this eBook, click here

Also, check out my comprehensive and very informative Organizational Performance and Best Practices Analysis. It utilizes a performance index scoring system, a feasibility analysis, and an impact value analysis to identify cost savings opportunities and provide a custom, step-by-step roadmap for your organization to implement immediate performance improvements. It is a must have for organizations that are serious about understanding what makes them tick.

Distribution Copyrights

This eBook has been provided to you free of charge, on the condition that it’s not copied, modified, published, sold, re-branded, hired out or otherwise distributed for commercial purposes. Please feel free to distribute the URL to anybody who may be interested in downloading their own copy.



Introduction

What is Performance?

Organizational performance, in basic terms, is the actual output or results of an organization as measured against its intended outputs or goals and objectives. The key words here are “actual” and “intended”. When performance is at or above the intended goals, accomplishments are returned. When performance is below the intended goals, fewer accomplishments and more failures are the result. The more an organization can set near and long term goals, the more accurate performance can be measured.

What is Performance Management?

Performance management is the foundation of any organization that has a vision and knows where they want to be in the near and long term future. As today’s rapidly evolving business environment challenges organizations to adapt to constant change, the need for organizations to be sure that their projects and activities are aligned with overall strategic goals and business objectives is critical. Performance management is the gauge that lets you know whether or not you are reaching strategic goals and which areas within your service delivery could use improvement. Performance management also justifies whether or not your organization is getting its return on investments. Most important, performance management establishes a culture of high performance where the entire organization is synergistic towards reaching organizational objectives. By definition, performance management is the systematic process by which an organization involves its employees and all stakeholders in the development and implementation of a plan to improve organizational effectiveness and reach organizational objectives. In 1883 Lord Kelvin, a leading physicist of the early 19th century wrote:

“I often say that when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of Science, whatever the matter may be.”



In a nutshell, we implement performance management so that we can quantify in numbers how effective we are at what we do. Below is a list of additional advantages of implementing/re-establishing performance management in your organization.

• Gains visibility into project execution and effectiveness • Analysis of process strengths and weaknesses • Metrics provide inputs for future estimations and planning • Metrics identify the areas for improvements • Metrics can be used to eliminate problem areas and root causes • Establishes a continuous improvement culture across the company • Helps management and employees make well-informed and decisions • Measures at the enterprise, divisional, systems, program, project and

employee levels Why are some performance management initiatives more effective than others? Some performance management plans simply lack one or more considerations or processes that could ensure success. This guide will allow you to look at your organization’s current performance management processes and identify processes that can improve service delivery. This guide explains in simple terms the processes for a successful implementation. It was designed to cover all of the decisions and dependencies that a performance management initiative encounters. Whether you are looking to improve your current business intelligence systems or develop your performance management capabilities from scratch, the Lifecycle Performance Management Kit will walk you through a successful implementation from start to finish. You can buy the best business intelligence tools on the market and you can measure performance based on all the best practice metrics for your industry, but if you don’t have a well organized, proven performance management plan with detailed steps on how to implement the plan, you will only have numbers with little meaning and a culture of misdirected service delivery. Your organization may not be ready to implement all of these processes, as the Lifecycle Performance Management Kit introduces some processes that are for organizations with highly advanced performance programs and well developed strategic plans. However, the kit was developed to guide any organization through the Lifecycle Performance Management Process regardless of their current performance level.



What is Lifecycle Performance Management™?

Lifecycle Performance Management™ is the systematic implementation of an enterprise-wide performance strategy involving all business units, systems and personnel. It is a sequence of management processes, when combined, achieves a complete approach to managing performance from start to finish. Lifecycle Performance Management focuses on all areas that determine the success of an enterprise, including:

• Employees • Departments / Divisions • Processes • Finance • Programs (e.g. implementing organizational policies) • Products / Services • Projects • Business Units / Teams

Lifecycle Performance Management involves integrating key documents into a performance plan, aligning performance to organizational goals, applying best practices, identifying the right metrics, developing a plan to act on the results, and constantly improving the knowledge and performance of your people, processes and technology. Lifecycle Performance Management is centered on the Lifecycle Performance Management Model (illustrated on the next page). The Lifecycle Performance Management Model is broken down into four areas:

• Integrating supporting organizational management documents • Aligning performance through management functions • Implementing performance management best practices, and • Executing key performance management activities



The Lifecycle Performance Management Model



Figure 1 - The Lifecycle Performance Management Model

Utilizing these best practices and processes outlined in this guide will enable you to:

• Develop performance measures that drive decision making • Assure that your projects and activities are aligned with overall

strategic goals • Transform your employees into high performers and ensure team

effectiveness • Identify your mission critical processes and improve those that limit

your organization's performance • Leverage business intelligence tools • Manage change through knowledge and insight. • Get the best performance out of your systems and reach your business

objectives



Organizational Performance and Best Practices Analysis

For less than the cost of one day of training for one employee, I can help your entire organization tap into it's hidden resources and improve performance, increase productivity and save money!

Here's How It Works

The Organizational Performance and Best Practice Analysis consists of 15 general questions about your business and your performance goals and needs, and 36 multiple choice and check all that apply questions which tell me everything I need to know about how you can transform your organization's performance. That's it! That's all you have to do.

The Organizational Performance and Best Practice Analysis then develops:

• an evaluation of 280 key performance management processes

• a performance index analysis identifying your performance strengths, areas for improvement, cost savings opportunities and ways you can leverage your existing resources

• a feasibility analysis identifying which best practices will drive your unique organization the most, based on mission alignment, organizational effectiveness, cost impact and ease of implementation.

• an impact value analysis which identifies which processes will have the greatest impact on your organization based on your current environment and specified needs,

• and a custom performance roadmap that illustrates which processes, and the order you can implement them, to maximize performance in the shortest amount of time.

The performance analysis is completely interactive and flexible. As your organization applies the best practice processes outlined in your Best Practice Roadmap and the recommendations section of the analysis, or if your organization simply changes it's performance needs and values, the analysis will automatically readjust and tell you which processes will continue to make the greatest impact based on your organizational changes.



The Lifecycle Performance Framework

The key activities in the Lifecycle Performance Management Model are based on the Lifecycle Performance Framework. The Lifecycle Performance Framework is a group of performance-related processes and methodologies, sequenced and integrated to effectively raise organizational awareness of performance management and simplify the execution of performance management best practices throughout the performance lifecycle. The Lifecycle Performance Framework consists of five phases: Defining, Planning, Executing, Monitoring, and Reporting.

Lifecycle Performance Framework

Figure 2 - Lifecycle Performance Framework

The Defining Phase is the phase where preliminary management processes are performed. These preliminary processes are those outside of traditional performance management, but which are critical to the success of your performance management initiative. They include mission/objective identification, strategic planning, performance scope development and



performance team development. These are the executive processes that don’t necessarily include participation from all levels within the organization. The focus of the Planning Phase is to start the buzz and get your organization prepared for the cultural changes that will take place during your successful performance initiative. This is the phase where you gain employee acceptance into the performance initiative and put employees into a high performance mindset. It also includes baselining current performance and setting future goals, breaking down functional silos, identifying key processes that drive business success, and ensuring a successful performance management implementation through training. The Executing Phase involves implementing the planned activities outlined in the defining and planning phases. This is where we develop metrics, align performance to organizational objectives, identify cross-functional processes, and integrate data. During the execution phase the performance management team must maintain a climate of open communication with business unit liaisons and executive management, as this is where executive goals are transformed into action. The Monitoring Phase where we track performance in all areas of the organization. This phase involves ensuring that key indicators and thresholds are in acceptable ranges and enforcing quality characteristics. This is where we develop our quality management plan, identify data quality metrics, examine information supply chains and improve processes. The last phase is the Reporting Phase. The Reporting Phase is the nuts and bolts of the performance management initiative. This is where the Performance Management Team analyzes its finding and communicates system, organizational and individual performance to the stakeholders. The reporting phase is the final phase in the Lifecycle Performance Framework, but in many cases it’s the first phase of decision- making processes. This guide covers the performance reporting process, business intelligence tools, performance improvement strategies, SLAs, dashboards and scorecards, and customer satisfaction. The Lifecycle Performance Management Kit provides all of the processes, techniques and frameworks to implement a successful enterprise-wide performance solution. The Organizational Performance and Best Practices Analysis will identify your strengths, weaknesses, and cost savings opportunities, and will plan out the exact steps to reaching your performance goals.



Lifecycle Performance Management Best Practices

The Lifecycle Performance Management Model is centered on 36 best practices. These best practices support the key processes that must be addressed in order to ensure a successful performance initiative. In Lifecycle Performance Management, these best practices are measured throughout all divisions within the organization.

Defining Planning Executing Monitoring Reporting

1. Organizational

Goals and Mission

Management

9. Employee

Acceptance

Management

20. Employee

Performance

Management

30. Quality

Management

33. Project

Performance

Management

2. Performance

Scope

Management

10. Performance

Management

Planning

21. Information

Services

Performance

Management

31. Performance

Data

Management

34. Scorecard/

Dashboard

Development

3. Performance

Team

Development

11. Time

Management

(Planning vs

Implementing)

22. Process

Management

32. Business

Intelligence

Management

35. Customer

Satisfaction

Management

4. Vendor

Performance

Management

12. Leadership

Development

23. Data

Integration

Management

36. Service Level

Tracking

Management

5. Vendor

Standardization

13. Employee

Training

24. Performance

Metrics

Management

6. Organizational

Stability

14. Staff

Motivation

25. Performance

Alignment

Management

7. IT Cost

Management

15. Automated

Asset

Management

26. Cross-

functional Process

Management

8. Performance-

Based Budgeting

16. Systems

Scalability

27. Systems

Management

17. Capacity

Planning

28. Change

Management

18. Enterprise

Policy

Management

29. Procurement

Management

19. IS Training

Lifecycle Performance Management Best Practices

The definitions and best practice processes are as follows:



DEFINING PHASE BEST PRACTICES

1. Organizational Mission and Goals Management – Organizational Mission and Goals Management is the practice of ensuring that organizational mission and goals are well documented and communicated throughout the organization. Identified by executives and executed by management and staff, Organizational Mission and Goals Management is a process that includes participation at all levels and requires continuous validation throughout the maturation and growth of the organization. Organizational Mission and Goals Management includes identifying objectives throughout all business units, personnel, processes and systems and monitoring the progress of meeting those objectives. The objective is to control costs by having people, processes and systems within the organization working toward supporting the mission and goals of the organization.

2. Performance Scope Management – The practice of defining the outcomes, documenting assumptions, and defining the scope of your performance initiative. Performance Scope Management can be approached in several ways such as defining deliverables, functionality and data, technical structure, and enterprise/organizational structure. Performance Scope Management involves setting the high level processes for which the performance management team will approach divisions, support teams and individuals in order to align performance to business objectives. Performance Scope Management ensures that expectations are met by clarifying roles, processes and expectations.

3. Performance Team Development – Performance Team Development is

a critical process in Lifecycle Performance Management. It involves ensuring that the performance team is well aware of the issues facing the organization from the customer, employee, senior management and key stakeholders perspectives. Performance Team Development includes ensuring that there is support and commitment from the CEO, a direct reporting line to executive management, access to systems, data, organizational charts and processes, and liaisons form each of the business units to bridge the gap in communication and operational knowledge.

4. Vendor Performance Management – A low risk vendor conforms to the

GartnerGroup vendor suitability models. The vendor/service provider model assesses the viability of vendors against a set of characteristics that have been proven a low risk, high quality purchase. An organization



that utilizes low risk, as well as high quality vendors and providers, will be less likely to encounter quality, reliability, or supply issues. This practice compares vendors and service providers on their financial viability, organizational stability, quality control, stringent testing for compatibility, independent market support for technology differentiation, and responsiveness to field service issues. We believe that vendors that have best in class capabilities will reduce the risk and associated costs compared to vendors that may offer lower priced products without sound testing, field support, or management practices.

5. Vendor Standardization – Vendor standardization limits the number of

vendors that an organization purchases from. For given assets, an organization selects a limited set of vendors from which products or services can be purchased. Vendor Standardization usually consists of a primary and secondary vendor. By standardizing on fewer vendors, an organization can gain purchasing leverage and reduce incompatibility issues, support issues, vendor liaison requirements, testing of new technology, and administrative costs of vendor management. While it may limit the available selection of technology and features somewhat, it enables larger discounts with volume purchasing. Vendor standardization is part of a comprehensive asset management process that includes establishment of procurement procedures and policies, and compliance monitoring and management.

6. Organizational Stability – Stability of an organization is critical to keeping

the staff members and teams consistent and focused. It enables the maturation of processes, procedures, and talent. Constant reorganization, management changes, and political infighting takes a toll on moral, turnover, costs, risk and progress.

7. IT Cost Management – IT Cost Management is the financial management of your network that measures the total cost of IT services on a regular basis, compares the costs to industry benchmarks, and makes decisions on changes that include financial, not just technical, objectives. The process, policies, and tools are continuously and regularly applied to track progress and optimize spending. With IT Cost Management frameworks, such as TCO Lifecycle Management, proper technology refresh cycles can be established and investments can be verified as having positive financial impact and returns prior to implementation.

8. Performance Based Budgeting – A results focused planning and budgeting framework which focuses on three elements: the strategy (how to achieve outcome), outputs (activities to achieve final outcome), and the result (final outcome). Performance-based budgets use missions, goals and objectives to justify funding. Through the allocation of resources, performance-based budging achieves specific objectives based on



program goals and measured results. As a result, it is possible to understand which activities are cost-effective in terms of achieving the desired result.

The Lifecycle Performance Management Kit provides all of the processes, techniques and frameworks to implement a successful enterprise-wide performance solution. The Organizational Performance and Best Practices Analysis will identify your strengths, weaknesses, and cost savings opportunities, and will plan out the exact steps to reaching your performance goals.



PLANNING PHASE BEST PRACTICES 9. Employee Acceptance Management – Employee Acceptance

Management is the process of gaining employee buy-in by emphasizing performance expectations from the top level down. Employee Acceptance Management involves transforming employees into a high performance mindset, communicating employee expectations and enabling them to understand the impact that their specific role has on the success of the organization.

10. Performance Management Planning – Performance Management

Planning is the practice of defining the performance strategy and prioritizing activities according to that strategy—to ensure operational alignment with organizational goals. Performance Management Planning involves planning, budgeting, forecasting and allocating resources to support strategy and achieve optimal execution. The Performance Management Plan includes consolidating, monitoring, and reporting on performance outcomes for management, regulatory, and statutory purposes. The ultimate goal of Performance Management Planning is the ability to plan and budget in real-time with dynamic plans that provide real-time feedback to everyone who is part of the process.

11. Time Management (Planning versus Implementing) – Planning is an

essential item on the critical path of every project. Our studies have shown that cutting corners on planning can triple the cost and time to implement enterprise level projects. Planning requires adequate information about the current and target states and accurate estimates of the time and financial investments required to perform all the steps necessary for change. Planning also involves putting together a team of committed and motivated individuals with defined team roles, outlining all tasks, assigning responsibilities, and proactively managing and mitigating risks. The planning process should include the development of a vision/scope document so that each team member understands the project vision, goals, objectives, schedule, and risks. The planning team should allow adequate time for team members to understand, investigate, document, and communicate prior to design and implementation.

12. Leadership Development – Leadership Development is the strategic

investment in, and utilization of the human capital within the organization. The practice of Leadership Development focuses on the development of leadership as a process. With the rapid rate of change in our global economy, leadership has taken on the critical role of adaptation and innovation in the workplace. As companies restructure their business processes and employees, they need solid leadership training to communicate effectively, influence others, maximize creativity, and analyze



your business. How leadership is demonstrated within an organization will determine how successful that organization will be and how successful those who follow will become.

13. Employee Training – Employee training is one of the most powerful cost reduction drivers. Our research shows that the under-trained employee consumes two to six times the amount of technical support (including peer support) than an adequately trained user. Employee training should be performed on systems and applications, being careful to match the training that is delivered in relation to the employee’s job. Training should include a mix of instructor-led classroom training, computer-based training, and just-in-time training to help increase user productivity and reduce support costs.

14. Staff Motivation – A motivated staff is one that will operate as a team and

will pitch in when needed to solve any problem or challenge at hand. They will often exceed expectations and provide critical back up for each other. A motivated staff works harder to meet the goals set by the organization.

15. Automated Asset Management – Electronically supported life-cycle driven asset process. Automated asset management consists of electronically supported procurement, automated inventory, and centralized data repository that are available to financial, administrative, technical planners, system administrators, and the service desk. Managed data within the asset management system consists of contract terms, hardware inventory, software inventory, accounting, maintenance records, change history, support history, and other technical and financial information.

16. Systems Scalability – Systems Scalability is a technology infrastructure that can logically and physically increase in performance and capacity with continuity to meet reasonable growth and change over time. A scalable architecture contains a strategic migration plan for continuous growth and progress. Commitment to scalable architectures enables the rollout of homogeneous hardware and application platforms across users and departments with different processing requirements, while providing technical staff with a common platform to support.

17. Capacity Planning – Capacity planning is a process by which the capacity of the network and assets is measured, compared against requirements, and adjusted as appropriate. The process of capacity planning involves mapping new initiatives to existing infrastructure, understanding the cost dynamics of network bandwidth and storage, memory, and other system resources.



18. Enterprise Policy Management – Enterprise policy management is a managed user environment in which a network or desktop administrator can control, with rules-based logic, which applications, settings, network resources, databases, and other IT assets a user can use. This environment is defined by user ID and is not necessarily machine specific. It is typically implemented by user profiles maintained at the server and synchronized with the client device that a user is logged onto.

Enterprise policy management precludes the user from making changes to

the system; such as introducing unauthorized software or changing settings that may cause conflict with other system resources. As well, a managed environment controls the ease of use of the desktop, providing a common set of applications and access for groups of users or individuals. In this manner, the user is presented only with the tools they have been trained on and need for the job, and assures that changes are managed.

This process, integrated with a system management and change

management policy, can reduce service desk calls and unplanned downtime, as well as create a more predictable platform for system upgrades.

19. IS Training – IS professional training is critical in preparing the IS staff that

are delivering support and service to users to confidently plan and implement initiatives and solutions, and resolve user issues quickly and effectively. IS professional training should be obtained for all staff members on the systems, tools, and applications that are utilized in their daily jobs. Training should include instructor-led training classes, certification courses, seminars, and computer-based training.




EXECUTING PHASE BEST PRACTICES 20. Employee Performance Management – Employee Performance

Management is the systematic process by which an organization involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals. The Employee Performance Management process includes planning work and setting expectations, continually monitoring performance, developing the capacity to perform, periodically rating performance in a summary fashion, and rewarding good performance. Functions within employee performance management are recruit and hire management, compensation management, incentive management, goals management, learning management, competency management and performance measurement.

21. Information Services Performance Management – Information Services

Performance Management is the practice of measuring and monitoring information systems and services and aligning them to organizational goals and objectives. Information Services Performance Management involves supporting employees and customers, aligning business unit objectives to system capabilities and performance, communicating IT planning and performance data in a way that is useful to business unit management, and adapting to growing complexities and constant change.

22. Process Management – Process Management is a series of actions taken to identify, analyze and improve existing processes within an organization to meet new goals and objectives. Process Management involves identifying key business processes and aligning the results of these processes with the strategic goals. Lifecycle Process Management consists of baselining the current environment, identifying critical success factors, redesigning inefficient or ineffective processes, automating processes, identifying process metrics, and training employees on cross functional process.

23. Data Integration Management – Data Integration Management is the practice of gaining business value from information assets through the effective use of data management technologies and best practices. Key components of Data Integration Management include data integration, data quality, database management systems, data warehousing and enterprise information management. Data Integration Management enables an organization to secure a single, accurate, corporate view of key information.

24. Performance Metrics Management – Performance Metrics Management

is the process of identifying quantifiable, results-driven metrics that enable



informed decision making and encourages improved service delivery. Performance Metrics Management involves understanding the business and complexities of the organization, focusing on the desired outcomes, involving all participants for consensus and buy-in, ensuring that formulas and logic are valid, and storing performance results in a centralized location for easy access.

25. Performance Alignment Management – Performance Alignment

Management facilitates the translation of business and functional priorities into strategy. Performance alignment consists of aligning corporate strategy to four areas: division/departmental, workforce, financial and resources. Ultimately, Performance Alignment Management develops a performance strategy that feeds strategic alignment, reflects organizational priorities, and leads to successful execution of organizational goals and objectives.

26. Cross-functional Process Management – Cross-functional Process

Management is the process of breaking down functional siloed thinking and building the organization around core processes rather than specific functional areas. Cross-functional Process Management focuses on those major processes which require support from multiple functional support groups. Ultimately, a well managed cross functional process enables performance tracking throughout each of the functional “hand offs” and weak points within a major process are identified and corrected.

27. Systems Management – Systems management is an automated event management system that proactively and reactively notifies system operators of failures, capacity issues, traffic issues, virus attacks and other transient events. The tools allow monitoring of system status, performance indicators, thresholds, notification of users, and dispatch of trouble tickets. Systems Management provides optimal system performance, quicker resolution of problems, and minimizes failures. Automated solutions are used in support of distributed computing operations processes and policies for performance and failure detection and correction, as well as optimization.

28. Change Management – Change management is the procedure, policies, and tools established to monitor organizational assets to assure that unauthorized changes are not being implemented. It also affirms that a database of changes is available so that changes can be easily recognized during troubleshooting activities

29. Procurement Management – Procurement Management is a set of

policies and procedures to manage the procurement process. Procurement Management does not necessarily designate that all procurement personnel are centralized in a single location; rather it



involves the development of a common set of procurement policies and operating procedures, pooling of information about requests, vendor contracts, asset data, industry information, and qualified procurement skills to ensure the pieces required to get a cost effective deal are properly considered. As well, centralized procurement assures that standardization rules are in compliance.




MONITORING PHASE BEST PRACTICES 30. Quality Management – Quality Management is the process for ensuring

that all the activities necessary to design, develop and implement a product or service are effective and efficient with respect to the system and its performance. Quality Management includes several processes that enable organizations to ensure quality. Among them are quality planning, quality assurance, quality control, quality audits and quality surveillance. The objective of quality management is to define quality system policies, objectives, and requirements, and to explain how these policies will be defined.

31. Performance Data Management - Performance Data Management is the

practice of helping organizations understand the stages of data as it transforms to meaningful information and is distributed throughout the organization. The Lifecycle Performance Reporting Process consists of 5 phases: data gathering, data extraction, data integration, reporting and distribution. Some key tasks within the performance reporting process include gaining buy-in on data gathering methods, determining scope and purpose of what to gather, and utilizing existing data streams and maximizing current report capabilities, and identifying proper tools to invest in to ensure meaningful data.

32. Business Intelligence Management – Business Intelligence

Management is the identification, implementation, and strategic application of technologies that are used to gather, provide access to, and analyze data and information about company operations and performance. It includes creating a process for gaining a more comprehensive knowledge of the factors affecting your business, and helping your company make better informed business decisions. Business Intelligence Management involves carefully identifying which tools fit best with your type of business, your systems architecture, your staff technical capabilities, and data complexities. Among the many types of BI tools include: reporting tools, metadata tools, data warehouse tools, database/hardware tools, ETL tools, and OLAP tools.




REPORTING PHASE BEST PRACTICES

33. Project Performance Management – Project Performance Management

is the discipline of organizing and managing resources to ensure that the project is completed within the defined scope. Project performance reporting is the process of collecting project baseline data and distributing performance information to stakeholders. Implementing projects performance measurement ensures that your reporting clarifies how resources are being used to obtain the objectives of the project.

34. Scorecard / Dashboard Development – Scorecard / Dashboard

Development is the process of planning, identifying and implementing an easy access view of how well the organization is reaching strategic goals. Scorecard / Dashboard Development is the process of displaying whether the activities of a company are meeting its objectives in terms of vision and strategy through a series of graphs, charts, gauges, and other visual indicators that illustrate performance in real time. Scorecard / Dashboard Development includes identifying actionable indicators, lead indicators, alerts and thresholds and enabling stakeholders to access data easily.

35. Customer Satisfaction Management – Customer Satisfaction

Management is the process of ensuring that customer’s expectations are met or exceeded over the lifetime of the product or service. Customer Satisfaction Management involves understanding specifically what, in customer’s eyes, an organization is doing well and where that organization needs to improve in order to better support them. Ultimately, Customer Satisfaction Management leads to identifying opportunities for products and service innovation and serves as a basis for performance appraisal and reward systems.

36. Service Level Tracking and Management – Service levels are predefined by a service level agreement (SLA) between the user community and the IS department and between IS and external service providers. Ideally this is a seamless contract that will establish specific services that IS will deliver to the end-user community with regards to various uptime, performance, and problem resolution criteria. The metrics contained in a SLA need to be specific, measurable, track able, and meaningful.

The Lifecycle Performance Management Kit and Organizational Performance and Best Practices Analysis provides all of the processes, techniques and frameworks to implement a successful enterprise-wide performance solution.



The Organizational Performance and Best Practices Analysis

In most cases, some divisions within an organization manage aspects of performance management better than other divisions. As illustrated in the example table below, some performance management best practices come more natural to certain divisions, depending on the service provided.

• Cost managementAccounting / Finance

• Employee relations, staff motivationHR

• Customer management, Marketing / Sales

• Performance metrics, customer satisfactionOperations (Production, Customer Service)

• Vendor management, asset managementProcurement

• Performance Scope management, Change management Research and Development

• Business intelligence, information systemsInformation Technology

• Customer satisfaction managementCommunications/Public Relations

• Mission and objectives management, policyAdministration

The premise of the Organizational Performance and Best Practices Analysis is to measure all the critical performance management processes necessary to be a high performing organization. The Organizational Performance and Best Practices Analysis is a service provided by Lifecycle Performance Professionals which analyzes an organization's utilization of the 35 performance management best practices and identifies their performance strengths, areas for immediate improvements, and cost savings opportunities. By illustrating where strong performance management best practices exist within an organization, Lifecycle Performance Management leverages those strengths and processes to other areas within the organization which require them.

Best Practice Scoring Systems

Lifecycle Performance Professional’s Best Practice Scoring Systems simplify performance management planning. Our Performance Index, Feasibility Analysis, and Impact Value scoring systems remove the grueling analysis and simplifies decision making.

The Performance Index is a scoring system for measuring your performance management practices and identifying strengths and weaknesses, and



opportunities for cost savings. The Performance Index provides a quantitative method for illustrating the cumulative effect of performance improvements as you move closer to reaching your target performance levels.

Figure 3 - Performance Index Scoring Table

The Feasibility Score provides a quantitative value for identifying best practices that are most aligned to your unique performance management goals. The criteria for measuring the value of each best practice within the organization are Mission Alignment, Organizational Effectiveness, Cost Impact and Ease of Implementation.

The Impact Value is a scoring system for identifying best practices which will provide the greatest impact on your organization once implemented. Impact Value takes into consideration both your organizational objectives and what you want to get out of your performance initiatives.



The Best Practices Roadmap

The Organizational Performance and Best Practices Analysis provides a custom Best Practices Roadmap which illustrates performance management strengths and weaknesses, and provides a logical path for businesses to follow in order to achieve high performance levels in the shortest amount of time. The custom roadmap identifies quick wins and the most feasible best practices and processes which yield the greatest impact.

Figure 4 - Best Practices Roadmap

The Best Practices Roadmap maps performance management best practices to performance categories (people, processes and technology) and the Lifecycle Performance Framework phases. The Best Practices Roadmap provides a logical path for implementing best practice processes. For example, many of the best practices that fall within the Defining phase must be implemented before best practices in the later phases can be fully utilized.



Take Organizational Mission and Goals Management. If the processes within this best practice are not implemented, other best practices will not be as effective and the performance management initiative will surely fail. .By understanding which best practices your organization utilizes well and which divisions and teams have strong processes in place, you can strategically leverage those processes to assist divisions that do not have these practices in place.

The Lifecycle Performance Roadmap

The Lifecycle Performance Roadmap contains 90 processes sectioned into 3 performance areas consisting of 10 management functions and spanning across the 5 performance lifecycle phases. The Lifecycle Performance Roadmap illustrates how performance management relates to various major management support functions within your organization. The processes provide a high level approach to managing performance across your various management functions and helps ensure that your people, processes and technology are working together to achieve your organization’s missions and goals. The roadmap shows how performance management adds value to and is directly represented in each of these major management functions and aligns them to the Lifecycle Performance Framework phases.

Figure 5 - Lifecycle Performance Roadmap



This section briefly explains how performance management plays a part in each of the major organizational management functions. Strategic Planning Strategic planning is the process of determining a company's long-term goals and then identifying the best approach for achieving them. Strategic planning plays a vital role in the performance of your organization. In order for strategic goals to be achieved, strategic planning must be aligned to performance measurements. These performance measurements allow executive management to gauge the effectiveness of the organizational strategic plan and determine how the budget and projects will be setup in the future. How do you ensure that your strategic plan aligns the proper performance goals to organizational objectives? The 120 Day Plan: Step by Step Guide discusses this in detail, and the Lifecycle Performance Management Kit provides the process and templates to ensure your strategic plan is geared towards performance improvement. Organizational Development Often used interchangeably with organizational effectiveness, organizational development is the process through which an organization develops the internal capacity to be the most efficient towards its mission work and to sustain itself over the long term. This definition highlights the explicit connection between organizational development work and the achievement of organizational mission. Performance management directly relates to organizational development, since OD is primarily focused on improving the performance of organizations and the people within them. Whatever your organizational challenges, the starting point is to get a clear, objective view of your organization's performance abilities, such as strengths and limitations. Identifying proper performance attributes is essential, because sound management decisions can only be made when performance attributes are identified and measured accurately.

In order to reach anticipated organizational targets, you must be able to tie the performance and motivation of individuals to the overall strategic objectives. The Lifecycle Performance Framework processes illustrate how performance management, organizational development and strategic planning share interrelated processes to accomplish organizational goals. The 120 Day Plan: Step by Step Guide includes a detailed section on aligning personnel and team performance to strategic objectives. The Lifecycle Performance Management Kit includes templates for managing organizational change and measuring organizational impact. Change Management



Change management is a systematic approach to dealing with change within every perspective of an organization, from systems to personnel to projects to functions. Change management is a comprehensive, often difficult management function to properly implement. There’s the saying “Organizations don't adapt to change; their people do.” With that outlook, it is easy to understand how performance management plays a critical part in managing change. Implementing change within an organization often requires a change in how employees execute things. You can implement the most advanced change management tools money can buy, but if your people don’t buy into or fully support the initiatives, their performance will suffer and ultimately the organization will be ineffective, or less efficient than before. So how do you ensure that your organization is prepared for change? The 120 Day Plan: Step by Step Guide includes a detailed section on the getting employees ready for change and the Lifecycle Performance Management Kit provides change management templates to get started. Project Management Project management is the discipline of organizing and managing resources (e.g. people) in such a way that the project is completed within defined scope, quality, time and cost constraints. A project is a temporary and one-time endeavor undertaken to create a unique product or service, which brings about beneficial change or added value. Performance measurement is an area within the Project Management Institute’s Project Management Body of Knowledge (PMBOK). It is the link between performance management and project management, where cost, schedule and scope performance are measured and monitored throughout each phase of the Project Lifecycle. Project performance reporting is the process of collecting project baseline data and distributing performance information to stakeholders throughout the project. How do you make sure that your reporting clarifies how resources are being used to obtain the objectives of the project? The 120 Day Plan: Step by Step Guide includes a detailed section on the project management performance measurement processes within the PMBOK. Customer Satisfaction Customer satisfaction is the measurement or determination that a product or service meets a customer's expectations, based on predetermined quality and service requirements. It is said that customer satisfaction equals perception of performance divided by expectation of performance. There is a direct relationship between performance and customer satisfaction, where the better you perform to customer expectations, the more satisfied customers will be.



Customer satisfaction is your organization’s level of performance through your customers, employees, and/or stakeholders perspective. In fact, many times customer satisfaction feedback, if requested properly, can provide information and insight for achieving breakthrough increases in organizational performance and effectiveness. When measuring customer satisfaction, organizations should review their objectives and ensure that the customer service strategy is linked to those objectives. But how can you ensure that your organizational objectives are linked to your customer service strategy? The 120 Day Plan: Step by Step Guide includes a detailed section on the performance measurement processes of customer satisfaction and the Lifecycle Performance Management Kit includes sample customer satisfaction surveys. Workforce Performance Management Workforce performance management is the strategic alignment of an organization’s human capital with its business activities. It is a methodical process of analyzing the current workforce, determining future workforce needs, identifying the gap between the present and future, and implementing solutions so the organization can accomplish its mission, goals, and objectives. People are the most important aspect to any organization. Therefore, the performance of the people within an organization will greatly impact the overall performance of the organization. While most employees understand what they need to do, workforce performance management tells them how well they must do it. The greatest benefit to workforce performance management is the process of aligning employee performance to organizational objectives and goals. But how can a manager truly evaluate individuals on their alignment with corporate goals and their contributions to business results? The 120 Day Plan: Step by Step Guide includes a section detailing the importance of aligning employee performance to organizational goals and the steps to accomplish this.

Functions within workforce performance management are Recruit and Hire Management, Compensation Management, Incentive Management, Goals Management, Learning Management, Competency Management, and Performance Measurement. Each of these workforce management functions are described in more detail in The 120 Day Plan: Step by Step Guide. The Lifecycle Performance Management Kit includes templates to help manage workforce performance.

IT Performance Management



IT performance management assists organizations with the increasing demands of maximizing value creation from technology investments, reducing risk from IT, decreasing architectural complexity, and optimizing overall technology expenditures. Behind people, technology is the next critical factor in maximizing efficiency and organizational performance. Many organizations from small to large are using IT strategically to support profitable growth. IT performance management includes maximizing technology to improve service delivery in every area of the organization. IT performance management utilizes such technology as unified management reporting and dashboard tools to enhance performance and drives business processes. How do you find the right technology to enhance your business intelligence? Choosing the right business intelligence tools and aligning IT/IS systems to business objectives is discussed in detail in The 120 Day Plan: Step by Step Guide, and the Lifecycle Performance Management Kit includes vendor summaries and templates for performing your own vendor assessments with weighted criteria. Knowledge Management Knowledge management refers to the guidelines, policies, and practices that an organization uses to create and transfer information to support the performance of the people in the organization. These can include various documents and copyrights, and intangible processes, models and methods that their people use to get work done. The impact of knowledge management on key business results is seen through its potential for improving the performance of business processes. Take call centers for example. They may handle hundreds, even thousands of calls a day. It would be too much too ask for call center representatives to be able to resolve the majority of these calls without a knowledge management system in place. With a knowledge management system, the call center representatives have more information and resources to access and can thus resolve more customer requests. Performance benefits can be seen in such areas as first call resolution, time to resolve, and customer satisfaction. Knowledge management drives performance by linking knowledge to critical functions which impact business and putting the supports in place to ensure knowledge is leveraged across people and circumstances. Quality Management Quality management is a method for ensuring that all the activities necessary to design, develop and implement a product or service are effective and efficient with respect to the system and its performance. Quality management includes several processes that enable organizations to ensure quality.



Among them are quality planning, quality assurance, quality control, quality audits and quality surveillance. Quality planning is defined as a set of activities whose purpose is to define quality system policies, objectives, and requirements, and to explain how these policies will be applied, how these objectives will be achieved, and how these requirements will be met. It is always future oriented. Quality assurance (QA) is defined as a set of activities whose purpose is to demonstrate that an entity meets all quality requirements. QA activities are carried out in order to inspire the confidence of both customers and managers, confidence that all quality requirements are being met. Quality control is defined as a set of activities or techniques whose purpose is to ensure that all quality requirements are being met. In order to achieve this purpose, processes are monitored and performance problems are solved. Quality audits examine the elements of a quality management system in order to evaluate how well these elements comply with quality system requirements.

Quality surveillance is a set of activities whose purpose is to monitor an entity and review its records to prove that quality requirements are being met. Performance measurement is a necessary instrument for quality management because in order to measure quality, you must first apply performance expectations and standards. In the PMBOK, the performance measurement process group falls under the quality management knowledge area. Quality management is discussed in greater detail in The 120 Day Plan: Step by Step Guide and the Lifecycle Performance Management Kit includes templates for creating quality assurance and quality control plans. Process Improvement Process improvement is a series of actions taken to identify, analyze and improve existing processes within an organization to meet new goals and objectives. There are many process improvement methodologies that differ in approach, but the one thing they all have in common is the outcome of better performance. In fact, by definition performance improvement is the concept of measuring the output of processes or procedures, then modifying the processes or procedures in order to increase the output, increase efficiency, or increase the effectiveness of the processes or procedures. Often times, the most critical processes that impact business success are those that require support from multiple functional groups. Identifying and



managing cross-functional processes and removing the functional silos that inhibit business culture are discussed in great detail in The 120 Day Plan: Step by Step Guide. The Lifecycle Performance Management Kit includes a process profile template and a process evaluation scorecard to help you manage those processes.



Government Performance Framework

Many government agencies struggle to develop performance programs that meet the agency’s strategic objectives and annual goals. An effective Performance Management system must be in place to ensure that an agency’s administrative and support functions (budget, financial management, human resources, information technology, procurement, etc.) directly and explicitly serve the needs of program managers in meeting the agency’s strategic and annual goals.

Before you can effectively manage the performance of a government agency, you must first understand the laws and regulations, frameworks and methodologies, and process improvement techniques that are in use today. In the Government Performance Framework, I have listed some of the regulations and methodologies I've encountered in my own experience managing government performance.

Government Performance Management Framework



Controls (Laws, Regulations, Imperatives)

• The 1993 Government Performance and Results Act (GPRA) holds federal agencies accountable for using resources wisely and achieving program results. GPRA requires agencies to develop plans for what they intend to accomplish, measure how well they are doing, make appropriate decisions based on the information they have gathered, and communicate information about their performance to Congress and to the public. GPRA requires agencies to develop a five-year Strategic Plan, which includes a mission statement and sets out long-term goals and objectives; Annual Performance Plans, which provide annual performance commitments toward achieving the goals and objectives presented in the Strategic Plan; and Annual Performance and Accountability Reports, which evaluate an agency's progress toward achieving performance commitments.

• Government Management Reform Act (GMRA) of requires the head of each agency to submit an audited financial statement to the Office of Management and Budget (OMB) annually. The Government Management Reform Act calls for agency financial statements that reflect the results of agency operations and a government-wide financial statement that includes results of government-wide operations. The purposes of Government Management Reform Act (GMRA) are to provide a more effective, efficient and responsive government through a series of management reforms primarily for federal human resources and financial management.

• Clinger-Cohen Act (CCA) of 1996 provides that the government information technology shop be operated exactly as an efficient and profitable business would be operated. Acquisition, planning and management of technology must be treated as a "capital investment." While the law is complex, all consumers of hardware and software in the agency should be aware of the Chief Information Officer's leadership in implementing this statute.

• The Chief Financial Officers Act of 1990 (CFO Act) establishes Chief Financial Officer responsibilities for systematic measurement of performance. The CFO Act requires federal agencies to prepare financial statements and have them audited. Under the act, an Office of Federal Financial Management was established in the Office of Management and Budget and an eight-part program was started to move toward better financial management.



• The President’s Management Agenda (PMA) outlines programs to radically improve performance by making government agencies more citizen-centered, results-oriented and market-based. It focuses on five major issues that all federal organizations must address — budget and performance integration, strategic human capital, competitive sourcing, improved financial performance and expanded electronic government.

• The Program Assessment Rating Tool (PART) was developed to assess and improve program performance so that the Federal government can achieve better results. A PART review helps identify a program’s strengths and weaknesses to inform funding and management decisions aimed at making the program more effective. The PART therefore looks at all factors that affect and reflect program performance including program purpose and design; performance measurement, evaluations, and strategic planning; program management; and program results. Because the PART includes a consistent series of analytical questions, it allows programs to show improvements over time, and allows comparisons between similar programs.

• OMB Circular A-11 covers the development of the President’s budget and tells you how to prepare and submit materials required for OMB and Presidential review of agency requests and for formulation of the budget.

• The U.S. Government Accountability Office (GAO) is known as "the investigative arm of Congress" and "the congressional watchdog." GAO supports the Congress in meeting its constitutional responsibilities and helps improve the performance and accountability of the federal government for the benefit of the American people.

• Federal Financial Management Improvement Act (FFMIA) - The purpose of the Federal Financial Management Improvement Act of 1996 (FFMIA) is to advance Federal financial management by ensuring that Federal financial management systems provide accurate, reliable, and timely financial management information to the government’s managers. The intent and the requirements of this Act go well beyond the directives of the CFO Act and the Government Management Reform Act of 1994 (GMRA) to publish audited financial reports. Compliance with the FFMIA will provide the basis for the continuing use of reliable financial management information by program managers, and by the President, the Congress and the public.

• The Information Technology Management Reform Act of 1996 (ITMRA) is intended to improve the ways that agencies acquire, use, and dispose of information technology (IT) and, thereby, to improve the productivity, efficiency, and effectiveness of Federal programs. The Act requires consideration of IT goals in strategic planning and IT contributions to agency goals and performance.



The Lifecycle Performance Management Kit provides all of the processes, techniques and frameworks to implement a successful government performance solution.

The Organizational Performance and Best Practices Analysis will identify your strengths, weaknesses, and cost savings opportunities, and will plan out the exact steps to reaching your performance goals.

Performance Measures

The Lifecycle Performance Framework is a group of performance-related processes and methodologies, sequenced throughout five phases, and designed to raise organizational awareness of performance management best practices. ISO 9000 is a family of standards published by the International Organization for Standardization (“ISO”). The objective of ISO 9001 is to provide a set of requirements that, if they are effectively implemented, will provide you with confidence that your supplier can consistently provide goods and services that meet your needs and expectations and comply with applicable regulations. Capability Maturity Model® Integration (CMMI) is a process improvement approach that provides organizations with the essential elements of effective processes. It can be used to guide process improvement across a project, a division, or an entire organization. CMMI helps integrate traditionally separate organizational functions, set process improvement goals and priorities, provide guidance for quality processes, and provide a point of reference for appraising current processes. The Performance Reference Model (PRM) is a standardized framework to measure the performance of major IT initiatives and their contribution to program performance. The PRM structure is designed to clearly articulate the cause and effect relationship between inputs, outputs, and outcomes. This “line of sight” is critical for IT project managers, program managers, and key decision-makers to understand how and to what extent technology is enabling progress towards outputs and outcomes.

Enterprise Architecture (EA) builds a holistic view of the organization's strategy, processes, information, and information technology assets. Enterprise Architect ensures that the business and IT are in alignment. EA links the business mission, strategy, and processes of an organization to its IT strategy, and documents this using multiple architectural models or views



that show how the current and future needs of an organization will be met in an efficient, sustainable, agile, and adaptable manner.

Enterprise Architecture operates across organizational and computing "silos" to drive common approaches and expose information assets and processes across the enterprise. The goal is to deliver an architecture that supports the most efficient and secure IT environment meeting a company's business needs.

Total Quality Management (TQM) is a set of management practices throughout the organization, geared to ensure the organization consistently meets or exceeds customer requirements. TQM places strong focus on process measurement and controls as means of continuous improvement. In a TQM effort, all members of an organization participate in improving processes, products, services and the culture in which they work.

The methods for implementing this approach come from the teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M. Juran. A core concept in implementing TQM is Deming’s 14 points, a set of management practices to help companies increase their quality and productivity.

Change Management is a systematic approach to dealing with change within every perspective of an organization, from systems to personnel to projects to functions. Change management is a comprehensive, often difficult management function to properly implement.

There’s the saying “Organizations don't adapt to change; their people do.” With that outlook, it is easy to understand how performance management plays a critical part in managing change. Implementing change within an organization often requires a change in how employees execute things. You can implement the most advanced change management tools money can buy, but if your people don’t buy into or fully support the initiatives, their performance will suffer and ultimately the organization will be ineffective, or worse, less efficient than before.

Every system, personnel, and procedural change within an organization should be implemented with the goal of achieving organizational mission and goals. The actual improvement should be compared to the predicted improvement to assess the effectiveness of the change. This guide discusses managing your organization during its many changes throughout the performance lifecycle. The Lifecycle Performance Management Kit provides all of the processes, techniques and frameworks to implement a successful government performance solution.



The Organizational Performance and Best Practices Analysis will identify your strengths, weaknesses, and cost savings opportunities, and will plan out the exact steps to reaching your performance goals.

Performance Measures

The Balanced Scorecard (BSC) is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.

A Logic Model is a tool used to visually describe the linkages between program goals, activities, and expected outcomes. They describe how a program should work, present the planned activities for the program, describe how activities will be documented, and focus on anticipated outcomes. It is important to remember that logic models present a theory about the expected program outcome. They do not demonstrate whether the program caused the observed outcome. Logic Models display the sequence of actions that describe what the program is and will do, and how investments link to results. Logic Maps often include five core components:

1. INPUTS: resources, contributions, investments that go into the program

2. OUTPUTS: activities, services, events and products that reach people who participate or who are targeted

3. OUTCOMES: results or changes for individuals, groups, communities, organizations, communities, or systems

4. Assumptions: the beliefs we have about the program, the people involved, and the context and the way we think the program will work

5. External Factors: the environment in which the program exists includes a variety of external factors that interact with and influence the program action.



Key Performance Indicators (KPIs) are quantifiable measurements that reflect the critical success factors of an organization. Based on beforehand agreed measures, they reveal a high-level snapshot of the organization. To achieve a particular target level of Key Performance Indicators for a company, every department has to work in synergy towards it. For this purpose, all the units of an organization need to define their respective KPIs, which should in turn work towards accomplishing the overall KPIs of the organization.

Critical Few is the concept that focusing on the critical few objectives (CFOs) that add the most organizational value and channels energy to consistently deliver results that meet organizational objectives will, in turn, yield positive results. Establishing critical few objectives helps organizations manage time effectively as well as sets priorities based upon those “Critical few” responsibilities and activities needed to achieve its goals Inputs, Processes, Outputs, Outcomes A project involves the transformation of inputs into an output or product. Project inputs are the various needs and resources that projects can draw upon as it sets out to accomplish its work. Processes plan and control the performance or execution of a project. Processes deliver OUTPUTS. In other words, what pops out of the end of a process is an output. Outputs are only produced (or should only be produced) because there is a customer of the process who wants them. Outputs can usually be seen, felt, or moved about. An OUTCOME is a level of performance, or achievement. It may be associated with the process, or the output. Outcomes imply quantification of performance.

Scorecards and Dashboards have become the popular method for communicating and displaying complex data in visual, more simplistic views. Often the two terms get used interchangeably. While both scorecards and dashboards display organizational performance in a visual output, there are important distinctions between the two.

Scorecards often illustrate performance data over a period of time. They represent a broader organizational strategy and are designed to show progress toward objectives and goals; kind of like a report card.

Dashboards are simply a series of graphs, charts, gauges and other visual indicators that illustrate performance in real time. While dashboards don’t always have to be in real time, they often represent up-to-the-minute information depending on the situation. For example, a sales team manager may not need to see real time information and daily information may be just fine. On the other hand, a call center manager may need up to the second knowledge of a critical system going down.



Diagnostic Indicators are performance events determined to be the signs of an overlying problem. In the performance field, diagnostic indicators give analysts clues for what problems may be arising within an organization. Diagnostic indicators are the clues that identify performance management problems.

Exception Reporting is the selection and highlighting of objects that are in some way different or critical. Results that fall outside a set of predetermined threshold values (exceptions) are highlighted in color. This enables you to identify immediately any results that deviate from the expected results.

Exception reporting allows you to determine the objects that are critical for further analysis. Exception reporting can be extremely complex, but in it’s simplest project management form, an exception report mainly highlights the differences between the planned results and the actual results and is prepared when such differences are substantial.

Decision Support Tools are software, frameworks and other tools that can be used as part of a structured decision-making process. A few decision support tools include statistical analysis, sampling plan development, data acquisition, ranking systems, data management, compliance/emergency response, modeling, visualization, risk assessment, remedial process selection, cost estimation and long term monitoring and system optimization. Benchmarking is the process of comparing the cost, cycle time, productivity, or quality of a specific process or method to another that is widely considered to be an industry standard or best practice. The result is often a business case for making changes in order to make improvements. Benchmarking is most used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others. A service-level agreement (SLA) is a negotiated agreement between two parties where one is the customer and the other is the service provider. This can be a legally binding formal or informal 'contract'. The SLA records a common understanding about services, priorities, responsibilities, guarantees and warranties. Each area of service scope should have the 'level of service' defined. The SLA may specify the levels of availability, serviceability, performance, operation, or other attributes of the service such as billing. The 'level of service' can also be specified as 'target' and 'minimum', which allows customers to informed what to expect (the minimum), whilst providing a measurable (average) target value that shows the level of organization



performance. In some contracts penalties may be agreed in the case of non compliance of the SLA (but see 'internal' customers below).It is important to note that the 'agreement' relates to the services the customer receives, and not how the service provider delivers that service. The Lifecycle Performance Management Kit provides all of the processes, techniques and frameworks to implement a successful government performance solution. The Organizational Performance and Best Practices Analysis will identify your strengths, weaknesses, and cost savings opportunities, and will plan out the exact steps to reaching your performance goals.

Process Level Improvements

Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises. BPR reached its heyday in the early 1990's when Michael Hammer and James Champy published their best-selling book, "Reengineering the Corporation". The authors promoted the idea that sometimes radical redesign and reorganization of an enterprise (wiping the slate clean) was necessary to lower costs and increase quality of service and that information technology was the key enabler for that radical change. Hammer and Champy felt that the design of workflow in most large corporations was based on assumptions about technology, people, and organizational goals that were no longer valid. They suggested seven principles of reengineering to streamline the work process and thereby achieve significant levels of improvement in quality, time management, and cost:

1. Organize around outcomes, not tasks. 2. Identify all the processes in an organization and prioritize them in order

of redesign urgency. 3. Integrate information processing work into the real work that produces

the information. 4. Treat geographically dispersed resources as though they were

centralized. 5. Link parallel activities in the workflow instead of just integrating their

results. 6. Put the decision point where the work is performed, and build control

into the process. 7. Capture information once and at the source.



Lean Six Sigma a business improvement methodology that maximizes shareholder value by achieving the fastest rate of improvement in customer satisfaction, cost, quality, process speed, and invested capital. The fusion of Lean and Six Sigma improvement methods is required because:

• Lean cannot bring a process under statistical control • Six Sigma alone cannot dramatically improve process speed or reduce

invested capital • Both enable the reduction of the cost of complexity

Ironically, Six Sigma and Lean have often been regarded as rival initiatives. Lean enthusiasts note that Six Sigma pays little attention to anything related to speed and flow, while Six Sigma supporters point out that Lean fails to address key concepts like customer needs and variation. Both sides are right. Yet these arguments are more often used to advocate choosing one over the other, rather than to support the more logical conclusion that we blend Lean and Six Sigma.

The project level indicators are to be used in conjunction with the project standards and management experience as an aid in assessing a project's risk and complexity level. Once the project risk level is determined the Process, Methodology, and Documentation guidelines will suggest the rigor and detail appropriate for that project risk level.

Quality Assurance / Quality Control - Quality assurance (QA) is a set of activities whose purpose is to demonstrate that an entity meets all quality requirements. QA activities are carried out in order to inspire the confidence of both customers and managers, that all quality requirements are being met.

Quality control is a set of activities or techniques whose purpose is to ensure that all quality requirements are being met. In order to achieve this purpose, processes are monitored and performance problems are solved.

The Lifecycle Performance Management Kit provides all of the processes, techniques and frameworks to implement a successful government performance solution. The Organizational Performance and Best Practices Analysis will identify your strengths, weaknesses, and cost savings opportunities, and will plan out the exact steps to reaching your performance goals.



Activity Level Improvements

Strategy Mapping is the process of diagramming how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationship with each other in the four BSC objectives (financial, customer, processes, learning and growth). Strategy Maps are a strategic part of the Balanced Scorecard framework to describe strategies for value creation. Budget Crosswalks, commonly used in finance and budgeting, convert one set of values to another by applying a specific set of business rules and can describe the relationship between the budget’s allocated funds and the programs those funds are expected to impact. Used in the Federal Budget Process, Budget Crosswalks are defined as a, “term for the allocation of budget authority and outlay amounts in a budget resolution to congressional committees according to their jurisdictions and the committees' subdivision of those amounts among their programs or subcommittees.” Activity Based Costing (ABC) is an alternative to the traditional way of accounting. Traditionally it is believed that high volume customers are profitable customers, a loyal customer is also a profitable one, and profits will follow a happy customer. Studies on customer profitability have unveiled that the above is not necessarily true. ABC is a costing model that identifies the cost pools, or activity centers, in an organization and assigns costs to products and services (cost drivers) based on the number of events or transactions involved in the process of providing a product or service. As a result, Activity Based Costing can support managers to see how to maximize shareholder value and improve corporate performance. Activity Based Management (ABM) is a discipline that focuses on the management of activities as a way to improve customer value and profit. ABM includes cost driver analysis, activity analysis, and performance measurement. This technique uses activity based costing information to identify strategies for removing resource waste from operating activities. Main tools employed include: strategic analysis, value analysis, cost analysis, life-cycle costing, and activity based budgeting. The Most Efficient Organization (MEO) is management’s “bid” to perform a certain function. If the MEO wins an A-76 competition, it succeeds or takes over the work of the existing government function. The President’s Management Agenda urges federal leadership to “compete” functions that are commercial in nature. To be competitive with private industry, the team responsible for developing the MEO must design a streamlined, more efficient work organization than is in place today. The MEO generally performs the same work as the government function it is meant to



succeed but aims to use fewer resources while maintaining or exceeding the quality level defined in the PWS. Financial Management is the [planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization. The Office of Federal Financial Management (OFFM) was created within the Office of Management and Budget (OMB) by the Chief Financial Officers (CFO) Act of 1990. OFFM, led by the OMB Controller under the direction of the Deputy Director for Management, is responsible for the financial management policy of the Federal Government. OFFM responsibilities include implementing the financial management improvement priorities of the President, establishing government-wide financial management policies of executive agencies, and carrying out the financial management functions of the CFO Act. The Strategic Prioritization and Planning (SP2) process is an evolution of Quality Engineering Methods, including Quality Function Deployment and Design for Six Sigma, and incorporates various dynamic aspects to form a portable and powerful decision making environment. The process can be tailored to any desired level of detail to enhance the decision making process for investment strategies as more information becomes available. The end product allows for “what if” games to be played through a dynamic and interactive environment and the results of the process can be the foundation for detailed strategic road mapping and quantitative technology assessments and tracking. SP2 is a living process that should guide strategic planning and be continuously updated as a program evolves.

Portfolio Analysis is a method to improve Government business practices by analyzing a portfolio of systems as a whole, rather than analyzing individual acquisition programs. Portfolio analysis is the art and science of allocating scarce resources to satisfy strategic objectives. In literature, this form of analysis is described as a dynamic decision process, a resource allocation process, or a manifestation of a business strategy. In government, as well as in the private sector, portfolio analysis helps senior management determine where and how to invest for the future. In short, it is a technique to determine how to best spend limited dollars. Portfolio analysis steps include gathering life cycle cost data for the various systems that will be analyzed, establishing a scoring system using subject matter experts to determine how effectively current and future systems match capabilities to requirements, and developing a means to display results by which decision makers can examine risk-reward analysis and conduct trade-offs.

Business Case Analysis is a method companies use for project selection. It analyzes how fulfilling the business case for the project will implement the corporate strategy and sustain the competitive advantage of the company.



The business case can further be developed into the business plan with the addition of more details. Your can convert the business case to action steps and major milestones in order to develop a plan that will guide your venture through the entire project lifecycle, including that of the project outcome. Performance-Based Budgeting is a results focused planning and budgeting framework which focuses on three elements: the strategy (how to achieve outcome), outputs (activities to achieve final outcome), and the result (final outcome). Performance budgets use missions, goals and objectives to justify funding. Through the allocation of resources, performance-based budging achieves specific objectives based on program goals and measured results. As a result, it is possible to understand which activities are cost-effective in terms of achieving the desired result.

The Lifecycle Performance Management Kit provides all of the processes, techniques and frameworks to implement a successful government performance solution. The Organizational Performance and Best Practices Analysis will identify your strengths, weaknesses, and cost savings opportunities, and will plan out the exact steps to reaching your performance goals.



Decision Support Systems

Decision Support Systems include software, frameworks and other tools that can be used as part of a structured decision-making process. Types of decision support systems include information control models, paradigm models, decision models, simulation models, visualization models and process models.

My Organizational Performance Analysis measures your organization’s utilization of various decision making processes and decision support systems and tools.

The Performance Management Kit provides all of the tools, templates and methodologies to implement performance management processes in-house, leveraging your current resources, and saving you thousands in consulting fees and expensive tools.

See Decision Support Systems and Tools Framework on the next page.



Learn details about each of these decision support systems here http://lifecycle-performance-pros.com/index.php?option=com_content&view=section&layout=blog&id=10&Itemid=52



Lifecycle Performance Methodologies

The Lifecycle Performance Methodologies (some shown in the image below) are discussed in detail throughout The 120 Day Plan: Step by Step Guide and in the Methodologies Guide. Each of the 43 methodologies is a step by step process to managing performance throughout the five phases of Lifecycle Performance Management.

Figure 6 - Lifecycle Performance Methodologies

The Lifecycle Performance Management Kit is sectioned into the five Lifecycle Performance Management phases. As you will quickly find out, your organization probably has some or many of these processes already in place. The goals should be to identify which process your organization is in need of the most and follow the Lifecycle Performance Management Model to help you implement them. The Performance Management Kit includes several templates and methodologies within each of the phases to help your organization document it’s planning and processes and successfully execute these performance management best practices.



Defining Phase

The topics discussed in the defining phase of The 120 Day Plan: Step by Step Guide include:

• Identifying/re-examining organizational mission and business objectives

• Defining Business Objectives • Developing a strategic plan that will lay the foundation of your

performance plan • An exercise for linking corporate strategy to executive, managerial, and

individual goals • Determining the scope of your performance initiative • Developing a winning performance management team

The templates included in the defining phase of The 120 Day Plan: Step by Step Guide include:

• Business Objectives Alignment • Organizational Impact Assessment • Risk Assessment • Roles and Responsibilities Checklist • Strategic Alignment Template • SWOT Analysis Template • Vision and Performance Scope Definition Template

The processes included in the defining phase of The 120 Day Plan: Step by Step Guide include:

• Lifecycle Performance Management Model • Lifecycle Performance Framework • Lifecycle Performance Roadmap • Lifecycle Performance Methodologies • Strategic Planning Lifecycle • Strategic Performance Management Planning Process



Planning Phase

The topics discussed in the planning phase of The 120 Day Plan: Step by Step Guide include:

• Breaking down “functional” thinking within your organization • Identifying key processes that drive the success of your business • Base lining your current level of performance and setting future

performance goals • Developing a performance metrics repository and storing

organizational performance data • Ensuring a successful performance management implementation

through training The templates included in the planning phase of The 120 Day Plan: Step by Step Guide include:

• Communication Plan • Gaining Employee Acceptance Checklist • Metrics Repository Template • Performance Management Plan • Planning Session Template • Process Evaluation Scorecard • Process Profile Template • Report Repository Template

The processes included in the planning phase of The 120 Day Plan: Step by Step Guide include:

• • Siloed vs Cross Functional Management • Process Performance Lifecycle • OLAP Database - Star Schemas

• Sample Metrics Repositories



Executing Phase

The topics discussed in the executing phase of The 120 Day Plan: Step by Step Guide include:

• Developing simple, unique measurements that go beyond industry standards

• The anatomy of a performance measurement • Aligning performance to corporate strategy • Aligning business units to organizational objectives • Aligning workforce performance to organizational objectives • Aligning financial performance to organizational goals • Aligning IT/IS performance to organizational objectives • Avoiding common pitfalls in aligning performance to organizational

strategy • Identifying the cross-functional processes that affect product / service

delivery • Integrating data collection into existing workflows

The templates included in the executing phase of The 120 Day Plan: Step by Step Guide include:

• Data Management Tool Evaluation Template • Data Warehouse Tool Evaluation Template • LPP Methodologies Implementation Template • Performance Methodology Implementation Template • Vendor Assessment Weighted Criteria Assessment

The processes included in the executing phase of The 120 Day Plan: Step by Step Guide include:

• Performance Lifecycle • Workforce Performance Lifecycle • IT/IS Performance Management Lifecycle



Monitoring Phase

The topics discussed in the monitoring phase of The 120 Day Plan: Step by Step Guide include:

• Developing a Quality Management Plan for accurately measuring performance

• Identifying Data Quality Metrics • Measuring the overall contribution of your Information Supply Chains to

business objectives • Continuously improving processes and performance based on data

collection and reporting • Ensuring a successful Project Management Program through

Performance Measurement The templates included in the monitoring phase of The 120 Day Plan: Step by Step Guide include:

• Change Management Template • Organizational Change Management Template • Quality Assurance Surveillance Plan Checklist • Quality Control Checklist • Quality Management Plan

The processes included in the monitoring phase of The 120 Day Plan: Step by Step Guide include:

• Lifecycle Data Quality Management Process • Information Supply Chains • Lifecycle Performance Improvement Process



Reporting Phase

The topics discussed in the reporting phase of The 120 Day Plan: Step by Step Guide include:

• The Performance Reporting Process • Choosing the right Business Intelligence Tools for your data

needs/architecture • Developing a strategy for identifying performance improvement

opportunities • Establishing and implementing service level agreements • 7 key steps in establishing a Service Level Agreement • Service Level Agreement checklist • Choosing key performance indicators for report automation and

dashboard reporting • Ten characteristics of a good KPI • Scorecards versus Dashboards • Planning your dashboard/scorecard implementation • 3 steps to creating a performance dashboard/scorecard in Microsoft

Excel • Measuring and reporting customer satisfaction • Bringing it all together for a successful performance initiative

The templates included in the reporting phase of The 120 Day Plan: Step by Step Guide include:

• Dashboard Template • Data Warehouse Data Model • Employee Appraisal Form Template • Employee Performance Indicators Template • Lessons Learned Template • Performance Management Report Log • Training Needs Analysis Template

The processes included in the reporting phase of The 120 Day Plan: Step by Step Guide include:

• Performance Reporting Process • ETL, OLAP and Data Warehouse Models • SLA Process • KPI Metric Flow • Dashboard Implementation Process • Excel Dashboards • Lifecycle Customer Satisfaction



Performance Management Templates

This guide has illustrated the topics that are discussed throughout The 120 Day Plan: Step by Step Guide. This section outlines the templates that are included in The Lifecycle Performance Management Kit and brief descriptions of each. The performance management templates bring structure and organization to any performance management initiative. These templates are designed to save you time on developing and formatting performance deliverables and money researching what information is most valuable to capture. Created to support the Lifecycle Performance Framework, these templates will help make your performance initiative go smoothly. This section provides a description of each template included in The Lifecycle Performance Management Kit.

Defining Phase Templates

Business Objectives and Alignment - The Business Objectives and Alignment Matrix is a description of the business justification for implementing a performance initiative. This includes the high-level objectives that the initiative is intended to satisfy and the anticipated business benefit of those objectives. Objectives include both enhanced execution of business processes and performance throughout your organization. The objectives are described in terms of the capability expected from the initiative, the business benefit, and the estimated value of that benefit in terms of increased revenue, reduced cost, or some key intangible, such as improved customer relations. These objectives guide the business and system scope of the performance initiative.

Organizational Impact Assessment – The organizational Impact Assessment Template provides a description of the magnitude of changes to roles, responsibilities, skills, and reporting structures should they take place. It is organized by performance activity or interrelated groups of performance activities. The assessment estimates the number of affected staff positions, and identifies the training, staffing, and cultural implications of the changes as well. If alternatives are identified, the relative impacts of each alternative are specified.

Risk Assessment Template – The Risk Assessment Template will help your organization determine the quantitative and/or qualitative value of risks related to recognized threats. The risk assessment template contains a probability/impact matrix and a risk log that captures risk impact, trigger events, probability of occurrence, and mitigation and response strategies.



This tool calculates the two components of risk, the magnitude of the potential loss, and the probability that the loss will occur. This is a valuable template for organizations/teams taking a proactive approach to managing risks throughout the performance initiative.

Roles and Responsibilities Template – The Roles and Responsibilities Template identifies the roles and responsibilities of the individuals within the performance management initiative. It includes the common performance management team member titles and their typical roles, so that you only need to insert the actual team members and additional responsibilities customized to your service delivery. A useful template for organizations engaging in a performance initiative for identifying who is the most qualified to tackle necessary responsibilities for a successful implementation.

Strategic Alignment Template – The Strategic Alignment Template is a scorecard that takes a look at your strategic objectives and strategic measures and how they relate to the four perspectives of the Balanced Scorecard: Customer Service, Financial, Internal Processes, and Learning and Growth. This template will help your organization organize your strategic objectives and document goals and performance. The Strategic Alignment Template provides example objectives and measures for each of the performance perspectives.

SWOT Analysis Template – The SWOT Analysis Template is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in your projects or performance initiative. This template will help you identify the internal and external factors that are favorable and unfavorable to achieving your objectives. This template will help you identify negative factors in order to turn them into positive factors. To simplify the process, included are criteria examples to help you identify those factors. Vision and Performance Scope Definition Template –The Vision and Scope Definition Template is a deliverable style template that simplifies the process of defining the scope of the performance initiative. Understanding the scope of your performance initiative is vital to managing performance and the success of your performance initiative. This template helps organizations document exactly what they will be delivering and what the boundaries of the performance initiative are. Planning Session Template – The Planning Session Template allows you to manage the planning sessions outlined in the defining and planning stages of the Lifecycle Performance Framework. This template includes meeting agendas, agenda item descriptions, discussion leaders and meeting objectives.



Performance Methodology Implementation Template – The Performance Methodology Implementation Template is designed to help you plan and implement the processes identified in the Step by Step Guide to Implementing a World Class Performance Solution. The template simplifies the processes by letting you list the steps outlined in the guide, and document the actions, responsibilities, anticipated results, business objectives supported, and dependencies. Change Management Checklist – The Change Management Checklist is designed for Performance Managers and Performance Team Members to help determine the impact of potential change requests within the performance initiative. The checklist examines the changes that alter the scope of the initiative and require analysis in order to understand the impact on the Performance Management Plan and the stakeholders. Organizational Change Management Template – Some performance management changes are huge and impact your people, processes and organizational culture. These changes can include anything from how the initiative will affect systems, employees and processes, individual and team roles and responsibilities to communication procedures, key performance indicators and the shift of employee expectations and workforce performance. The Organizational Change Management Template allows you to see how your change proposal will affect the performance initiative, staff and the organization as a whole.

Planning Phase Templates

Communication Plan – The Communication Plan Template is a deliverable style document that provides a framework to ensure successful execution of the performance initiative. This Communication Plan Template will help your organization document the methods used to gather and store information. The plan includes a Communication Matrix which contains a distribution structure detailing whom the information will flow to and what methods will be used to distribute it. The Communication Plan Template will help you describe the information to be distributed including specific document names and standard formats to be used. The template will help you manage production schedules and specify the communication processes and structures among team members. Gaining Employee Acceptance Checklist – The Gaining Employee Acceptance Checklist can be used to assist you in ensuring the proper elements are in place to maximize employee acceptance of your performance initiative. This template is linked to the first step of the Lifecycle Performance Framework planning phase. The checklist involves a set of questions regarding the employee’s views of the initiative, which the performance



management team must know in order to ensure a smooth transition with minimal pushback. Metrics Repository Templates – Developing a metrics repository is one of the first steps in managing performance. The Metrics Repository Template includes three metric repository templates that illustrate the performance measures and methods to track them. These templates will help your organization define and classify metrics, validate the parameters and calculations, specify when and how the metrics will be measured, and document baseline performance and performance variances. Report Repository Template – Reporting is the most visible output in the performance management process. As your performance initiative gains momentum and stakeholder’s begin to understand the value and necessity of analyzing performance, the demand for reports from all areas of your organization will increase. The Report Repository Template provides a comprehensive list of all routine reports generated by your organizational departments. This list will be used as a basis for determining reporting requirements in your performance initiative. This report comes with instructions on how to populate the template. Performance Methodology Implementation Template– The Performance Methodology Implementation Template is designed to help you plan and implement the processes identified in the Step by Step Guide to Implementing a World Class Performance Solution. The template simplifies the processes by letting you list the steps outlined in the guide, and document the actions, responsibilities, anticipated results, business objectives supported, and dependencies. Performance Management Pre-Implementation Template – The pre-implementation questionnaire template increases the success of your performance implementation and the overall understanding of the impact the initiative will have on your organization through a series of questions designed to ensure that all stakeholders have buy-in and confidence in the success of the initiative. This questionnaire requested feedback from these stakeholders and captures potential roadblocks. Performance Management Plan - The Performance Management Plan Template is a deliverable style document that provides a framework for your performance management approach and performance tracking. The plan includes a performance management activities matrix which reflects by functional role the assigned responsibilities for key performance management activities. Also included are a performance objectives section and a section for documenting performance standards and management processes.



Logic Model Template – The Logic Model Template is a decision support tool used to visually describe the linkages between program goals, activities, and expected outcomes. It describes how a program should work, presents the planned activities for the program, describes how activities will be documented, and focuses on anticipated outcomes. The Logic Model Template includes five main components: inputs, outputs, outcomes, assumptions and external factors.

Performance Matrix Template – The Performance Matrix Template is designed to increase an organization’s effectiveness and productivity by helping leaders plan and manage performance. The performance matrix utilizes a Nine-Point Performance / Importance Scale to help you make clearer, more informed decisions and provides the criteria and processes for developing and populating your performance matrix. Planning Session Template – The Planning Session Template allows you to manage the planning sessions outlined in the defining and planning stages of the Lifecycle Performance Framework. This template includes meeting agendas, agenda item descriptions, discussion leaders and meeting objectives. Process Evaluation Scorecard – The process evaluation scorecard is a checklist that helps you determine the value of a process implemented for performance improvement in terms of positive impact, cost savings, knowledge management and training. The process evaluation scorecard can serve as a survey for employees to gain feedback on the perception and buy-in of the process initiative. Process Profile Template – The Process Profile Template is a useful tool designed to help organizations get a complete understanding of their processes. The template enables detailed documentation of processes including expected outcomes, impacts, requirements, ownership, security considerations and more. SMART Metrics Template – The SMART method is a valuable technique to use when identifying performance metrics. SMART metrics are those that are Specific, Measurable, Actionable, Relevant, and Timely). The SMART Metrics Template will help your organization ensure that the metrics they consider encompass these characteristics. Change Management Checklist – The Change Management Checklist is designed for Performance Managers and Performance Team Members to help determine the impact of potential change requests within the performance initiative. The checklist examines the changes that alter the scope of the initiative and require analysis in order to understand the impact on the Performance Management Plan and the stakeholders.



Organizational Change Management Template – Some performance management changes are huge and impact your people, processes and organizational culture. These changes can include anything from how the initiative will affect systems, employees and processes, individual and team roles and responsibilities to communication procedures, key performance indicators and the shift of employee expectations and workforce performance. The Organizational Change Management Template allows you to see how your change proposal will affect the performance initiative, staff and the organization as a whole.

Executing Phase Templates

Performance Methodology Implementation Template – The Performance Methodology Implementation Template is designed to help you plan and implement the processes identified in the Step by Step Guide to Implementing a World Class Performance Solution. The template simplifies the processes by letting you list the steps outlined in the guide, and document the actions, responsibilities, anticipated results, business objectives supported, and dependencies. Vendor Assessment Weighted Criteria Template – The Vendor Assessment Weighted Criteria Template will help you formulate criteria/ standards for vendor evaluation and evaluate vendors' qualifications and capabilities effectively. To simplify the process of identifying criteria for valuable analysis, this template includes sample rating criteria. All you have to do is identify the vendors and rank the criteria by order of importance and you’re ready to go. Data Management Tool Evaluation – The Data Management Tool Evaluation is a detailed analysis of several data management tools and provides ratings in areas such as technical support, data extraction, data cleansing, data exporting, company stability, metadata functionality, training, performance, and much more. An excellent analysis for when your organization is ready to purchase and implement a data management solution. Change Management Checklist – The Change Management Checklist is designed for Performance Managers and Performance Team Members to help determine the impact of potential change requests within the performance initiative. The checklist examines the changes that alter the



scope of the initiative and require analysis in order to understand the impact on the Performance Management Plan and the stakeholders. Organizational Change Management Template – Some performance management changes are huge and impact your people, processes and organizational culture. These changes can include anything from how the initiative will affect systems, employees and processes, individual and team roles and responsibilities to communication procedures, key performance indicators and the shift of employee expectations and workforce performance. The Organizational Change Management Template allows you to see how your change proposal will affect the performance initiative, staff and the organization as a whole.

Monitoring Phase Templates

Change Management Checklist – The Change Management Checklist is designed for Performance Managers and Performance Team Members to help determine the impact of potential change requests within the performance initiative. The checklist examines the changes that alter the scope of the initiative and require analysis in order to understand the impact on the Performance Management Plan and the stakeholders. Organizational Change Management Template – Some performance management changes are huge and impact your people, processes and organizational culture. These changes can include anything from how the initiative will affect systems, employees and processes, individual and team roles and responsibilities to communication procedures, key performance indicators and the shift of employee expectations and workforce performance. The Organizational Change Management Template allows you to see how your change proposal will affect the performance initiative, staff and the organization as a whole. Quality Assurance Surveillance Plan (QASP) Checklist – The Quality Assurance Surveillance Plan Checklist provides guidelines for planning your quality assurance surveillance plan. It identifies steps and questions that will help you manage the process and verify the quality of the performance initiative. The QASP Checklist is formatted and all you must do is fill in the questions in italics. Quality Control Checklist – The Quality Control Checklist provides guidelines for planning your vendor relationship. It identifies who is responsible for specific deliverables that you will manage in the performance



management plan and what is expected of the vendors responsible for delivering the service. Quality Management Plan – The Quality Management Plan Template is a deliverable that documents how an organization will plan, implement, and assess the effectiveness of its quality assurance and quality control operations. Specifically, it describes how an organization structures its quality system, the quality policies and procedures, areas of application, and roles, responsibilities, and authorities. To simplify the process for you, the template includes a list of common performance management roles and responsibilities and directions on how to populate each of the sections.

Performance Methodology Implementation Template – The Performance Methodology Implementation Template is designed to help you plan and implement the processes identified in the Step by Step Guide to Implementing a World Class Performance Solution. The template simplifies the processes by letting you list the steps outlined in the guide, and document the actions, responsibilities, anticipated results, business objectives supported, and dependencies.

Reporting Phase Templates

Dashboard Template – The dashboard template is an excellent tool for when your organization is ready to display your performance results in graphical form. This template includes data values and charts for customer satisfaction, expense to revenue ratio, net profit after tax, sales/production, operational efficiency, return on capital employed and many more. The template is ready for you to input the appropriate data into the data tables and copy the charts to your reports and deliverables. Data Warehouse Data Model – The Data Warehouse Data Model provides a clear, understandable, and consensus-driven logical data model for your data warehouse implementation. This data model is useful to both the business units as a tool to understand the design of the operational data store and to the technical implementation team as a tool to generate the physical database structures. This deliverable includes project objectives, scope, deliverables, approach, constraints and assumptions associated with data warehouse modeling. Employee Appraisal Form Template – This template allows a mixture of key skills comprising up to six elements. The Employee Appraisal Form Template is a questionnaire built from the role's key skill areas, and enables you to break down these roles into elements, and measure each via carefully



worded questions, which the respondents answer and thereby grade the performance, i.e., give feedback, in respect of the person in question. Employee Performance Indicators Template – The Employee Performance Indicators Template is designed to help plan performance discussions with employees. It can be used to ensure that the your employees understand where their strengths and weaknesses are in terms of the organizational and performance objectives and what they must do in order to exceed performance expectations. Lessons Learned Template – The Lessons Learned Template enables your organization to document what went well in the performance initiative and what could have been better. The template lists common subject areas throughout the project and is also customizable so that you may change any of the scheduled review items to best match the variables that are important to your project management efforts. Performance Management Report Log – As your performance initiative gains momentum and stakeholder’s begin to understand the value and necessity of analyzing performance, the demand for reports from all areas of your organization will increase. The Performance Management Report Log will help you document these reports. While the Report Repository contains the actual reports, the Report Log documents the details of the reports, such as the owner(s) of the report, type, frequency, etc. Training Needs Analysis Template – The Training Needs Analysis Template is designed to show collective and individual training needs and priorities. Complete with a set of predefined common element descriptions, the template only requires you to input scores. Or, you can customize the elements to meet your specific business objectives. Report Repository Template – Reporting is the most visible output in the performance management process. As your performance initiative gains momentum and stakeholder’s begin to understand the value and necessity of analyzing performance, the demand for reports from all areas of your organization will increase. The Report Repository Template provides a comprehensive list of all routine reports generated by your organizational departments. This list will be used as a basis for determining reporting requirements in your performance initiative. This report comes with instructions on how to populate the template. Performance Methodology Implementation Template – The Performance Methodology Implementation Template is designed to help you plan and implement the processes identified in the Step by Step Guide to Implementing a World Class Performance Solution. The template simplifies the processes by letting you list the steps outlined in the guide, and document the actions,



responsibilities, anticipated results, business objectives supported, and dependencies. Change Management Checklist – The Change Management Checklist is designed for Performance Managers and Performance Team Members to help determine the impact of potential change requests within the performance initiative. The checklist examines the changes that alter the scope of the initiative and require analysis in order to understand the impact on the Performance Management Plan and the stakeholders. Organizational Change Management Template – Some performance management changes are huge and impact your people, processes and organizational culture. These changes can include anything from how the initiative will affect systems, employees and processes, individual and team roles and responsibilities to communication procedures, key performance indicators and the shift of employee expectations and workforce performance. The Organizational Change Management Template allows you to see how your change proposal will affect the performance initiative, staff and the organization as a whole.



Performance Management Glossary

One of the first steps to facilitating performance management success is to ensure that your organization has a common language for talking about performance. Below is a guide to key performance management terminology and concepts to help get everyone on the same page.

Alerts: Notifications to email or to a home page, updating users to changes to items that they have subscribed. Examples might include notifications about performance changes or commentary.

Alignment: The act or state of being properly positioned, especially in relation to one another; see also operational alignment.

Balanced Scorecard: One of the more prevalent methodologies in use today, the Balanced Scorecard framework has three main tenets: 1) emphasis on outcomes and objectives to be achieved, rather than measures; 2) separation of objectives into disparate, supporting points of view such as Customer, Financial, Process, and Employee; and 3) consideration of non-financial assets such as processes and intellectual property so that leading and qualitative measures are also included.

Benchmarking: The comparison of similar processes across organizations and industries to measure progress, identify best practices, and set improvement targets. Results may serve as potential targets for key performance indicators.

BHAGs (Big Hairy Audacious Goals): Often used to describe an organization’s high-level, long-term aspirations, or vision.

Business performance management: A brand of performance management that includes finance — covering compliance issues, competition, risk and profitability — and human resources performance management — encompassing employee performance appraisals and incentive compensation. Other types of performance management include operational performance management and IT performance management.

Cascading: The process of developing aligned goals throughout an organization, connecting strategy to operations to tactics, allowing each employee to demonstrate a contribution to overall organizational objectives. Methods of cascading include identical (objectives and measures are identical), contributory (translated, but congruent, objectives and measures), unique (unique objectives and measures; do not link directly to parent) and shared (jointly-shared unique objective or measure).



Cause and effect: The way perspectives, objectives, and/or measures interact in a series of cause-and-effect relationships demonstrate the impact of achieving an outcome. For example, organizations may hypothesize that the right employee training (Employee, Learning and Growth Perspective) will lead to increased innovation (Internal Process Perspective), which will in turn lead to greater customer satisfaction (Customer Perspective) and drive increased revenue (Financial Perspective).

Comments: Used to provide further information about a performance management object including questions, issues or background.

Composite Measure: A measure based on a number of performance measures, weighted to reflect relative importance. Composite measures provide summary level information to higher management.

Customer-facing operations: Encompasses those facets of the organization that interface directly with customers; typically an organization’s sales, service and marketing functions. Customer-facing operations are also referred to as the demand chain.

Customer Perspective: One of the four standard perspectives used with the Balanced Scorecard. Measures are developed based on the answer to two fundamental questions - who are our target customers and what is our value proposition in serving them? The role of the Customer perspective is often elevated in public sector and not for profit applications of the Balanced Scorecard.

Customer Relationship Management (CRM) - CRM entails all aspects of interaction a company has with its customer. It includes methodologies, software, and usually Internet capabilities that help an organization manage customer relationships in an organized way. The Customer Perspective of the Balanced Scorecard may contain references to a CRM program.

Dashboard: A visualization of important information, often tailored to a specific role or point of view, consolidated and arranged on a single screen so the information can be monitored at a glance. For most deployments, this information contains actual results represented as metrics.

Economic Value Added (EVA): A financial performance measure aiming to determine whether a company or activity has truly created shareholder value; in other words, EVA aims to distinguish real profit from paper profit. EVA is determined by calculating a business’s after-tax cash flow minus the cost of the capital it deployed to generate that cash flow.

Effectiveness Enhancement System: An approach to performance management developed by Bacal & Associates. Its strength is that it



recognizes that BOTH manager and employee need to define how performance is to be planned and evaluated. The employee becomes the "customer" of the process. And this puts the employee and manager on the same side.

Employee Learning and Growth Perspective: One of the four standard perspectives used with the Balanced Scorecard. Measures in this perspective are often considered "enablers" of measures appearing in the other three perspectives. Employee skills, availability of information, and organizational climate are often measured in this perspective.

Financial Perspective: One of the four standard perspectives used with the Balanced Scorecard. Financial measures inform an organization whether strategy execution, which is detailed through measures in the other three perspectives, is leading to improved bottom line results. In public sector and not for profit applications of the Balanced Scorecard measures in the Financial perspective are often viewed as constraints within which the organization must operate.

Forecast: Forecast usually refers to a projected value for a metric. Organizations will often create a forecast that is different than their target for a given metric. There are multiple types of forecasting methods for creating forecasts based on past data and usage of them varies widely across organizations.

Goal: See objective below.

Goal plan: Used primarily in the public and not-for-profit sector, a goal plan is a performance plan outlining an organization’s goals and/or objectives. Also see Strategy plan below.

Goal diagram: Generically used to describe the one-page visualization that shows the different goals of the organization and how they are related. Examples of goal diagrams include strategy plans, strategy maps and process diagrams.

Government Performance and Results Act (GPRA): Enacted in 1993, the Government Performance and Results Act (GPRA) requires federally-funded agencies to develop and implement an accountability system based on performance measurement, including setting goals and objectives and measuring progress toward achieving them. Emphasizes accomplishments/outcomes and performance-based budgeting versus expenditures and zero-based budgeting.

Human capital: A metaphor for the transition in organizational value creation from physical assets to the capabilities of employees ― knowledge, skills,



and relationships, for example. Closely related to terms such as intellectual capital and intangible assets. Some experts suggest that as much as 75 percent of an organization’s value is attributable to human capital.

Index KPIs: Index KPIs are an index of multiple KPIs. Often times these KPIs might actually be measured in completely different units and an index KPI normalizes the underlying KPIs to provide a single score. Sometimes used in the public sector, an example might be a Health Index, which is composed of multiple health related KPIs.

The information supply chain (ISC): The full set of elements, technology-based, process-specific and organizational in nature, which is necessary to collect information from discrete processes, transform this information from data into knowledge, and deliver the right data to the right stakeholders in the right way and at the right time.

Initiatives: The lifeblood of an organization’s operations, initiatives organize people and resources and dictate which activities are required to accomplish a specific goal by a particular date; initiatives provide the how while goals provide the what. As differentiated from projects, initiatives directly support an organization’s strategic goals; projects may or may not have strategic impact. Examples: Supporting the objective “Ensure 100% in-stock merchandise” might be initiatives such as “Upgrade of inventory management software to include demand chain and “Migration to store-specific assortment plans from uniform assortments.” Initiative management solutions help ensure that activities are aligned with goals, increase coordination of resources, and allow prioritization based on importance, not just urgency.

Inputs: Commonly used within the Logic Model to describe the resources an organization invests in a program, such as time, people (staff, volunteers), money, materials, equipment, partnerships, research base, and technology, among other things.

Initiatives - The specific programs, activities, projects or actions an organization will undertake in an effort to meet performance targets.

Internal Process Perspective - One of the four standard perspectives used with the Balanced Scorecard. Measures in this perspective are used to monitor the effectiveness of key processes the organization must excel at in order to continue adding value for customers, and ultimately, shareholders.

IT performance management: A brand of performance management that assists organizations with the increasing demands of maximizing value creation from technology investments; reducing risk from IT; decreasing architectural complexity; and optimizing overall technology expenditures.



Other types of performance management include operational performance management and business performance management.

Key outcome indicator (KOI): Often used in the public sector to describe key performance indicators, those metrics most critical to gauging progress toward objectives. KOIs are metrics that are: tied to an objective; have at least one defined time-sensitive target value; and have explicit thresholds which grade the gap between the actual value and the target.

Key performance indicator (KPI): Distinguished from other metrics, key performance indicators (KPIs) are those metrics most critical to gauging progress toward objectives. KPIs are metrics that are: tied to an objective; have at least one defined time-sensitive target value; and have explicit thresholds which grade the gap between the actual value and the target.

KPI/KOI Scorecard: A specific application of a scorecard, a KPI/KOI scorecard is used to measure progress toward a given set of KPIs or KOIs.

Lagging indicator: Backward-looking performance indicators that represent the results of previous actions. Characterizing historical performance, lagging indicators frequently focus on results at the end of a time period; e.g., third-quarter sales. A balanced scorecard should contain a mix of lagging and leading indicators.

Leading indicator: Forward-looking in nature, leading indicators are the drivers of future performance. Improved performance in a leading indicator is assumed to drive better performance in a lagging indicator. For example, spending more time with valued customers (a leading indicator) is hypothesized to drive improvements in customer satisfaction (a lagging indicator).

“Letter grade” rating system: A threshold rating system in which letter grades of A/B/C/D/F are used to describe and/or depict performance (usually based on the gap between the target and actual) in easily understandable terms.

Lifecycle Performance Management: Lifecycle Performance Management is the systematic implementation of an enterprise-wide performance strategy involving all business units, systems and personnel. It is a sequence of management processes, when combined, achieves a complete approach to managing performance from start to finish. Lifecycle Performance Management focuses on all areas that determine the success of an enterprise, including: Employees, Departments / Divisions, Processes, Programs (e.g. implementing organizational policies), Products / Services, Projects, Business Units / Teams.



Logic Model: Having gained prominence in the ’90s largely in response to the Government Performance and Results Act (GPRA), the Logic Model is now a widely accepted management tool in the public and nonprofit sectors as well as the international arena. The model is a roadmap or picture of a program that shows the logical relationships among resources or inputs (what an organization invests); activities or outputs (what an organization gets done); and outcome-impacts (what results or benefits happen as a consequence).

Malcolm Baldridge: Established by the U.S. Congress in 1987, the Malcolm Baldridge performance framework is a rating tool that assesses management systems and helps identify major areas for improvement in seven categories of performance criteria: Leadership; Strategic Planning; Customer and Market Focus; Measurement, Analysis, Knowledge Management; Human Resource Focus; Process Management; and Business Results.

Measure (also called metric): Public sector term to describe a standard used to communicate progress on a particular aspect of a program. Measures typically are quantitative in nature, conveyed in numbers, dollars, percentages, etc. (e.g., $ of revenue, headcount number, % increase, survey rating average, etc.) though they may be describing either quantitative (e.g., sales made) or qualitative (e.g., employee motivation) information.

Metric (also called measure): Term used in commercial organizations to describe a standard used to communicate progress on a particular aspect of the business. Measures typically are quantitative in nature, conveyed in numbers, dollars, percentages, etc. (e.g., $ of revenue, headcount number, % increase, survey rating average, etc.) though they may be describing either quantitative (e.g., sales made) or qualitative (e.g., employee motivation) information.

Mission: Concise statement that describes, in motivating and memorable terms, the current top-level strategic goal of the organization. A mission provides both an internal rallying cry and external validity. Usually financial-, process-, or customer service-oriented, with a mid-term (three to five years) horizon, an effective mission is inspiring as well as easily understood and communicated.

Objective or outcome scorecard: A specific application of a scorecard, objective scorecards monitor progress toward a given set of objectives or outcomes using a threshold-based rating scale. Typically, objective status is determined by normalizing one or many key performance indicators and comparing it to a given rating scale.

Objective (also called goal): A concise statement describing specific, critical, actionable and measurable things an organization must do in order to



effectively execute its strategy and achieve its mission and vision. Objectives often begin with action verbs such as increase, reduce, improve, achieve, etc. Whereas the vision and mission statements provide an organizing and mobilizing “rallying cry,” objectives translate the vision and mission into measurable and actionable operational terms. Examples: “Be a one-stop shop for all my interactions with the company” (Customer); “Maximize customer lifetime value” (Financial); “Integrate disparate customer processes” (Process); and “Foster a culture that rewards customer intimacy” (Capabilities).

Ongoing Performance Communication: Communication between manager and employee all throughout the year to ensure that problems are identified early, and so there are NO SUPRPRISES during the performance appraisal.

Operational alignment: The means to and/or state of alignment of an organization’s day-to-day activities with its strategic goals or objectives, operational alignment helps ensure that an organization’s daily activities are advancing its longer-term goals and mission.

Operational performance management: A brand of performance management that addresses the growing pressure to increase revenue while managing costs, while meeting ever-evolving and expanding customer demands. Other types of performance management include business performance management and IT performance management.

Operational Reviews: Usually used to describe the regularly scheduled internal status meetings of an organization. Going by different names based on the organization, manufacturing companies typically call them Operational Excellence (OPX) meetings, other organizations sometimes just refer to them as Performance reviews.

Outcome: Commonly used within the Logic Model, outcomes (also called outcome-impacts) describe the benefits that result as a consequence of an organization’s investments and activities. A central concept within logic models, outcomes occur along a path from shorter-term achievements to medium-term and longer-term achievements.

They may be positive, negative, neutral, intended, or unintended. Examples of outcomes include changes in knowledge, skill development, behavior, capacities, decision-making, and policy development.

Output: Commonly applied within the Logic Model, outputs describe what an organization gets done; e.g., “what we do” or “what we offer” and may include workshops, delivery of services, conferences, community surveys, facilitation, in-home counseling, etc. Outputs lead to outcomes.



PART: See Program Assessment Rating Tool below.

Pathway: Descriptive statement and visualization that describes/depicts the progressive stages in realizing an organization’s long-term vision, and provides an understanding of the phases in which particular objectives play primary contributory roles. Examples: “Launch in NYC”; “Scale in Northeast”; “Expand across U.S.”

Performance-based budgeting: A performance budget is an integrated annual performance plan and budget that shows the relationship between program funding levels and expected results. It indicates that a goal or a set of goals should be achieved at a given level of spending.

Performance Appraisal: The regular (usual annual) process where an employees performance for the year is assessed by manager and/or employee. It is only one part of the performance management approach. Usually means the same as "performance review".

Performance Gap: The “difference” between actual and target, the trend of the performance or target gap shows an organization’s momentum.

Performance Management: The larger process of defining how people, processes and systems should be performing, ongoing communication during the year, linking of performance to organization needs, and the evaluating of appraising of performance.

Performance Review: Usually refers to a meeting to review and evaluate performance, involving supervisor and employee. Often done once a year, but to be effective performance reviews, or at least informal meetings to discuss performance should be undertaken at least every few months.

Perspective (also called point of view): Representing the various stakeholders, both internal and external, critical to achieving an organization’s mission. Together, the perspectives provide a holistic, or balanced, framework for telling the “story of the strategy” in cause-and-effect terms. While the traditional Balanced Scorecard includes the four perspectives of Financial, Customer, Internal Process, and Employee Learning and Growth, an organization may choose to modify and/or add to these to adequately translate and describe their unique strategy.

PMA: See President’s Management Agenda below.

Point of view: See perspective above.



President’s Management Agenda (PMA): The President’s Management Agenda, announced in the summer of 2001, is an aggressive strategy for improving the management of the federal government. It focuses on five areas of management weakness across the government where the greatest improvements and progress can be made.

Process Diagram: Process diagrams typically are used to represent specific processes that are undertaken in an organization and the key steps involved in the process. An example might be a high-level diagram that highlights the customer experience.

Program Assessment Rating Tool: Developed by the Office of Management and Budget within the Office of the President of the United States, the Program Assessment Rating Tool (PART) was developed to assess and improve program performance so that the federal government can achieve better results. A PART review helps identify a program’s strengths and weaknesses to inform funding and management decisions aimed at making the program more effective. The PART therefore looks at all factors that affect and reflect program performance including program purpose and design; performance measurement, evaluations, and strategic planning; program management; and program results.

Qualitative: Subjective, as opposed to quantitative (measured). A common source of qualitative metrics are surveys of customers, stakeholders or employees.

Quantitative: Measured, as opposed to qualitative (subjective). Quantitative measures often come from transactional systems.

Readiness scorecard: A specific application of a scorecard, a readiness scorecard can be used to evaluate an organization’s state of readiness/acceptance of a given strategy.

Reports: Typically show the details of performance for a metric or multiple metrics. Reports are often used to drill down to the root cause of performance issues.

Scorecard: A scorecard is a visual display of the most important information needed to achieve one or more objectives, consolidated and arranged on a single screen so the information can be monitored at a glance. Unlike dashboards that display actual values of metrics, scorecards typically display the gap between actual and target values for a smaller number of key performance indicators.

Six Sigma: A quality management and process improvement methodology particularly well suited to process intensive industries like manufacturing. Six



Sigma measures a given process by its average performance and the standard deviation (or variation) of this performance, aiming to reduce the occurrence of defects in a given process to a level of “Six Sigma” outside the norm; no more than 3.4 times per million.

Standards of Performance: Mutually agreed upon criteria used to describe how WELL an employee must perform, written to reduce subjective judgment.

Strategy: Strategy is the way an organization seeks to achieve its vision and mission. It is a forward-looking statement about an organization’s planned use of resources and deployment capabilities. Strategy becomes real when it is associated with: 1) a concrete set of goals and objectives; and 2) a method involving people, resources and processes.

Strategic Management System - Describes the use of the Balanced Scorecard in aligning an organization's short-term actions with strategy. The Strategic Management System is often accomplished by cascading the Balanced Scorecard to all levels of the organization, aligning budgets and business plans to strategy, and using the Scorecard as a feedback and learning mechanism.

Strategic Resource Allocation - The process of aligning budgets with strategy by using the Balanced Scorecard to make resource allocation decisions. Using this method, budgets are based on the initiatives necessary to achieve Balanced Scorecard targets.

Strategy map: A specific version of a strategy plan that adheres to the Balanced Scorecard methodology. Strategy maps depict objectives in multiple perspectives with corresponding cause and effect linkages.

Strategy plan: A visual representation of an organization’s strategy and the objectives that must be met to effectively reach its mission. A strategy plan can be used to communicate, motivate and align the organization to ensure successful execution.

Supply Chain - The supply chain represents the flow of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Many organizations are looking to supply chain optimization as a means of gaining significant competitive advantages. The Internal Process Perspective of the Balanced Scorecard often contains performance measures pertaining to supply chain performance.

Target: A target is the defining standard of success, to be achieved over a specified time period, for the key performance indicators associated with a



particular strategic objective. Providing context to make results meaningful, targets represent the organization’s “stretch goals.”

Theme: Descriptive statement representing a major component of a strategy, as articulated at the highest level in the Vision. Most strategies can be represented in three to five themes. Themes are most often drawn from an organization’s internal processes or the customer value proposition, but may also be drawn from key financial goals. The key is that themes represent vertically linked groupings of objectives across several scorecard perspectives (at a minimum, Customer and Internal). Themes are often stated as catchy phrases or “buzz” words that are easy for the organization to remember and internalize. Example: “Top Innovator,” “Customer Intimate,” “Operationally Excellent” “Processes/Tools,” “Thinking,” “Content,” “Pipeline” (I/T Organization).

Threshold: A means of describing and/or depicting the performance gap in easily understandable terms. Examples of threshold methods include “letter-grade” (A/B/C/D/F) and “traffic-light” (green/yellow/red).

Values: Representing an organization’s deeply-held and enduring beliefs, an organization’s values openly declare how it expects everyone to behave and are often embedded in its vision.

Value proposition or discipline: Describes how an organization intends to differentiate itself in the marketplace and what particular value it will deliver to customers. Many organizations choose one of three “value disciplines” ― operational excellence, product leadership, or customer intimacy ― articulated by Treacy and Wiersema in “The Discipline of Market Leaders.”

Vision: A concise statement defining an organization’s long-term direction, the vision is a summary statement of what the organization ultimately intends to become five, 10 or even 15 years into the future. It is the organization’s long-term “dream,” what it constantly strives to achieve. A powerful vision provides everyone in the organization with a shared mental framework that helps give form to the often abstract future that lies ahead. Effective visions provide a word picture of what the organization intends ultimately to become - which may be five, ten, or fifteen years in the future. This statement should not be abstract - it should contain as concrete a picture of the desired state as possible, and also provide the basis for formulating strategies and objectives.

“Wobble” test: A litmus test used to determine whether a given objective is truly necessary to achieving organizational mission; if an objective can be dropped from the strategy plan and the organization can still reach your mission, then the objective is not necessary and should be excluded.

Documents

Performance Management Fundamentals