smartKPIs.com Performance Architect update 8/2010

Applying Goal Setting Theory in practice: An action research exercise

In my previous updates I highlighted the importance of theory in performance management and introduced the goal setting theory as one of the most important informing the discipline. I also outlined the importance of understanding the complexities of setting targets.

At smartKPIs.com, we not only enjoy thinking and talking about performance management, but we also apply performance management concepts in our own work. Today’s update illustrates how goal setting theory was used in practice by the smartKPIs.com team through an action research exercise.

Situation: At the beginning of November 2009, the database of performance measures on www.smartKPIs.com had 600 published KPI examples. The growth rate of the database was constant in November and December, however limited and not optimized..

Challenge: To make the website content more relevant to the diverse profile of visitors, we needed to accelerate the rate at which new KPI examples were published.

Methodology: apply the Look, Think and Act routine of Action Research (Stringer, 2007)

* Look – we gathered relevant information and developed a rich picture of the various functional areas and industries part of the smartKPIs.com taxonomy.
* Think – we analyzed the documentation process and clarified the issues to be addressed
* Act – we established a plan, implemented it and evaluated results

Theory: use Goals Setting Theory principles (Locke & Latham, 1990)

Application of Goal Setting Theory principles:

  • Challenging but attainable. We established an overall target for the entire documentation team: Double the number of published KPIs in one month. From 1000 at the end of December 2009 to 2000 published KPI examples by the end of January 2010.
  • Specific rather than vague. We were aware that such a challenging target might lead to a decrease in the quality of the content. This risk was addressed by clarifying that the target had to be achieved while respecting the high quality standards characterizing the KPI examples documented on http://www.smartKPIs.com. This was reinforced by the establishment of work package with clear quality and quantity specifications.
  • Involvement of team members in the process of setting their own targets. We decided to split this target by working days and established the daily target number of KPIs for the team. This was divided by team member, taking into account the proportion of working hours allocated to this task each day. These targets were discussed and some of the team members adjusted them upwards, based on the level of difficulty of their allocated work package.
  • Ensure targets are measurable in terms of being clearly understood by employees: quantity, quality, time and cost. A spreadsheet was established to clarify daily targets and keep track of the progress. Weekly meetings were used to discuss progress, share learnings and adjust work packages.

Results:

* January 2010 – The target was met on the last day of the month: 1000 KPI examples were published in a 4 weeks period, as planned.
* February 2010 – The target was met one week before the deadline, confirming that the previous month result was due to an improved process, easily replicated from one period to another.

Outcomes: Performance management is more than just ensuring outputs are delivered as planned. It is also about using such outputs to deliver outcomes that generate added value. Here is how the output of 2000 KPIs published as planned during the last two months is generating value for smartKPIs.com:

1. The traffic to http://www.smartKPIs.com increased considerably. In February 2010, smartKPIs.com established a new site record in terms of daily visitors.
2. The traffic to the website remained constant even after stopping the advertising campaign we rolled out last year. After a brief decrease, the volume of visitors started to gain momentum. While other factors contributed to this, certainly the quality content published over the last two months, had its share in attracting new visitors. Thus the financial value generated by the added content can be estimated as the equivalent of a large share of our advertising budget for two months.
3. The continuous improvement of the quality and quantity of the content consolidated the recognition smartKPIs.com has started to have the international performance management community as a global platform for performance management knowledge integration.
4. Internally, the learning experience team members shared during this exercise contributed to the generation of new ideas and innovation, such as the launch of the Performance Management IQ test.
5. The experience itself and the achievement of targets confirmed the talent, dedication and work ethic of the smartKPIs.com team. It gave a sense of pride and satisfaction of getting the job done. Having the opportunity to plan, deliver and excel is in itself a powerful motivator and enabler of self efficacy. It is a story worth telling others: “…In December 2009, while working with the smartKPIs.com team on growing the website, we were faced with this challenge…We were a great team…And we did exceptional things…”

After all, as Albert Einstein said: “The value of achievement lies in the achieving.”

Notes:

No bonuses were paid for achieving the targets set as part of this exercise.
No paper was printed as part of the measure documentation process.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan
Performance Architect,
www.smartKPIs.com

References

Locke, E. A., & Latham, G. P. (1990). A theory of goal setting and task performance. Englewood Cliffs, NJ: Prentice Hall.

Stringer, E. T. (2007) “Action Research, 3rd Edition“, Thousand Oaks, CA, Sage Publications.

smartKPIs.com Performance Architect update 1/2010

Performance Management and www.smartKPIs.com

aurel-brudan-wwwsmartkpiscomLaunched in November 2009, www.smartKPIs.com was met with overwhelming interest by tens of thousands of visitors from over 160 countries. A base of regular visitors quickly formed in a relative short period of time and it continues to grow with many registering as site users daily.

Why such interest in the subject of Performance Management and more specifically Key Performance Indicators (KPIs)?

What sets smartKPIs.com apart in addressing this interest in the subject?

On Performance Management

Business Performance Management is a dry subject for many. At individual level, annual performance reviews have been compared to preparing tax returns – it is hard to find someone who takes pleasure in completing them, but they are necessary and regular.

For others the topic is complex and rewarding. At company level, Performance Management Systems have been compared to washing machines that have to be properly installed and configured in order to operate as desired (Meekings et al, 2009).

Performance Management is still in the early stages of being established as discipline and the lack of standards makes using tools and concepts from this field a challenging task. There is a certain degree of confusion in the way terminology is used in the discipline both within academic literature, in practice and between them.

Faced with the challenging task of finding coherence in this universe of mostly unstandardised concepts, practitioners welcome tools and methodologies that bring clarity, structure and simplicity to Performance Management. The success of the Balanced Scorecard over the last 20 years is proof of that.

smartKPIs.com fits in this picture as a platform based community that can be used to:

1. Learn more and improve the understanding of Performance Management concepts

2. Review examples of Key Performance Indicators that went through a thorough documentation process

3. Manage personal libraries of KPI examples, selected by users as most suitable for the performance management initiatives they are involved in.

4. Source templates that can be used in better structuring the documentation used as part of organisational performance management frameworks or systems.

smartKPIs differentiation

The world abounds with Performance Management consultants and there are many resources available on the Internet. smartKPIs.com is not the first, nor the latest online platform available to the wider public.

What sets smartKPIs.com apart is:

  1. The combination of insight from practice with academic rigor. We value academic research and use its findings and principles. At the same time, abstract concepts are much better understood when analysed in context, in practice. In addition, practice refines such concepts and contributes to their evolution and usability.
  2. The ability to structure information in clear taxonomies, simplifying the analysis process. This enables visitors to better understand the discipline of Performance Management and the use of KPIs as a core organisational capability. The benefits, although indirect are to be seen at both personal and organisational level: “ I am convinced that the first essential of business success is the capacity for organized thinking” (Follett, 1940)
  3. Expertise in the field of Performance Management, through a “community of inquiry”. The definition of an expert is relative. Today, same as in old times, anyone can claim to be an expert in anything. Mark Twain is credited with using the phrase “an ordinary fellow from another town” as an explanation to the term. Will Rogers is credited with using the phrase “a man fifty miles from home with a briefcase” to express the same. In our times, the number of miles increased considerably and the briefcases were replaced by blogs, websites and accounts on social networking sites. In developing expertise we took the long but steady road of academic study, combined with learning from practical experience and generating new insights. Our approach to learning from practice is action research and it follows Peirce’s inquiry process of abduction, deduction and induction (Barton et al, 2007). More importantly, we have done over 10,000 hours of deliberate practice in the field of Performance Management both at team level and individual level by some of the team members. Academic research supports a causal relationship between the accumulated deliberate practice (guided, highly structured learning activity) and the level of expertise in an area. Deliberate practice being a “highly structured activity, the explicit goal of which is to improve performance” (Ericsson et al, 1993). Having said that, we are great believers in the power of collective intelligence. We see ourselves as informed facilitators of the interaction, collaboration and learning process that smartKPIs.com users will participate in.

smartKPIs.com metaphor

One metaphor that I think describes smartKPIs.com is comparing it to a tree.

  • It first needed a fertile land – Performance Management
  • A seed – myself as Performance Architect
  • A period of growth – the many years of deliberate practice
  • Branches – the team behind smartKPIs.com
  • Flowers – its website content
  • Nectar – the quality of the content
  • Bees – visitors of the website
  • Cross-pollination – the exchange of ideas in the online community
  • Fruits – Financial self sustainability of the website
  • Honey – Value generation for visitors, fed back into their organisations.

Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,

www.smartKPIs.com

References

Ericsson, K. A., Krampe, R. Th. and Tesch-Römer C.(1993), The role of deliberate practice in the acquisition of expert performance, Psychological Review, Vol. 100, Nr. 3, pp. 363-406.

Follett, M. P. (1940), Dynamic Administration. The Collected Papers of Many Parker Follett, edited by Henry C. Metcalf and L. Urwick, Harper & Brothers, New York, London

Meekings A., Povey, S. and Neely, A. (2009), Performance plumbing: installing performance management systems to deliver lasting value, Measuring Business Excellence, Vol. 13, No. 3, pp. 13-19

Barton, J, Stephens, J. and Haslett, T (2007), Action Research: An Exploration of its Logic and Relationship to the Scientific Method. Proceedings of the 13th ANZSYS Conference – Auckland, New Zealand, 2nd-5th December, 2007 Systemic Development: Local Solutions in a Global Environment