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Home arrow Management arrow Performance Management for Agile Organizations: Overthrowing The Eight Management Myths That Hold Businesses Back

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Paint by Numbers

A third school of thought about evaluating organizational performance is based on the process model. The process model builds on the foundations of both the goal and systems models. A strong emphasis is the internal processes an enterprise uses to achieve its goals. Goals are still used in process thinking to measure organizational performance. However, this perspective is more interested in goal optimization than goal achievement.

Goal optimization takes into account the various constraints and potential roadblocks facing the organization now and in the future; it recognizes market realities that limit or prevent goals from being accomplished. Once these factors have been identified, process thinking considers ways to adapt employee behavior to meet these circumstances. Briefly, the process model shifts the weight from the organization as a whole to the behavior of individuals.

The belief supporting this model is that if employees have buy-in to the goals of the business, they’ll probably support and contribute to the goals enthusiastically. Aligning the needs of the individual with the interests of the organization is the ultimate aim of the process model. The use of the “balanced score card” is a popular performance management practice of the process model in action. The balanced score card is a performance measurement system that provides a comprehensive view of progress toward achieving strategic goals. Improvement is measured in both financial and nonfinancial terms. The process method focuses attention on key performance indicators (KPIs) within the organization to measure performance.

Goals or outcomes are still relevant, as I mentioned. And in terms of systems thinking, subsystems such as customers, employees, and internal operations are taken into consideration in process development. With improvement in mind, balancing processing speed and quality is paramount. Quality assurance is a spin-off of process modelling.

The well-documented example of the process model of business performance in action is the McDonald’s franchising system. In this system, processes are thought through, documented, and regimented. The process model shares similar beliefs of proponents of the systems model; that is, internal processes and organizational outcomes are causal to end results. If you follow the system, you’ll get a predictable result or outcome. It can be described as a “paint by numbers” approach.

Boundaries can be identified within the system and resources can be adjusted to improve performance. Setting goals, identifying and removing—or at least minimizing— roadblocks, and developing superior processes is the essence of process thinking. There is an underlying belief that internal processes are crucial for success and inextricably linked to performance.

On the downside, this approach doesn’t routinely take into account external factors like economic downturns, legislative changes, or socioeconomic trends. The agility of the organization to capitalize on or minimize these instabilities, can be hamstrung with the process model. Peripheral awareness—more prevalent in other performance models—is imperative; there is little doubt the outlying setting is a major factor in the success or otherwise of any enterprise.

Being too fixated on internal processes will inevitably distract the business from subtle outside influences and pressures. At best, process thinking can result in sluggishness when a response is necessary. And at worst, process fixation can wipe out a business. Despite its limitations, superior processes unquestionably build performance capacity and improve the quality of outcomes.

 
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