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StrategyDriven Business Performance Assessment Program Article

Business Performance Assessment Program – The Vertical Slice Assessment Approach

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All company functions are constrained by limited resources. As such, it is impossible for an organization to self assess every activity it performs. Therefore, business performance assessments need to be executed in a way that identifies the significant improvement opportunities at the lowest possible cost. One such approach is to do a thorough end-to-end review of a few occurrences of high value process.[wcm_restrict plans=”47715, 25542, 25653″]

The vertical slice represents such an end-to-end process evaluation; covering all transactions and organizational transitions as a process is executed from initiation to planning, scheduling, execution, and final closure. Performing a detailed review of appropriately selected processes yields insights to the process bottlenecks, organization misalignments, supporting system inadequacies, and personnel skill gaps that once improved offer the organization a significant return on investment.

Selecting Processes for Vertical Slice Assessment

When using the vertical slice assessment method, it is important to select high value processes to be evaluated. These processes are not limited to those that yield high revenue generation for the company but can also include those representing a significant cost to execute. Criteria to consider when selecting processes for vertical slice assessment include but are not limited to:

  • cost of executing the end-to-end process
  • impact to bottom line revenues of the end-to-end process
  • risk associated with the end-to-end process and the cost incurred should an error be made
  • frequency of process execution and the aggregate cost of execution (e.g. process that is inexpensive to perform executed frequently may have a higher aggregated cost of execution than a process that is expensive to perform and is infrequently executed)
  • number of employees involved with execution of the process (the greater the number the more complex the process and the greater the likelihood improvement opportunities exist)
  • number of employees performing the process within a specified period of time
  • number and severity of issues arising during routine performance of the process

Performing an End-To-End Process Evaluation

End-to-end process evaluations are intended to be thorough; identifying process, technology, and execution shortfalls and their causes. While not all inclusive, the following is a sample list of items that should be looked at during an end-to-end process evaluation:

  • total time to execute the process
  • time to perform each activity
  • time to transition between one activity and another, particularly when the transition represents a hand-off between individuals or organizations
  • points in the process where backlogs exist
  • points in the process where individuals experience downtime because they are waiting for the preceding activity’s completion
  • redundant data entry within a single system
  • instances where data is not transferred between software applications when multiple systems are used during process performance
  • manual data manipulation when such calculations can be performed by the supporting application
  • instances requiring authorization when such permission is provided by default
  • activities performed multiple times or by multiple individuals when such activities do not significantly reduce the risk of error
  • data checks performed by individuals that could be performed by a properly configured software application
  • transition points hindrances resulting from the manual transfer of data between systems, geographic and/or time separation of task performers, and inadequate communications mechanisms
  • process execution that is slower than allowed by regulation or policy
  • individuals who are over-qualified for assigned tasks / opportunities to assign tasks to less qualified, less expensive personnel
  • individuals who are performing tasks that could be delegated to personnel at lower level positions within the organization
  • activities performed by people that could be performed by software applications
  • process points where errors frequently occur
  • times in the day when process errors frequently occur
  • times relative to the organization’s daily schedule that errors commonly occur

As with all self assessments, the answers to these questions should be derived from direct process execution observations, record reviews (completed process forms, error reports, corrective action requests, root/apparent/direct cause analysis reports, etcetera), application data reviews, personnel interviews, and procedure reviews. The combination of facts derived from these studies is then used to formulate and validate improvement opportunity hypothesis.[/wcm_restrict][wcm_nonmember plans=”47715, 25542, 25653″]

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Additional Information

An illustration of how data is effective merged from various sources to identify performance issues is presented within the StrategyDriven Information Development Model.

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StrategyDriven Business Performance Assessment Program Warning Flag Article

Business Performance Assessment Program Warning Flag 3 – Conclusion Bias

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Business performance assessments can be a powerful tool for determining the unknown drivers of performance; their effectiveness derived from the diverse knowledge and experience of the multidiscipline team and the vast amounts of information from causal evaluations, work performance observations, executive, manager, employee, and customer interviews, financial reports, independent analyst reports, performance measures, and condition reports leveraged to perform these assessments. So rich and robust are these assessments that their credibility often goes unchallenged, yet a single flaw in the business performance assessment’s initial execution can make this power tool for continuous improvement an instrument of disaster.[wcm_restrict plans=”47810, 25542, 25653″]

All too often, business performance assessments are used to prove the existence of a conclusion already reached by an organization’s leaders. Subsequently, they transform from a truly independent assessment into a fact gathering exercise. Assessment teams directed to evaluate the existence of a given condition often preferentially seek out those facts supporting such a conclusion; intentionally omitting or becoming unintentionally oblivious to those facts supporting a counter argument. Thus, the assessment’s outcome is known before it begins and the promise of a deep understanding of actual performance and drivers is forfeit. In these cases, if those commissioning the assessment are not fully correct in their understanding of the associated performance conditions then the assessment’s credibility may drive the organization in the wrong direction.

Intended or not, organization leaders specifically directing the performance of business performance assessments to validate a predefined position place at risk the realization of benefits derived from the knowledge of the organization’s actual performance and performance drivers. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help organization leaders to recognize whether their self assessments focus on proving preconceived conclusions. Only after a problem is recognized and its causes identified can the needed actions be taken to move the organization toward improved performance.

Process-Based Warning Flags

  • Business performance assessment teams report directly to those organization leaders whose area of responsibility is being evaluated (lack of procedure directed independent oversight)
  • Business performance assessment process and/or forms call for the identification of conclusions to be focused on early in the process (Note: Identifying categorical areas of focus is acceptable.)

Process Execution Warning Flags – Behaviors

  • Executives and senior managers assign business performance assessments to provide the existence of a given condition
  • Business performance assessment leaders and teams actively seek to provide a palatable or desired answer to the organization’s leadership team
  • Business performance assessment interviews and fact finding activities tend to be narrowly focused on a those individuals and facts supporting a desired conclusion
  • Business performance assessment team members omit reviewing even significant occurrences that would counter a desired point of view deeming them irrelevant or an anomaly

Potential, Observable Results

  • Sustained poor performance when the true root causes of such performance goes unidentified
  • A failure to identify and transfer good performance practices from one part of the organization to another resulting in pockets of superior performance and the inability of other workgroups to achieve the same results
  • Overall forfeiture of performance potential; maintaining of the status quo and a lack of continuous improvement

Potential Causes

  • The organization has a ‘shoot the messenger’ culture when undesired performance outcomes are identified
  • The organization is highly leader driven such that the workforce to often seeks to please leaders; providing them with the information and conclusions they believe the leaders want to receive
  • A lack of training and understanding of the business performance assessment process and the principles behind performance of high quality, insightful assessments
  • Desire on the part of the leader commissioning the business performance assessment to use this tool as a method of mitigation or, in extreme cases, cover up personal performance shortfalls
  • An inappropriate expression of a leader’s desire to move the organization in a particular direction

Final Thought…

Business performance assessments seeking to prove a predetermined conclusion, particularly on that is negative, will appear to those whose performance evaluated as being grossly unfair. Subsequently, these individuals tend to resist the assessment’s conclusions even if they are based on solid facts and sound reasoning. This lack of buy-in results in a lack of support for the identified improvement initiatives. Worse still, the feelings of unfairness create disenfranchisement that drives lower productivity and possible attrition.[/wcm_restrict][wcm_nonmember plans=”47810, 25542, 25653″]

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StrategyDriven Business Performance Assessment Program Warning Flag Article

Business Performance Assessment Program Warning Flag 2 – Crediting Good Intentions

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“The road to ruin is paved with good intentions.”

German Proverb

Communicating assessment conclusions can be a difficult task, particularly in the case of improvement opportunities being presented to those directly managing or performing the function. Delivering the message is all the more difficult if those receiving it are organizationally senior to the self assessment lead or are influential favorites of the organization’s leaders. In these cases, business performance assessment leaders seeking a tactful way of communicating the ‘bad news’ often fall into the trap of crediting the good intentions and/or self identification of the issue by those responsible in order to put a positive spin on an otherwise negative message. Doing so, however, avoids the real issues at hand and can rob the organization of the opportunity to realize substantive performance improvements.[wcm_restrict plans=”47805, 25542, 25653″]

Crediting good intentions or self realization of an issue (often occurring just prior to the assessment) as the business performance assessment conclusion should be avoided. While such positives can and should be recognized within the self assessment report, they must not be allowed to interfere or detract from the real message that performance improvement opportunities do exist and that they should be pursued.

Whether recognized or not, organization leaders accepting assessment report conclusions founded on intention and/or issue self identification diminish their organization’s ability to improve; subsequently slowing its response to internal needs and market demands. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help organization leaders to recognize whether their self assessments gloss over the real issues in favor of more positive messages. Only after a problem is recognized and its causes identified can the needed actions be taken to move the organization toward improved performance.

Process-Based Warning Flags

  • Guidelines do not exist for the performance of causal analysis
  • Business performance assessment program frameworks do not provide for executive or senior management sponsorship each assessment
  • Assessment protocols allow for excessive participation by members of the organization being evaluated
  • Performance evaluations, merit pay increases, and bonus are overly tied to achievement of high assessment grades/results
  • Reward systems do not recognize those performing thorough, value-adding business performance assessments

Process Execution Warning Flags – Behaviors

  • Leaders of the evaluated organization interject themselves into the business performance assessment process prior to more senior leaders receiving the report
  • Organization leaders have a propensity to ‘shoot the messenger’ in response to unfavorable news
  • Organization leaders do not value constructive criticism and in severe cases may treat delivery of such messages as a career limiting event for the assessment team
  • Organization leaders actively reward those who routinely present ‘good news’ and/or the ‘desired message’
  • Organization leaders do not openly challenge assessment conclusions based on intentions and/or recently self identified issues
  • Organization leaders do not routinely probe for additional information regarding the lower level causes to business performance assessment identified issues and opportunities
  • Business performance assessment leaders and team members identifying true improvement opportunities are rebuked by other members of the workforce

Potential, Observable Results

  • The organization is slow to react to market changes
  • Organization change occurs over long periods of time, typically when a new leader assumes control
  • Competitors routinely outperform the organization
  • Poor performing employees (delivering softer or the desired messages) advance ahead of stronger performing employees (delivering more accurate but harder messages)
  • Poor performing employees (delivering softer or the desired messages) tend to be at least equally compensated and receive similar or greater merit increases and bonuses to stronger performing employees (delivering more accurate but harder messages)
  • Better performing employees leave the organization because of its lack of value for strong and improved performance
  • Better performing employees admonished for competent performance leading or on a self assessment team leave the organization

Potential Causes

  • Executives and managers lack or avoid accountability
  • Executives and managers are uncomfortable holding peers and subordinates accountable
  • Business performance assessment team leaders and members fear for their job security and so deliver the reports they feel executives and managers will accept without adverse consequences being realized
  • The organization’s culture does not value constructive feedback as a tool for continuous improvement
  • The organization values tenure over performance
  • Executives, managers, and the workforce unduly fear the change that comes with organizational improvements

Final Thoughts…

Business performance assessments crediting good intentions or self identification of issues rarely occur in organizations with a culture that embraces these introspective assessments as a learning opportunity, not a witch hunt. While delivery of the self assessment’s findings should always be done with respect and tact, no one is served when the message is diluted or hidden.

In addition to avoiding placing a positive spin on one’s own business performance assessments, organizations should watch for similar messaging coming from outsiders such as regulatory organizations and industry groups. If such spin is conveyed in these group’s reports, an effort should be made to probe for the underlying issues so to be able to identify the unreported issues.[/wcm_restrict][wcm_nonmember plans=”47805, 25542, 25653″]

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Additional Resources

Lack of organizational accountability plays a significant role in the crediting of good intentions and recently self identified issues as assessment report conclusions. Principle, best practice, and warning flag articles on organizational accountability helping leaders enhance their company’s performance in this area can be found within the StrategyDriven topic: Organizational Accountability.

Other StrategyDriven recommended practices helping assessment teams avoid good intention and recently self identified issue conclusions can be found in:

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StrategyDriven Business Performance Assessment Program Article

Business Performance Assessment Program – Criticisms Appear Harsher When Put into Print

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StrategyDriven Business Performance Assessment Program ArticleFact or fiction, anything formally documented assumes an air of legitimacy. Combine this implied legitimacy with the stark black and white of the printed words and any identified improvement opportunity can appear overly harsh and critical, especially to those responsible for the performance. Apparent aggressiveness within a self assessment can result in resistance to the evaluation findings; often by those who stand to benefit the most and who must own the corrective actions.[wcm_restrict plans=”47721, 25542, 25653″]

Avoiding defensiveness while still conveying improvement opportunities and their importance is the challenge faced by all assessment leaders. While total resistance avoidance is not realistically achievable, following these few principles will help make assessment findings more palatable and accepted:

  1. provide situational context
  2. avoid the use of absolutes
  3. back up assertions with at least three facts each
  4. facts should be observable and quantitative whenever possible
  5. provide validated, observable, and quantitative external benchmarks
  6. discuss assessment facts with those being evaluated throughout the assessment process to afford them the opportunity to validate the facts on which conclusions will be based
  7. present assessment findings in person; being available to provide additional commentary as requested

Principles one and two help the assessment read better by respecting the situation of those assessed. Principles three, four, and five ensure the assessment is credible and that those assessed can personally validate the facts. Principles six and seven ensure open dialogue affords the assessed an opportunity to offer fact validation and context and provides them the opportunity to express their opinions and conclusions for consideration.

Respect for those being assessed and credibility of the report, achieving these goals will help the report read less harshly or at least be more accepted.

Final Thought…

Business performance assessments are not effective unless the message delivered is heard and acted upon. However, assessors will sometimes encounter situations where unexpected or undesired evaluation findings result in management’s summary rejection of the report in part or whole under all circumstances. When these situations occur, it is important to remember that the integrity of the assessors and the report are more important than finding acceptance. It is always better to fail on the side of the truth than to succeed by unduly softening or distorting known realities.[/wcm_restrict][wcm_nonmember plans=”47721, 25542, 25653″]

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StrategyDriven Business Performance Assessment Program Article | Three Whys Deep

Business Performance Assessment Program Best Practice 6 – Three Whys Deep

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StrategyDriven Business Performance Assessment Program Best Practice ArticleExecutives, managers, and individual contributors familiar with the day-to-day workings of their organizations undoubtedly know or have contrived the reason for ‘why things are the way they are.’ Beyond this understanding, sometimes at an unconscious level, these individuals will perceive one or more drivers to these organization shaping whys. What remains unseen and unthought-of are the tertiary and lower level drivers to why the business performs as it does. It is here that truly useful insight can be gained; insight enabling the foundational changes needed to alter the organization’s direction and propel it to the next level.[wcm_restrict plans=”25541, 25542, 25653″]

To be of real value, business performance assessments must get to tertiary and lower drivers; otherwise they are nothing more than simple collections of already known data. Assessors should therefore strive to ask three whys deep before drawing their final conclusions on organizational performance.

How to Get to the Third Why

Getting to the third why and its valuable insight can be challenging, after all, these drivers are largely outside of the organization’s collective conscious. Therefore, the following method is offered as a means of third level driver identification.

Step 1: Identify and Document the Strength or Problem

Variability increases the further away from the source of organizational strength or challenge assessors probe. Therefore, it is critically important to precisely and concisely identify the strength or problem statement first. This statement should be documented and discussed by the assessment team to ensure unity of understanding.

Step 2: Brainstorm Possible Level 1 Causes of the Performance Strength or Problem

Performance drivers not considered by the assessment team, particularly at Level 1, may prevent the team from identifying the one insight that leads to breakthrough growth. Therefore, it is important at this stage to consider all possible performance drivers.

The most effective means of ensuring all potential performance drivers are considered is to consolidate the assessment team’s collective experience in a performance driver identification brainstorming session. The outcome, the list of potential performance drivers, should be documented and communicated with the entire assessment team to ensure a common understanding.

Step 3: Validate the Level 1 Performance Drivers

Once a list of potential Level 1 performance drivers has been created, it will be important to identify which drivers play an active role in organizational performance. Only those impactful performance drivers will be considered in Step 4.

It is important to remember that not all identified potential Level 1 performance drivers will actually exist within the organization. Additionally, some drivers may exist but have little or no influence on organization behavior and so can be disregarded. Finally, validation of the relevance of the potential performance drivers will typically require some combination of document reviews, personnel interviews, and in-field observations along with the subsequent data analysis and calculation.

Step 4: Brainstorm Possible Level 2 Causes of the Performance Strength or Problem

Like Step 2, it is important to leverage the collective experience of the assessment team in identifying potential causes of Level 1 drivers. As before, these potential drivers should be documented and socialized with the entire assessment team to ensure a common understanding.

Step 5: Validate the Level 2 Performance Drivers

Assessors should follow the approach described for Step3. Note that at this point, the reasons for organizational behavior are becoming more vague to both leaders and staff members. At this point, the diverse experience of outsiders, internal and external, become invaluable in ‘seeing’ past organizational predispositions and to the existence of performance drivers; particularly undesired drivers and those conflicting with the organization’s values or self image.

Step 6: Brainstorm Possible Level 3 Causes of Performance Strength or Problem

and

Step 7: Validate the Level 3 Performance Drivers

These steps are a repeat of Steps 4 and 5 respectively. Insights of organization outsiders become increasingly important now as conclusions drawn should be well outside of the organization’s conscious. Whenever possible, driver validation should be supported by quantitative or a significant amount of collaborating qualitative evidence. If not already being done, assessors should routinely brief stakeholders to ensure ongoing buy-in for their conclusions.

Step 8: Conclusion Documentation and Communication

As with all self assessments, the conclusions reached should be well documented and communicated to key stakeholders. Documentation should include enough detail that later readers of the assessment will not only understand the conclusion reached but will be able to logically follow the evidentiary reasoning for it. Communication should motivate those who can preserve good or improve on poor performance to do so.[/wcm_restrict][wcm_nonmember plans=”25541, 25542, 25653″]

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Additional Resources

Several other StrategyDriven best practices work in concert with Three Whys Deep to ensure assessment teams reach insightful, value adding, and robustly supported conclusions including:

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