Dr. Tim Baker breaks down how he thinks we should model and evaluate organisational performance.

We toss the word “performance” around a lot in HR, especially when it comes to employees and organisations. “He’s not performing.” “She’s increased her performance on the job.” “That team performs well under pressure.” “That manager needs to pick up his game,” and on and on it goes.

But what do they actually mean? What does performing well in a transformational global economy look like? Does it mean exceeding certain KPIs? Is performing at work more than a set of KPIs? What’s at the heart of organisational performance?

Instead of regurgitating several well quoted definitions of performance from a bunch of reputable sources, I want to define agility and its various dimensions and their relevance to organisational performance. Further, I want to introduce you to a model of agility to evaluate organisational performance.

Acute competition, the bewildering array of choices open to the consumer, and the commoditisation of goods and services, means speed and responsiveness is the difference between the performing and non-performing business. Enterprises prospering in this hypercompetitive global marketplace do things faster than their competitors, with the same—if not better quality.

As a customer, I want new and better products and services at a good price; swift turnaround time for any “stuff ups,” and my preferences met. I’m sure I’m not alone in this.  If companies can’t—or won’t—do all this, then I’m shopping elsewhere, either virtually or physically. Performance is ultimately about speed, and speed comes from applied learning, and the capacity to be agile.

Let’s briefly review what I think of as the seven dimensions of agile performance.

1. Innovation

Innovation means being in the marketplace first with new goods and services that customers want and need. It’s about constantly experimenting with new features that give customers what they want, before a company runs the risk of losing them to a competitor who is more innovative.

2. Processing

Processing means dispensing everything through the organisation as quickly as possible; faster than competitors. This covers activities such as shortening cycle times for designing training programs and company restructures, and processing products and services from order to delivery. For example, a banking institution may get an edge over its competitors by have the fastest processing of applications, with appropriate and thorough checks, for approving the financing for an investment property. Processing speed is not about cutting corners and forgoing proper QA; it is about getting things done faster, without sacrificing quality.

3. Recovery

Recovery refers to the time it takes to respond to rectifying a mistake. A fundamental tenet of superior customer service is how quickly a company can fix a slip up; that is, correct a difficult situation concerning a customer transaction. Customers — if they feel their complaint is being dealt with priority, in a speedy manner — are frequently forgiving. Apart from doing the right thing, holding onto an aggrieved customer and not losing them to a rival business is the objective.

4. Continuous improvement

Continuous improvement agility is not the same as innovation agility, despite often being discussed together. There’s an important distinction. While innovation is about creating something new, continuous improvement is about building upon something that already exists.

5. Customer responsiveness

Agility is essentially a customer-driven concept. All seven dimensions of agility impact the customer somehow. The dimensions of recovery and customer responsiveness are directly related to the customer, and the other five are indirectly related. Since business is dependent on customers and agility is a customer-centric idea, it’s reasonable to include customer responsiveness in the model as a separate dimension.

6. Problem-solving

Workplaces are now intricate organisms with an assortment of multifaceted problems, predicaments, and dilemmas requiring solutions daily. Only a few decades ago, workplaces were slower, localized, and predictable. Being able to problem-solve is part of the repertoire of the modern sought-after employee. Even though problem-solving is a core skill-set in a transformational working world, the performance systems universally used haven’t kept pace with change.  

7. Changing direction

The agility to change direction is a culmination of the other six dimensions:

•      to innovate is to change direction;
•      to process faster requires a change in normal practice;
•      recovery from a mistake means changing direction;
•      continuous improvement is about altering the way something is done;
•      customer responsiveness is usually about shifting priorities to cater for the need of a customer; and
•      problem solving is often about thinking outside the box.

Agility is ultimately about changing direction in some form. Everything an HR professional thinks, says, and does ought to bear this in mind.

This article is from Dr Tim Baker’s latest book, Performance Management for Agile Organizations: Overthrowing the Eight Management Myths That Hold Businesses Back.