Is Performance Management the Caterpillar or the Butterfly?

Is the Performance Management framework the beginning or the end?

My older brother and I recently attended an evening reception in Chicago honoring R. Buckminster Fuller, one of last century’s true visionaries. Bucky, which was his nickname, was the designer of the geodesic dome and author of the book, Operating Manual for the Spaceship Earth. My brother was a university student mentored by Fuller. Fuller foresaw the concept of environmental sustainability well before its now accepted importance.

One of the simple but profound statements Fuller once said is, “There is nothing in a caterpillar that will tell you it will be a butterfly.” This stimulated me to think about how some managers without sufficient vision view all of the integrated methodologies of the Performance Management portfolio, such as strategy maps, scorecards, dashboards, customer relationship management, activity based costing, driver based budgeting, lean management, and analytics to name a few.

Myopic managers view these as just reporting and planning tools. These managers view these methodologies as the caterpillar. In contrast, visionary managers view them as the butterfly. The butterfly is organizational transformation. That is, the ultimate benefit of integrating these methodologies is the decision making and prioritizing of innovations and actions that realize value creation. It is not enough to just construct all of these modeling techniques.

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True leaders go to the next step and cascade the performance measures, with challenging but achievable targets, that are all linked to projects, initiatives and process improvements. They do this in a way that operations are continuously, economically and efficiently aligned with the ever dynamic re-directions of constantly adjusted strategies – and the resources required and used to execute the executive team’s strategy are optimal.

Excess resources produce waste, and insufficient resources cause service level erosion or postponement of meeting critical time fences that can close and miss opportunities. Both conditions destroy stakeholder value.

When implementing and integrating the Performance Management framework, look for the butterfly.