Summary
The mandate to operate at an optimal level of performance and meet financial and organizational expectations is transforming the way organizations do business. This evolution is driving higher standards of competence in day-to-day operations and adding new pressure to increase stakeholder value. In today’s rapid-paced business climate, the agility with which a company manages performance can determine market position and company profitability.

Examining Performance Management
Performance management is the strategy and process for leveraging best practices, methodologies and technology to manage the performance of an organization and its business network by leveraging assets to achieve a common set of goals and objectives. Performance management focuses on aligning, optimizing and understanding action and decisions and ensuring the collaboration and empowerment of all individuals across the business network. This enables all individuals to work across strategic, tactical, and operational levels to align actions to ensure optimal performance. Performance Management can enable improved efficiency, quality and value of assets and resources to optimize the effectiveness of management and business processes.

One of the most crucial organizational challenges is to transition the culture and methods towards performance management. Established executive and organizational politics can fracture a company’s ability to transform into a more transparent, bidirectional, performance-driven culture. Enlightened organizations address this issue with executive mandates and solutions that leverage collaboration and metric-driven applications. They actively coordinate and communicate direction and progress on performance goals to communities of individuals.

The Performance Management Process
A critical piece of this methodology is the process for managing performance in a framework that aligns to how organizations actually operate today. Ventana Research has simplified this process from years of research into a process called PerformanceCycle. This process employs a three step, "align-optimize-understand", closed-loop process that links the business and user requirements for any level of the organization. This process then provides the mechanisms to assess and utilize technology that can provide people with information and through collaboration, reduce the cycle to making decisions or taking action.

The PerformanceCycle
Align – To align the business, you must be able to coordinate and drive individual actions based on information and performance targets. This should provide the ability to leverage historical internal and external benchmarks as a reference for driving change in an organization. This should leverage personalized information that can also be continuously monitored. This provides the ability for goal setting, scoring, notifying and automating the performance management process.

Optimize – To optimize the business, you must enable automated and manual methods to collaborate and share knowledge on information and apply analytics for performance improvement. This provides the ability to employ sophisticated models and algorithms for creating forecasts and plans that can simply or dramatically change the organization. This provides the ability to forecast, collaborate, integrate, and act on information.

Understand - To understand the business, a business model that represents the activities and processes of the organization must be created. This provides the ability to measure the historical context of the organization through quantitative and qualitative information. This provides the baseline information through a set of sub-steps - model, access, discover, and interact with information.

Performance Management Network
It is important that organizations apply PerformanceCycle across all levels and that individuals can collaborate on information prior to taking action or making decisions.  This will build an interlocking PerformanceNetwork where the ability to optimize areas of the organizations and align individual actions can operate bi-directionally. The PerformanceNetwork is comprised of three key areas – the Level of the organization, the Focus in managing performance and the Type of information. The network truly relies on the performance of others in the network to achieve, and then sustain optimal performance. 

Level – The level of the PerformanceNetwork determines the types of user requirements for which individuals need to understand, optimize and align performance. The common three levels are Executives, Management and Individuals.

Focus – The focus of the PerformanceNetwork is the scope for which the level of the organization requires information and collaboration among individuals. The three levels have corresponding focus in the organization. The executives have a strategic focus, management who has a tactical focus and the broader individuals who have an operational focus. 

Information – There are three types of information in the PerformanceNetwork for which the organization requires information for managing performance. The three types of information that correspond to the level and focus of the organization are: executives who have a strategic focus and require business information, management who has a tactical focus and requires business entity information and individuals who have an operational focus and require process level information.

Summary
Performance management provides a critical foundation for organizations to manage their businesses and empower individuals to make the right decisions to maximize efficiency. The ability to leverage information and collaboration throughout the PerformanceCycle align, optimize and understand steps will improve the quality of the organization. Capturing the knowledge gained from across the organization can build long term value for stakeholders. This is now possible by building a roadmap for performance management and aligning existing and future technology investments. Now, as never before, businesses have the ability to implement performance management to transform entire organizations with a focus to achieve goals. And now, as never before, the pressure is on businesses to manage their performance.