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Measuring Strategic   Performance       PMIWDC June 20, 2011             11:30-13:00Jenine Serviolo, PMP, SDI® Facilitator...
Introduction President &                      Relevant Certifications &  CEO, SMART                        Industry Enga...
Agenda Strategy discussion               Defining measures Performance versus                Designing reports  progre...
Strategy   Strategy is about achieving change or    maintaining excellence    • Where are we now?    • Where do we want t...
Performance vs Progress   Performance focuses on meeting objectives    • Strategic    • Top down view    • Used by Execut...
Focus by Management Discipline   Management                                 Management Focus      LayerExecutive          ...
Portfolios   A portfolio is a collection of projects or programs and other work grouped together    to facilitate effecti...
Programs and Projects          A program is a group of related projects managed in a coordinated way to obtain           ...
From the top    What do we need to achieve?       • Goals  Objectives    What do we need to Start, Stop or Change to   ...
Cause and Effect   Cause and Effect relationships    • Direct correlation between completing a work effort      and gaini...
Results Mapping                                                            Success   Stacey Barr                         ...
Results Mapping Focuses on the  results of each area Lines indicate key  relationships    •   Companion    •   Cause and...
Strategy Mapping                                                                                      Mission/Vision   Ba...
Strategy Mapping                                                                                     Mission/VisionA strat...
Objective Gantt ChartExcerpt from PMI’s Project Management Journal, December 2010: Measuring Portfolio Strategic Performan...
Defining Performance Measures                               Mission/VisionProcess Financial Customer                      ...
Defining Performance MeasuresFocus on objectives using              Examplethe measure and target                         ...
Defining Performance Measures   Measurement worksheet    • Assigns ownership and responsibility    • Defines data at lowe...
Performance Measure WorksheetMeasure Status     Is this measure fully operational, in use but needs updating or is it     ...
Measure WorksheetData Sources            From where will the Owner get the data – may be an electronic data               ...
Performance Reports   Focus on Objectives    • Are we meeting the objective target?    • Allow program and project manage...
Performance as Aggregate                                                      Bottoms up                                  ...
Performance by Objectives                                                    Top down                                     ...
Explaining Performance SMART Management Consulting, LLC   24
Explaining PerformanceUse progress chartsand reports to explainperformance variations– only as needed                     ...
Performance Reporting Tips   Start reporting objective performance right away – don’t    wait for supporting initiatives ...
Performance Reporting Tips   Use performance reporting as part    of your communications plan   Provide training on char...
References   Strategic Planning    • Balanced Scorecard        o   Kaplan and Norton        o   Palladium Group        o ...
References   Leadership & P3M3    • Personal Strengths Publishing       o   Strength Deployment Inventory® (SDI)       o ...
Questions? SMART Management Consulting, LLC offers training, workshops and consulting in all aspects of       •   Leadersh...
Contact InformationJenine@SMARTManagementConsultingLLC.com          SMART Management Consulting, LLC   31
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Measuring Strategic Performance

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Are your measures strategic? Are you measuring the right things to make sure your organization is strategically successful? Top-down versus bottoms up tracking.

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Measuring Strategic Performance

  1. 1. Measuring Strategic Performance PMIWDC June 20, 2011 11:30-13:00Jenine Serviolo, PMP, SDI® Facilitator SMART Management Consulting, LLC 1
  2. 2. Introduction President &  Relevant Certifications & CEO, SMART Industry Engagement Management • PMP Consulting, LLC • SDI® Facilitator PMI Involvement • Master’s Certificate in PM, GWU • PfM for the PM 2005 • Performance Measure • Standard for PfM 3rd Blueprint with Stacey Barr Edition • September 2011 o Balanced Scorecard Strategic Execution with Kaplan and Norton o Relationship Awareness Conference SMART Management Consulting, LLC 2
  3. 3. Agenda Strategy discussion  Defining measures Performance versus  Designing reports progress  Report analysis Management • Tracking and disciplines recommendations From the top  Tips Cause and effect  References o Strategy mapping o Results mapping o Gantt chart SMART Management Consulting, LLC 3
  4. 4. Strategy Strategy is about achieving change or maintaining excellence • Where are we now? • Where do we want to go? • How are we going to get there? Strategy stretches the organization • Far enough for productive tension • Not so far to cause it to snap Strategy comes from the top • It is the framework within which we make operational decisions SMART Management Consulting, LLC 4
  5. 5. Performance vs Progress Performance focuses on meeting objectives • Strategic • Top down view • Used by Executive Leadership and Portfolio Managers to assess and manage strategy execution Progress focuses on hitting milestones (schedule, cost, scope) • Tactical • Bottom up view • Used by Program and Project Managers to explain performance variances to Portfolio Managers and Executive Leadership SMART Management Consulting, LLC 5
  6. 6. Focus by Management Discipline Management Management Focus LayerExecutive Give us the overall OrganizationalLeadership direction to achieve the Performance mission and visionPortfolio Ensures we do the best PortfolioManagement combination of work to Performance to meet the mission and meet objectives achieve the visionProgram Ensures we do the work ProgramManagement most efficiently to deliver Performance to benefits in a coordinated deliver benefits fashionProject Ensures we do the work Project ProgressManagement right - on schedule, within to meet budget and scope milestonesThe related management disciplines of Portfolio, Program and Project are also known as P3M3 SMART Management Consulting, LLC 6
  7. 7. Portfolios A portfolio is a collection of projects or programs and other work grouped together to facilitate effective management to meet strategic business objectives. (PMBOK® Guide – Fourth Edition) The components of a portfolio are quantifiable; that is, they can be measured, ranked, and prioritized. A portfolio is a true measure of an organization’s intent, direction, and progress Portfolio management (PfM) is the coordinated management of portfolio components to achieve specific organizational objectives. (PMI® Standard for Portfolio Management – Second Edition) SMART Management Consulting, LLC 7
  8. 8. Programs and Projects  A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually  Program management (PgM) is the centralized coordinated management of a program to achieve the program’s strategic objectives and benefits. It involves aligning multiple projects to achieve the program goals and allows for optimized or integrated cost, schedule, and effort (PMI® Standard for Program Management – Second Edition)  A project is temporary endeavor undertaken to create a unique product, service or result  Project Management (PM) is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements (PMBOK® Guide – Fourth Edition)JS, (45) SMART Management Consulting, LLC 8
  9. 9. From the top What do we need to achieve? • Goals  Objectives What do we need to Start, Stop or Change to achieve our objectives? Alignment • Cascade down • Link up The Strategy Pyramid from Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World by David La Piana SMART Management Consulting, LLC 9
  10. 10. Cause and Effect Cause and Effect relationships • Direct correlation between completing a work effort and gaining a benefit or meeting an objective Cause • Initiatives (Annual, Business, Corporate Plans) • Portfolios, Programs, Projects, Operational Activities Effect • Goals, Objectives, Benefits SMART Management Consulting, LLC 10
  11. 11. Results Mapping Success Stacey Barr Corporate • Performance Measure Capability Process Blueprint Activity • Define the results that spell success and depict them showing cause and effect relationships Results Mapping StaceyBarr.com SMART Management Consulting, LLC 11
  12. 12. Results Mapping Focuses on the results of each area Lines indicate key relationships • Companion • Cause and effect • Lead-Lag Results Mapping StaceyBarr.com • Conflict SMART Management Consulting, LLC 12
  13. 13. Strategy Mapping Mission/Vision Balanced Scorecard (BSC) is an industry best Process Financial Customer practice approach to manage strategic Objective performance and is used for strategic planning First detailed in a series of articles and books Objective by Drs. Kaplan and Norton Objective Balances the Financial perspective with • Customer • Internal processes Objective Internal • Learning and growth Objective Requires us to develop objectives, metrics, collect data and analyze the organization & Growth Learning relative to each of these perspectives Objective SMART Management Consulting, LLC 13
  14. 14. Strategy Mapping Mission/VisionA strategy map assigns Process Financial Customerstrategic objectives to each Placement of ObjectiveBSC perspective and defines Customer &relationships between efforts Financial perspectives Objective • Reflects complete set of key reflect working objectives to achieve the with Government vision Organizations Objective • Defines cause and effect relationships between Objective objectives Internal • Action plans, performance measures and other detailed Objective plans are developed and & Growth executed to support the Learning strategy map Objective The balanced scorecard framework is recognized by the General Accountability Office (GAO) and used by the Department of Defense and other government agencies
  15. 15. Objective Gantt ChartExcerpt from PMI’s Project Management Journal, December 2010: Measuring Portfolio Strategic Performance Using KeyPerformance Indicators by Hynuk Sanchez and Benoît Robert SMART Management Consulting, LLC 15
  16. 16. Defining Performance Measures Mission/VisionProcess Financial Customer Objective Objective Objective Measure Target Initiative Objective Key Statement of How success The level of programs, pro what must be in achieving performance jects, activitie Objective achieved and the strategy or rate of s required toInternal what’s critical will be improvement achieve to its success determined needed objectives Objective & Growth Learning Objective SMART Management Consulting, LLC 16
  17. 17. Defining Performance MeasuresFocus on objectives using Examplethe measure and target Objective: Develop and deploy timely IT solutions (from IT department) Measure: By 30 SEP 2011 complete 50% of projects within 20% of their first approved date and cost baseline SMART Management Consulting, LLC 17
  18. 18. Defining Performance Measures Measurement worksheet • Assigns ownership and responsibility • Defines data at lowest levels o Key terms o Calculations o Assumptions • Sets data collection and reporting dates • Key communication tool o Output becomes part of Strategic Communications Plan SMART Management Consulting, LLC 18
  19. 19. Performance Measure WorksheetMeasure Status Is this measure fully operational, in use but needs updating or is it new? If it is fully operational or in use, please note the name by which the measure is currently identified today.Definition of Key What terms need clarification to remove ambiguity from theTerms measure or target?Counts, Example How will the measure or target will be calculated? Be as specific asCalculations or possible. Objective: Develop andFormulas deploy timely IT solutions (from ITIndicator Criteria Define ranges for Red, Orange, Yellow and Green. department)Baseline Status Is the measure baseline fully established, in progress, not yet started or is a baseline not applicable to this measure? Please By 30 SEP Measure: add any 2011 complete 50% of relevant detail. If in progress, or not yet started, what needs to be done to establish the baseline? projects within 20% ofAssumptions their first approved date What assumptions are being made about the measure, the data, and cost baseline processes, etc.? SMART Management Consulting, LLC 19
  20. 20. Measure WorksheetData Sources From where will the Owner get the data – may be an electronic data store, data call, survey results, etc.Data Collection What processes, procedures and tools will the Owner use to gatherProcedure the data from the source(s) and get the collected data to the Reporting Branch?Data Collection How often will the data collection procedure be followed?Frequency ExampleReport Frequency How often will the Report Branch brief the C level executive?and Objective: DevelopReport Format What format (run chart, list, pie chart, etc.,) willtimely IT deploy be used?Report Forum solutions (from IT In what forum with the performance reports be briefed? department)Report Location Where will the Perform Reports be stored?First Data Due Date On what date will the first data be provided to the Reports Branch?First Data Collection What period will the data of the first report cover? By 30 SEP Measure: 2011 complete 50% ofPeriod projects within 20% ofFirst Reporting Date On what date will the Performance Report first beapproved date their first briefed?Change Management When will this measure be reviewed again to ensure it is sustainable and cost baseline and remains valid for the goal? SMART Management Consulting, LLC 20
  21. 21. Performance Reports Focus on Objectives • Are we meeting the objective target? • Allow program and project managers to focus on initiatives. Use their progress data, along with other information to explain performance variations Chart and graph development • Keep it simple Respond don’t react to • Minimum “data bite” requirements data. o Target and points over time o Context or trend data SMART Management Consulting, LLC 21
  22. 22. Performance as Aggregate Bottoms up focusExample from PMI® Standard for PortfolioManagement – Second Edition SMART Management Consulting, LLC 22
  23. 23. Performance by Objectives Top down focusIncludesobjective,measure,target andperformancesummary SMART Management Consulting, LLC 23
  24. 24. Explaining Performance SMART Management Consulting, LLC 24
  25. 25. Explaining PerformanceUse progress chartsand reports to explainperformance variations– only as needed SMART Management Consulting, LLC 25
  26. 26. Performance Reporting Tips Start reporting objective performance right away – don’t wait for supporting initiatives or projects to start • Practice data collection • Keep performance visible • Acts as catalyst to start strategic initiatives • May see changes in performance without starting initiatives Use top down performance reporting to stay strategically focused • Use bottom up reporting to help explain variances in strategic performance Hold formal performance review meetings Ensure each level of management is clear on their performance reporting role and responsibility SMART Management Consulting, LLC 26
  27. 27. Performance Reporting Tips Use performance reporting as part of your communications plan Provide training on chart development and reading Keep charts simple Document and communicate what defines your red, orange, yellow, green performance indicators • Be consistent Once enough data is collected add control charts to graphs SMART Management Consulting, LLC 27
  28. 28. References Strategic Planning • Balanced Scorecard o Kaplan and Norton o Palladium Group o Balanced Scorecard Institute • Bascom “Dit” Talley o Instructor and Coordinator, Intelligence Analysis Program, JHU o President at Corporate and Government Consulting  Strategic Planning  Leadership Performance Measurement • StaceyBarr.com o Performance Measurement Specialist o Performance Measurement Blueprint o Key Performance Indictor Library SMART Management Consulting, LLC 28
  29. 29. References Leadership & P3M3 • Personal Strengths Publishing o Strength Deployment Inventory® (SDI) o Strategic Intelligence • Project Management Institute (PMI) • Project Smart Chart and Graph Development • Steve Souza, Liquilight.com Discover Your Data • Stephen Few SMART Management Consulting, LLC 29
  30. 30. Questions? SMART Management Consulting, LLC offers training, workshops and consulting in all aspects of • Leadership • Strategic Planning • Sustainability as Strategy • Portfolio, Program and Project Management (P3M3) Strength Performance Portfolio Emotional Balanced Delegating and Conflict Deployment Strategy Execution Intelligence building Team Prioritization and Management ManagementCoaching Scorecard ® Inventory RankingJenine@SMARTManagementConsultingLLC.com SMART Management Consulting, LLC 30
  31. 31. Contact InformationJenine@SMARTManagementConsultingLLC.com SMART Management Consulting, LLC 31

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