In earlier days the ship’s position was plotted on a chart every day using a sextant. Today thanks to GPS, you can see the position on a map continuously, without any effort. The weather will move the ship on auto-pilot and there are other devices that will act in concert to enable the ship to be back on track.
I remember my first appraisal thirty years back. It was my first meeting with my boss on things I was supposed to deliver during the year. It was the only meeting I had and the things I had envisaged I would do had completely changed. In those days a format with two pages captured the essence of this predicament. When the goal post had shifted, the game did not, where the game shifted, the goal post did not.
My boss was kind and he had seen the world. His missive was short, ‘improve’, that is all that he said.
In thirty years we have improved the way we should do appraisals. We have a policy deployment process and goal alignment and cascades of all kind. We also monitor performance during the year and self-declare our achievements that get reviewed periodically. These are best practices.
But let’s look at how digitization has changed the way a customer experience is improved. I recently came across this data that “Amazon has performed experiments showing that for every 100 millisecond improvement in its web-services, its sales increased by 1%. With $88 billion in online sales in 2015, that translates to $8.8 million of increased sales per millisecond. Regardless of which research you read (and there are many more), the positive correlation between digital performance, customer experience and revenue is indisputable.”
Take the automotive sector and digitization has completely transformed it. It is now possible through satellites that track car systems and plug-in necessary upgrades in software without taking the car to the service station. If there is a recall necessary for any eventuality, the car gets a message on the dashboard through satellite communication.
So I think that the speed at which we make improvements in the customer space are several times higher than the speed we use for gauging our own performance. But performance of individuals is hardly the do-all and end-all, it is the performance of groups and embedded structures we are talking of now. It could well be that the individual in question was doing brilliantly because the structure and processes around him acted in concert to enable him to do so. Putting such a brilliant performer in a different setting where he is constrained by processes and structures would see a completely different result.
So let us come to the central question of our times. With so much of digital progress that has hastened our ability to serve better, how do we use that same technology to monitor our own performance on an on-going basis? How do we make a constant plot of our progress on a chart where the ship is changing track with impending changes in weather?
Performance management in the digital age has to move along two very critical dimensions:
- Plotting the Strategic landscape with all its associate elements digitally
- Positioning your ship in that changing landscape and monitoring at relevant intervals
Gone are the days when you plot five force models and think you know where to act. The whole game is now one constant evolving paradigm that refuses to settle.
Every move is only evolving from one momentary assessment of a large number of variables. This must be placed against the moves of many others, and the economy and the variables that impact the results. The customers are changing and so are their desires.
Performance of a group or an individual against fixed targets is like refusing to budge from a position that does not exist. This re-allocation of the original winning position cannot be done against the back-drop of a number of variables unless we use digital technology. That is the only way bias can be removed as it is impossible to reset all parameters on a continuous basis even if some rules are agreed upon.
I see a future which is as follows. The performance document will be replaced by an App that will be accessible by a large number of people. The deliverables will keep changing as the variables that impact performance will be updated on a continuous basis. With uploads of new data, the lanes through which individuals and groups would interact will crisscross under some rule based guidelines. The actions and the consequences of these actions will be played back to chart out the next course of actions.
The App will act as a performance guide to make change happen; it will remain as means to an end. Not an end in itself. The plotting of individual performance against actions will show where the good is happening or likely to happen. The focus will shift to those areas of actions where future data could be hazy.
Future will be more uncertain, so the final destination would have to be piloted with such tools that rely on algorithms which work on optimization techniques. Objective functions will clash, no one function can be maximized alone. What actions will get us to an optimal solution will be part of this algorithm.
It is not very difficult to imagine this. In fact current scenario is no different. But the challenge is that all actions that are taken by one group are not visible to the others and neither are the implications. The digital technology could help us do that in the future.
I go back to the ship example, the future of shipping is moving towards pilot-less maneuvering. If such wonders are happening, making performance management to happen on digital platforms is relatively simple, or so it seems.
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