It’s one thing to hire the right people and provide them with the right tools to succeed in an Ownership Thinking (OT) environment, but the big question remains: How best to gauge their performance?
This is a tough question given that many employees hired into a company that has implemented OT—or who are kept on through an OT transformation—will probably view any new focus on metrics as a major cultural change. Most firms simply don’t focus on connecting their employees’ performance to the company’s bottom-line success. There’s the chance that many staffers might see this as an unnecessary burden. As we discussed in previous posts, not all of those people will thrive or, ultimately, survive in an OT environment.
Others might question performance measurement methodologies. They’re correct to raise an eyebrow at how most CEOs or managers attempt to gauge workplace performance.
That’s because most get it wrong.
We make one thing very clear when helping a company implement OT: An essential element of organizational success is identifying and focusing on key performance indicators that create wealth. Why? When employers understand and measure the activities that lead to financial success, they can determine where performance needs improvement.
Trouble is, companies often measure performance based solely on financial results. This means they base decisions on historical data that can’t be changed. OT gives organizations the tools to identify KPIs and forecast results on a regular, formal basis. Monitoring KPIs that look forward rather than backward allows owners to enact changes quickly.
Financial statements simply aren’t enough to measure because employees perform better when focusing on activity-based measures that drive financial results. Actual financial results only need to be shared in a simplified manner. It’s the reason why KPIs need to be tailor-made to suit an individual company’s competitive requirements and growth objectives.
No two firms are the same, even when they’re working in the same sector, so a custom approach to performance measurement is crucial. So, too, is understanding the strengths of your workforce and knowing what motivates them to go the extra mile.
Which brings us to the lynchpin of the OT model—incentives. Stay tuned for more on that in my next post.
Perry Phillips, President
Ownership Thinking Canada
Visit www.bradhams.ca to learn more about Ownership Thinking Canada and the upcoming May 8, 2012 seminar in Toronto.