Beyond Performance Management: Why, When, and How to Use 40 Tools and Best Practices for Superior Business Performance [Hardcover]

Surveys show that the most frequently used management tools - benchmarking, strategic planning, mission statements, customer relationship management, outsourcing, and the balanced scorecard - all have dismal satisfaction ratings, according to Jeremy Hope and Steve Player in this book.

Most management tools are either badly chosen or poorly implemented, according to the authors. The book aims to re-examine and re-present 40 different management tools and practices for a new management age. The tools and practices are grouped into five categories: strategic planning, shareholder and customer value, lean cost management, performance measurement and performance evaluation. For each of the tools and practices, the authors provide a description and assessment of effectiveness, an explanation of the possible benefits, and a list of actions that you should and should not take to maximise the potential of the tool or practice.

The authors list positives and negatives for each of the tools and practices, so it is hard to pin down their specific preferences. However, I gained the strong impression that they feel that "command and control" style management is bad, "empower and adapt" is good. Strategic planning is past its use-by date because it is "command and control" and the world moves too quickly nowadays, but the balanced scorecard is good provided it is used to "empower and adapt" and not to "command and control". Lean anything (manufacturing, services, accounting) and rolling forecasts are good, but budgets and Enterprise Resource Planning systems are bad. Executive bonuses are bad, but profit-sharing schemes are good.

Most managers who have experience with a range of the tools and practices covered in the book will find some areas of disagreement with the authors. Perhaps inevitably because of the scope of the book, those interested in investigating a single tool may find that the book does not cover it in sufficient depth. Nonetheless, the book provides a very useful and interesting overview.

Jeremy Hope and Steve Player provide a crystal clear explanation of why they wrote this book: Its purpose is "to critically review a wide range of management tools and provide a number of guidelines that will help leaders select the right ones, implement them in the right way, and gain maximum value for their use," More specifically, their focus is on "forty tools and practices - those that typically represent a major change initiative and significant capital investment. We will examine these tools and practices through five perspectives of what is often known as `performance management': strategic planning, shareholder and customer value, lean cost management, performance measurement, and performance evaluation." Hope and Player devote a separate Section to each of the five. Also, they devised a generic format that is used within each of the 40 chapters:

o What is this practice and how effective is it?
o What is the performance potential of this practice?
o What actions do you need to take or avoid maximizing the potential of this practice?
o Conclusions (i.e. summary points)
o Further reading (excellent suggestions to those who "want to know more" about the given subject

To what does the word "Beyond" refer in this book's title? Although Hope and Player do not provide a specific explanation, my inference is that whatever is effective management today may not (indeed, will probably not be) adequate to meet tomorrow's challenges. Especially in today's global business world, change is the only constant. Moreover, the challenge to change management is exacerbated by the ever-increasing speed, complexity, and impact of the changes that occur.

Therefore, all of the information, insights, and counsel that Hope and Player provide in abundance will directly or indirectly help business leaders to establish and then sustain continuous improvement of the management at all levels and in all areas of operation throughout their enterprise.

As I re-read this book while preparing to review it, I realized that it would be an excellent gift to those who are preparing for or have only recently embarked on a career in business. That said, I think this is not only a "must read" but also a "must have available to consult" source for all business leaders who recognize the need to understand why, when, and how to master and then use essential tools and best practices to help achieve superior business performance, not only as individuals but with their associates.

Before I conclude this review, please allow a personal digression. I became friends with Jeremy Hope years ago. I read and reviewed his previous books and was eager to read this one, his last. Tragically, he did not live to see it published. He died much too young and left a loving family and countless friends. Jeremy's heart was even bigger than his brain. He will be missed but never forgotten.

Yikes! A new employee, an experienced user of the Total Quality Management system, is lobbying hard for you to adopt TQM. Yet a new board member is shocked your organization doesn't use the Balanced Scorecard approach. Then there's that major donor, a zealot for Six Sigma (TQM on steroids), who has offered a fat check if you implement that best practice.

So how do leaders and managers differentiate between all of the management systems and tools--and pick the right one, at the right time, for the right reason?

Harvard Business Review Press has come to the rescue with this terrific new book. It's a keeper.

Authors Jeremy Hope and Steve Player write, "Many tools and practices suffer from poor practice. And having absorbed huge amounts of management time and expense, companies abandon many tools as the consultants move out and the internal project champions move on. Abortive tools and systems are a major source of management frustration, added complexity, and wasted time and cost."

They add, "Too many organizations rush into buying and implementing tools without first considering the fundamental question: which problem are we trying to solve? Framing and answering this question would avoid many expensive mistakes."

Or as Peter Drucker said, "I was taught that you make a diagnosis before you operate. And nine times out of ten, when you make the diagnosis, you don't operate."

The workplace has changed, of course, since many of the classic management tools were born. Many of these tools still work yet, say the authors, but must be applied with "empower and adapt" management models versus the old "command and control" top-down approach.

The 40 tools are categorized into five major sections: Strategic Planning, Shareholder and Customer Value, Lean Cost Management, Performance Measurement and Performance Evaluation.

But think toolbox versus novel. There's no need to read the entire book from beginning to end (I didn't). Instead, do a quick scan of the table of contents and the 40 tools, and then, to get your feet and mind wet, read three or four tool summaries. That gives you the big picture of what to expect from the book--and how to leverage the wisdom. But this caution: the short chapters are so informative, you'll have a tough time putting the book back on the shelf.

Example: Tool #38 - Recognition and Rewards. "Incentive compensation is almost without exception dysfunctional to some degree or another.

"...if an employee is unhappy because of problems with pay, status, or working conditions, he will not suddenly be motivated to greater effort and productivity by removing these problems. Motivation is intrinsic to the job. It is about responsibility, recognition, and personal development, and no amount of pay on its own will drive a person to higher levels of achievement. In one of [Frederick] Herzberg's most telling metaphors, he said that, whereas a motivated person is self-powered by a generator, an unmotivated person is powered by a battery that needs constantly recharging."

Each 10-page (or so) chapter gives a succinct paragraph definition and then a helpful and non-technical discussion of the tool. Then the authors list several bullet points to answer the questions:
--What is the performance potential of this practice?
--What actions do you need to take to maximize the potential of this practice?
For the second question, they list both "Actions to Avoid" and "Actions to Take."

In the chapter on the Mission Statements tool, the authors quote British economist John Kay who writes, "Bogus rationality is probably best described as the kind of rationality that says, this is the way we are going to make decisions in a world in which we think we know much more than we (actually) do and believe we have much more control over it than we (actually) do. It is a process which has the appearance of rationality but in the end it doesn't. It isn't rational."

Each chapter also includes a list of books and articles for further reading, and every chapter has numerous sidebar articles--most of them fascinating, memorable and quotable for your next staff or department meeting, such as:

"In a recent interview, legendary leader and former CEO of General Electric, Jack Welch, stated, `Shareholder value is the dumbest idea in the world.' He added, `Shareholder value is a result, not a strategy ... Your main constituencies are your employees, your customers and your products."

Or as Kay said, "No one will be buried with the epitaph, `He maximized shareholder value.'"

They also warn leaders not to select a performance management model that just happens to be the "flavor of the month." Think back--here or in other places you've worked--where the "flavor of the month" approach failed to enhance organizational performance.

There are more than 40 management tools, of course, but this book highlights the 40 relevant-for-today tools including: Mission Statements, Strategic Planning, Stretch Goals, Knowledge Management, Benchmarking, Sustainability, Loyalty Management, Activity-Based Costing, Key Performance Indicators, Performance Appraisals and Executive Compensation. While the book is written for leaders of for-profit enterprises, nonprofit leaders and managers will certainly find huge value in this unique toolbox.

In 1995, Harvard's John Kotter pointed out that only 30 percent of change programs succeed. So...before you embrace a new tool (and create an unnecessary revolt in the trenches), read the book as part of your due diligence process.