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INTRODUCTION

This is a how-to book. It explains how you and your colleagues can set the performance goals that matter most to your customers, to your shareholders, and to yourselves. It also lays out the managerial disciplines you need to achieve the goals you set. If you read and use this book, you will learn how to: n Set goals that are specific, aggressive, and achievable. n Set goals that matter to customers who want speed, quality, and value at a fair price.

• Set goals that matter to shareholders and funders who want a return on their investment and funding dollars.
  
• Set goals that matter to you in terms of opportunities, rewards, skills, and membership in an organization with strong values.
  
• Link the goals that matter to you to the goals that matter to customers to the goals that matter to shareholders and funders.
  
• Set nonfinancial as well as financial goals and link them together.
  
• Identify and use familiar and unfamiliar metrics that are relevant to today's most pressing performance challenges.
  
• Understand and use outcome-based goals that support success, while avoiding activity-based goals that produce failure.
  
• Set and commit to goals that challenge your minds and your hearts.
  
• Use the concept of working arenas to get beyond thinking only about "my job."
  
• Use the concept of working arenas to coordinate and align your goals with the goals of others throughout your organization.
  
• Understand how the time it takes to achieve different goals can help you see when and whether those goals fit together and make sense.
  
• Convert new visions, strategies, and directions into achievable outcome-based goals that can galvanize yourself and others in your organization.
  
• Choose when to use the team discipline to achieve your goals and when to use the working group discipline to achieve your goals.
  
• Choose when to use the horizontal/ process management discipline to achieve your goals and when to use the vertical/ functional management discipline to achieve your goals.
  
• Choose when to use the discipline of behavior-driven change to drive organizational success and when to rely on the decision-driven discipline.
  
• Build an outcomes management system to drive performance and personal development throughout your organization.
  I believe you will benefit from this book because the challenge of setting and achieving performance goals has become very confusing. It has been more than 30 years since Peter Drucker wrote about the importance of managing for results. His work led to the widespread practice of management by objective. But an awful lot has happened in the past 30 years. The world of business and organizations has changed dramatically, turning many of Drucker's specifics (though not his wisdom) upside down. In the aftermath of total quality, customer service, time-based competition, strategic alliances, globalization, reengineering, core competencies, continuous improvement, innovation, teams, horizontal organization, benchmarking, best place to work, information technology, diversity, environmentalism, deregulation and reregulation, eCommerce, and privatization, those of us left standing in today's organizations are unsure about what performance goals and outcomes make the most difference and why. We know that setting performance goals is key to managing ourselves and others, but we no longer know how.
  We continue to manage by objective. But the vast majority of our objectives are mere activities, or what I call "activity-based" goals. We set goals and objectives to pay better attention to customers and their needs, to team up better across the organizational silos, to build core competencies, to reengineer our processes, to globalize our management, and so forth. In doing so, we have utterly confused the distinction between the outcomes we are attempting to achieve and the activities by which we hope to achieve them. Activities are not and should not be objectives. Activities are how we achieve the objectives- the outcome-based goals- we set for our-selves. Activities are essential to our success. But activities are not goals. A major purpose of this book is to familiarize you with the distinction between outcome-based goals and activity-based goals and to help you set and achieve more of the former. Nor do we routinely differentiate among the most critical management disciplines needed to achieve the performance goals we set. Most of us continue to manage in one way, and one way only. Regardless of the nature of the challenge at hand, if we are bosses, we give direction, delegate responsibilities to individuals, monitor, and follow up. That is, in fact, one powerful way to manage. But it is only one of several management disciplines for delivering performance. Today, there are many other disciplines. This book will describe the major disciplines you need to use and help you figure out when you need to use them.
  The book is organized in four parts. Chapters 1 through 4 provide the background, concepts, tools, techniques, and frame-works you need to set specific outcome-based goals that matter to successfully navigate today's most pressing performance challenges. Chapters 5 through 7 focus on helping you align and coordinate goals throughout your organization. Chapters 8 through 10 describe the management disciplines you need to achieve your goals and how to make choices among them. Chapter 11 concludes the book with a step-by-step design for building an outcomes management system in your organization. Here's what you'll learn from each chapter.
  Chapter 1 starts with an explanation of the critical distinction between activity-based goals and outcome-based goals. It identifies the problems and misguided assumptions you need to over-come to avoid activity-based goals, including the pitfall of goals that are strictly financial. Chapter 1 reminds you that today's performance challenges demand outcomes that are both financial and nonfinancial, and that those outcomes must simultaneously benefit customers, shareholders, and the people of the enterprise and their partners. It introduces you to the cycle of sustainable performance, a logical framework you can apply to ensure that your organization's goals reflect a truly balanced scorecard. Chapter 2 helps you articulate and pick metrics that make success measurable. It describes the difficulties and challenges in using the unfamiliar metrics so often required by today's new performance requirements, and it introduces you to the four yardsticks- four families of metrics you can apply to set goals for any challenge you face.
  Chapter 3 reviews the SMART criteria that you must use to articulate outcome-based goals that are specific, measurable, aggressive and achievable, relevant, and time-bound. It encourages you to set and achieve goals by following an iterative cycle of performance that includes setting, pursuing, evaluating, achieving, and/ or adjusting goals continuously. Finally, Chapter 3 describes how to use a powerful logic device called a performance tree to break down any broad challenge you face into the set of specific goals that are most important for you and your colleagues to achieve.
  Chapter 4 expands upon the familiar notion of stretch. Everyone knows how important it is to aim high. By using stretch goals, we can achieve far more than we imagined possible. We also learn and improve the skills we need to prosper in today's tough competitive environment. Chapter 4 explores the link between learning and stretch goals and explains how you can use outcome-based goals to drive and respond to change. A series of specific tools is provided in Chapter 4 that expands on the idea of stretch. These tools will help you inject creative and personal tension into your goals.
  Chapters 5 and 6 introduce you to the concept of working arenas and describe how you can match performance goals to working arenas in order to avoid the chaos that too often troubles today's organizations. Instead of hopelessly trying to make all your goals fit your job, Chapter 5 encourages you to identify the working arenas you contribute to, and then fit outcome-based goals to those arenas. Chapter 6 helps you use working arenas to align and coordinate goals throughout the organization. In Chapter 6, you will learn why a single, all-purpose, static picture of organizational alignment is impossible in today's fast-moving world. But you will also learn how to dynamically align your organization around the visions, strategies, initiatives, and directions that matter most to customers, shareholders, and the people of your enterprise.
  Chapter 7 concludes the book's focus on aligning and coordinating performance goals. It more fully discusses the cycle of sustainable performance introduced in Chapter 1. In Chapter 7, you will learn how to link goals that primarily matter to customers to goals that primarily matter to shareholders to goals that primarily matter to the people of your enterprise and their partners. There are leading and lagging, cause-and-effect relationships among goals at all levels of the organization. By understanding these lead/ lag relationships and by identifying whether the time frames to complete goals are simultaneous or sequential, you can make sense out of all the various performance challenges and goals in your organization.
  Chapters 8 through 10 review the management disciplines you must use to achieve the outcome-based performance goals you set. Chapter 8 concentrates on the two essential disciplines by which small groups achieve performance: the team discipline and the working group discipline. Each of these is good. The issue of which to use is not an idealistic or moral choice of "command and control" versus "engage and empower." Rather, the question for any small group is which discipline makes the most sense in light of each specific performance goal the group faces. Chapter 8 describes how your small group can use a performance agenda to identify the most critical goals to pursue, and to choose when to use the team discipline versus the working group discipline to accomplish those goals.
  Chapter 9 describes the difference between managing horizontally across processes and managing vertically in functions. Again, each of these disciplines is important; the question is which discipline best achieves the goals at hand. Chapter 9 reviews the familiar particulars for managing functionally. It also describes the management principles to use when you face a horizontal process performance challenge. Finally, Chapter 10 reviews the management disciplines you must understand in order to succeed in the face of change. It introduces you to the critical distinction between decision-driven change and behavior-driven change, and describes how to manage each successfully.
  Chapter 11 concludes the book with a step-by-step design for building an outcomes management system in your organization. By using the design explained in Chapter 11 (as supplemented by the frameworks, tools, and techniques described throughout the book), you can ensure that your entire organization and everyone in it are managing for performance.

  Mindbook and Workbook Sections

  The challenge of setting and achieving performance goals differs dramatically today from what it was 30 years ago. Nevertheless, many of our deepest managerial instincts and practices were established in the 1950s and 1960s. You can rid yourself of this cumbersome heritage if you work to understand and use the concepts, frameworks, tools, and techniques in this book. To help you, I have included both explanatory Mindbook sections and practice Workbook sections in each chapter.

  Mindbook: In the Mindbook sections, you will find descriptions and explanations for key concepts, frameworks, tools, and techniques, as well as the specific obstacles and difficulties that get in the way of using them. The Mindbook sections seek to build your intellectual understanding of how to set and achieve the performance goals that matter.

  Workbook: The Workbook sections include exercises you and your colleagues can use to practice the concepts, frame-works, tools, and techniques. By using the Workbook exercises, you can convert understanding into action, and action into results.

  The Mindbook and Workbook sections will reward you most if you use them with specific reference to a particular performance challenge you currently face at work. This is not hard to do. All of you are contributing to many specific performance challenges. For example, as you read these words you might be contributing to a quality initiative. Or you might be implementing a new marketing strategy. Or you might be reengineering a critical process. Or you might be working with a strategic vendor or partner to explore more effective ways to collaborate. Or you might be developing plans for better serving one or more customers or customer segments. Or you might be designing and building information technology that will enable people in your organization to become much more effective.
  Take a moment right now and set forth one to five specific performance challenges that most concern you. Use the following space to write these down (in pencil!):

  As you read and use the Mindbook sections in this book, keep these specific challenges in mind. Importantly, make sure that you refer to these challenges when you and your colleagues do the exercises contained in the Workbook sections.
  This introduction started by describing this as a how-to book. It ends by claiming that Make Success Measurable is also a practical guidebook to thriving in today's fast-moving world. By learning to master the disciplines needed to set and achieve performance, you will guarantee yourself a lifetime of opportunity and achievement. The time has come for all of us to step out of the chaos of activity-based objectives, unconnected and poorly communicated initiatives that promote change for the sake of change, flavor-of-the-month fads, financial goals that are not balanced with concerns for customers and the people of the enterprise, and destructive we-versus-they attitudes and behaviors that build cynicism and despair. You don't need to be a victim of this disarray. Instead, you can lead yourself and others into a world of organization performance characterized by goals that are outcomes; goals that are clear, specific, and coordinated; and goals that drive you and others to learn the skills and disciplines needed for success that matters to customers, shareholders and funders, and yourselves. You only need to let measurable success and performance show you the way.