How do you define business performance?
Before we carry on, write down your definition of performance on a piece of paper.
Compare your definition with the one used in this training topic, are they similar?
Was it easy to define performance? Or did you struggle/give up?
What is business performance in your mind?
It sounds easy until you try and say what it is. This is one of the problems with measuring performance within a business.
How can you measure something if you can’t define it?
The is a definition in a book called Legacy. 15 things. The All Blacks can teach you about the business of life.
Legacy was written by a gentleman called James Kerr. In this book, the All Blacks defined performance quite succinctly.
And I’m going to share that definition with you here.
What do the All Blacks know about performance?
They are the most successful sporting team in the world, not just last year or last season or last decade. But since their inception, they have had an 87%-win ratio.
That is unheard of, unparalleled anywhere in professional sport and an amateur sport for that matter. However, most people would argue that All Blacks have always been professional.
It’s not a bad place to go to look for the definition of performance, because I think they know a little bit about it.
The All Blacks defined performance or more correctly James Kerr defined performance in his book Legacy as ability multiplied by behaviour.
The simplicity of that definition is mind-blowing. They can define performance so accurately.
Especially as Performance is a word we band around in so many contexts.
We talk about high-performance cars.
We talk about high-performance teams in business, we talk about the performance of an individual on an athlete.
We have key performance indicators, but do we truly understand what we mean by performance in each case?
This definition is probably my favourite.
Look up ‘Performance’ in the dictionary it is very difficult to come with a single definition.
This is why ability multiplied by behaviour is so special.
What is performance in business?
How can we define someone as high performing or a low performing?
We’ll use a team as an example. A group of individuals that come together to achieve a task, we could classify as a team.
If that team is high performing, it must be doing things better than the base level. Therefore, to classify performance, we need to have some sort of standard which we can use as a comparator.
This is where defining performance in the first place becomes a problem, especially in business terms.
How is an individual’s performance measured?
What is the standard? What is the norm?
Can what be considered normal now be applied across groups, teams, or other areas of your business, in the future is it fair to use past performance as the standard?
Where do you measure the performance of the business or parts of it?
Unless we have a clear definition and a clear comparator the term High Performing has no meaning. Let us examine the All Blacks definition, which is ability multiplied by behaviour, and let’s break that down into two parts. Ability and Behaviour.
Ability
If you think about sport, what the All Blacks are referring to here is, is the skillset of the individual.
But if we think about a role, or an individual in business, including yourself, what are you doing? What defines the ability of that person to do that role. It could be knowledge, skill, experience or it can be the qualifications that person has.
They all provide you with the ability to do the job.
So in business, and especially in, garages, I want to take ability a stage further, and I want to combine the words capability and ability together.
Capability in this context includes everything mentioned previously, so you could have someone with the right qualifications, the right experience, the right skills and the right knowledge.
So they have the ability to do a task. However, they don’t have the equipment or the business has not provided the correct equipment to allow that individual to fulfil that role.
For example
It could be as simple as do you have the correct socket to get a hub nut undone?
You might have all the other abilities, but if you don’t have the right socket, you don’t have the capability.
If an individual or the business is not performing as well as it could, what is the problem?
The ability of the people doing that work?
Or is it the capability within the business?
We can split ability into two Halves which is quite difficult when you first start thinking about performance. But it makes you aware that until you start looking at the exact task you are measuring, you are measuring the performance of not just the individual but the business as well.
Behaviour
What do we mean by behaviour?
If we have the ability and the capability how do, we go about the task? Are we sloppy or we do the task to the best of our ability/capability, or not do the task at all, that’s the worst case scenario.
Behaviour is how we do the task. Do we always do it the way we should do it, or do we do it another way or does everyone do it differently?
Therefore, you could say that the performance within a group, (for example your technicians). Could differ given that they all have the same ability and capability, but the actual performance of those individuals differs because of the behaviour of the individual, because they all do it differently.
Two mot testers might have slightly different routines. One does the MOT test more thoroughly but quicker than the less experienced tester, who has a slightly different routine, and tends to miss the odd thing. Because his routine isn’t as slick and he isn’t following one of my favourite words, a process for that task.
Therefore, behaviour is up to the individual.
Most people consider processes constrictive. They prevent expression and freedom.
However, having a process, which is continuously reviewed allows the individual to express what could be done better and it allows the whole team to benefit.
Processes allow the team to do the job better as an individual or as a group, because the improved process is then shared. That process, that behavior times the ability and capability becomes the standard. So I think the All Blacks definition works in a business context as well as in a sporting context.
How is performance measured in business?
I’ve mentioned them already. We use something called key performance indicators, sometimes known as KPIs.
That’s how we measure performance, by identifying key areas within the business and how they are performing compared to your comparators.
One of the things that we don’t, more often than not measure is how the business is performing compared to other businesses.
We talked last time about knowing your numbers, knowing your business, and while that is true, you know, your own business, but you don’t know how your business is performing against your industry norms.
Because when we talk about performance, if we haven’t got an industry norm (it is difficult to find out because we tend to operate our businesses in isolation) we don’t really often know if we’re doing better than anyone else.
What is the average for some of the key performance indicators within the independent automotive industry?
When we use the term performance in future, hopefully we have a definition for it and a firm idea of what standard we are comparing that performance with.