Performance Assessment

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Improving Your Digital Intelligence

  • Frontiers

  • Research Highlight
  • Read Time: 9 min 

A study of 250 global companies found that a company’s digital intelligence is informed by four dimensions: strategy, culture, organization, and capabilities. Within these dimensions, the research identified 18 management practices that contribute the most to digital leaders’ financial and market success — and offer a road map for companies seeking to expand their digital know-how.

When People Don’t Trust Algorithms

Even when faced with evidence that an algorithm will deliver better results than human judgment, we consistently choose to follow our own minds. Why? MIT Sloan Management Review editor in chief Paul Michelman sat down with the University of Chicago’s Berkeley Dietvorst to find out.

Building a Winning Business Model Portfolio

Many companies today are operating several business models at once. But despite the potential that business model diversification has for generating growth and profit, executives need to carefully assess the strategic contributions of each element of their business model portfolio.

I Come to Praise the Annual Performance Conversation, Not Further Bury It

  • Blog
  • Read Time: 3 min 

As many experts have noted, the annual performance review is rife with faults. It emphasizes what has already happened rather than shaping what is yet to come. It can feel punitive or at least judgmental. It is reductive and, in some cases, forces ridiculous formulaic comparisons between employees. It fails to emphasize the kind of timely feedback that can make a real difference in performance. And yet I have just scheduled year-end performance conversations with each of my direct reports.

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To Improve Cybersecurity, Think Like a Hacker

To protect their organizations from cyberthreats, companies need to understand how hackers go about their work. The authors’ research suggests that hackers’ attacks typically involve four steps: identifying vulnerabilities; scanning and testing; gaining access; and maintaining access.

A Three-Point Approach to Measuring Supply Chain Sustainability

A sustainable supply chain must operate within the limitations imposed by nature and society — but most approaches don’t explicitly take those into consideration. A new framework for supply chain sustainability assessment lays out eight key considerations organized into three categories: sustainability context, collaboration, and communication.

‘Moneyball’ for Professors?

While there’s a boom in using analytics for HR decisions, predictive analytics hasn’t yet made substantial inroads in the place of its birth: academia. Tenure decisions for the scholars of computer science, economics, and statistics — the pioneers of quantitative metrics and predictive analytics — are often insulated from these tools. Now research we conducted with Dimitris Bertsimas and Shachar Reichman finds that data-driven models can significantly improve tenure selections and predict future research success.

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Are Nonfinancial Metrics Good Leading Indicators of Future Financial Performance?

Although using nonfinancial metrics like customer satisfaction has become increasingly popular in assessing executive performance and determining compensation, the practice has some significant drawbacks. Not all metrics apply equally to all industries. Companies considering such metrics for strategic performance management frameworks should be mindful of the importance of knowing their strength as lead indicators and applying them appropriately.

Do You Know What Really Drives Your Business’s Performance?

Although intuitively appealing, strategy maps and models such as the service profit chain have a common pitfall: They encourage managers to embrace general assumptions about the drivers of financial performance that may not stand up to close scrutiny in their own organizations. A more rigorous analytic approach called performance topology mapping may help managers avoid these assumptions, as well as the strategic mistakes they promote.

Image courtesy of Flickr user chris riebschlager. https://www.flickr.com/photos/riebschlager/343600611

Beware the Winning Streak

  • Blog
  • Read Time: 2 min 

How well do people factor past performance into their expectations for the future? Not very. In one study, for instance, students playing darts who did well in the first round bet that they would beat the improvement goals of those who did worse. They generally were wrong: the better the participants’ score in the first round, the less likely they were to improve as much as other participants in the second.

Image courtesey of Quicken Loans Inc.

Embrace Your Ignorance

The overconfidence of presumed expertise is counterproductive. Instead, data trumps intuition. Serious innovators take data seriously, argues Michael Schrage: “Organizations may be confident they know their customers, but they’re very likely to be overconfident. Most executives aren’t nearly as smart, perceptive or customer-centric as they believe.” Successful innovators, he writes, “have the courage of their curiosity” and run experiments that challenge their assumptions.

What Businesses Can Learn From Sports Analytics

In professional sports, some teams are becoming sophisticated in using data to measure team and player performance, sports business and health and injury prevention. Sports teams’ use of analytics has much to teach other managers about alignment, performance improvement and business ecosystems. For instance, teams are beginning to assess performance in context, seeing how teams do with or without a particular player. This “plus/minus” analysis could be a valuable technique for many businesses as well.

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ThaiMyNguyen/iStock Editorial/Thinkstock

In Sports, It’s Quants Versus Managers

There have been a number of stunning sports upsets that make it clear that the lines are fading between intuition and experience on the one hand, and data and analytics on the other. Where the “gut” instinct of managers and owners once ruled, analytic insights are fast becoming a standard part of the playbook. What’s at stake? Seemingly everything: trophies, revenues, funding and fans, not to mention the sheer thrill of victory. That’s particularly the case in elite professional sports.

Analyzing Performance in Service Organizations

We can’t always trust our intuition about how employees will perform. Intuition can be misleading, or just plain wrong. So a growing number of savvy service businesses have investigated the use of a sophisticated linear programming technique called DEA, or data envelopment analysis. Authors H. David Sherman and Joe Zhu, who call DEA “balanced benchmarking,” write that the technique helps companies locate best practices not visible through other management methodologies.

Team GB: Using Analytics (and Intuition) to Improve Performance

Becoming an elite athlete — or coaching a team of this rarified breed — has as much to do with talent and skill as it does with experience and intuition (not to mention some serious hard work). And data is increasingly part of that mix at the highest echelon of sports: the Olympic Games. At Team GB analytics are used to both monitor the performance of athletes and to predict how well a team will perform. But what could the future hold? Evidence-based coaching — and training.

Image courtesy of Flickr user zoetnet.

Making Mergers Work

For organizations to achieve the psychological synergies required to realize economic synergies from mergers and acquisitions, executives need to attend to a more complex set of identity issues. These issues define the essence of the entity and give employees a clear answer to the question “Who are we?” and external stakeholders a clear answer to the question “Who are they?” Left unattended, these identity issues will diminish engagement and will affect the performance of the merged entity.

Showing 1-20 of 43