My Kingdom for Missing a Nail is a favorite story that speaks to attention to detail. The tale tells of a king who falls during battle due to the bad shoe on his horse. For lack of a nail the horseshoe was lost, for lack of a horseshoe the horse was lost, for lack of a horse the king was lost, for lack of a king the battle was lost, for lack of a battle the kingdom was lost. Thus a kingdom for lack of a nail.
The attention to detail of performance monitoring is a day-to-day activity. Understanding how numbers drive performance is critical to the success of any trading system. The day to day works like the nail of a company and if it is not executed correctly the kingdom can and will be lost.
Let’s PERI is the vehicle that creates the Infrastructure for Success. The goal is to plan, execute, review and improve. PERI is flexible for daily, weekly, monthly or quarterly use.
Calendar
Planning is vital to any endeavor. As Steve Covey writes, start with the end in mind. What is the desired result? How much time to invest? What is the desired end date? This exercise allows managers and staff to align expectations by creating an environment of shared understanding rather than arguing about likes and dislikes. The manager sets the strategic parameters while the staff creates the tactical plan. Both parties have a say in creating the intellectual vision of how the execution will unfold.
Execution
The military maxim that no plan survives contact with the enemy is the guiding principle for execution. Once the planning is complete, set a date and boldly move forward. Train front-line employees to call an audible or make adjustments as circumstances warrant. Build freedom by training decision-making skills with a firm understanding of the mission. Management must accept aggressive errors. Creating a workforce that cannot move without management approval is a handicap in today’s fast-paced world.
Check
As Peter Drucker said, “Follow effective action with calm reflection. From calm reflection will come more effective action.” Small organizations pressured by today’s worries don’t spend time reviewing performance. Leaders are action-oriented and looking back is not a high priority. This is a critical bug. The process of reviewing the results against the forecast is essential. Understanding how the assumptions fared during execution will either validate the strategy or dictate the need for change. The dual approach is to understand whether tactical objectives are being accomplished at the speed, quality, and volume intended, and whether results appear as designed.
To improve
PERI’s driving force is continuous improvement. This requires enlightened leaders who maximize the potential of people and processes as master coaches. Regularly scheduled training sessions analyze performance deltas and create plans for corrective action. This process has a positive uplifting style that seeks to improve performance and confidence. Addressing performance issues early enables behavior changes that prevent problems from escalating and mistrust. Forecasts and assumptions are improved by methodically understanding how events occurred followed by refining models of high accuracy and integrity.
Benefits
The PERI cycle lays the foundation for capacity plans, performance scorecards, policies and procedures. Capture institutional knowledge, reduce attrition and drive peak performance. This process provides the data for the illustrated run. But data alone does not generate superior results. The second step channels the emotions of the workforce towards success by creating a culture of improvement.
