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Measuring Performance in the Adaptive Enterprise

by Deborah Hartmann Preuss on Aug 09, 2006 |

In his Cutter Executive Report "An Adaptive Performance Management System", Jim Highsmith quotes Jeremy Hope and Robin Fraser on the subject of traditional budgetting:

Budgets have ... been hijacked by a generation of financial engineers that have used them as remote control devices to "manage by the numbers." They have turned budgets into fixed performance contracts that force managers at all levels to commit to delivering specified financial outcomes, even though many of the variables underpinning those outcomes are beyond their control.
-- Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap

Highsmith, Director of Cutter Consortium's Agile Project Management practice, identifies three measurement ideas critical to creating an adaptive organization, and then goes on to propose an alternative system for measuring performance:

We must acknowledge that our performance measurement system impacts agility.
We must alter our obsession with time to become an obsession for customer value.
We must separate the project performance management system from the team performance management system.

InfoQ.com offers readers a free pdf of the Executive Summary of An Adaptive Performance Management System, Jim Highsmith's Cutter Executive Report. As a bonus: the report includes a free 4-week trial of Cutter's Agile Project Management E-Mail Advisor, designed to help management take Agile from the project level to the enterprise level.

Cutter Consortium's Agile Project Management practice provides information and guidance to help organizations transition (or make the decision to transition) to agile methods, addressing subjects like: collaboration, governance, and metrics and agile practices.