How to Develop An Action Plan For
Performance
Improvement
A journey of a thousand miles must begin with a single step.
Say you believe that the systems view of an organi-
zation represents the way work gets done. You are
determined to manage each component of the sys-
tem you manage. You agree that the tools at all
Three Levels of Performance should be at the heart
of any comprehensive effort to formulate and imple-
ment strategy, improve quality, productivity, cycle
time, and cost, and design an organization that
works. You have vowed to use the questions that
support each of the Nine Performance Variables as
the basis of your management system. However,
—Lao Tzu
you may feel a bit overwhelmed. At this point, your
primary question is most likely “How do I start?”
One way to begin is by initiating a Three Levels proj-
ect. Before there can be any widespread commit-
ment to the Three Levels as a way of life in an
organization, the approach must demonstrate its
worth. The best way to make a short-term contribu-
tion and to show long-term potential is by applying
the Three Levels tools to a strategic issue facing your
organization. The following steps represent an initial
Three Levels effort. They are stated in a way that
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should enable you to use them as the basis for
an action plan. Throughout the description,
“you” refers to the top team in the organization,
which can be the entire enterprise or any
meaningful component thereof.
Step 1: Organization Level
The way to start istodevelop astrategy for the busi-ness.
Developing strategy doesn’t necessarily mean
embarking on a six-month planning journey. It
may require only a couple of hours to confirm
and perhaps update your vision and direction. If
you and your colleagues haven’t reached
consensus on the answers to key questions, any
improvement effort runs the risk of being ill-
directed.
Once the strategy is clear and up-to-date, we
recommend conducting Phase Ø, Performance
Improvement Planning. During this effort, the
strategy and a “super-system” map help identify
one or more Critical Business Issues (CBIs),
which represent opportunities to establish a
competitive advantage or eliminate
a competitive disadvantage Phase Ø will also
help identify the process which, if improved, will
have the greatest impact on the highest-
priority CBI.
Although you should certainly start with
an opportunity with which you are comfortable,
we suggest that you resist the temptation to
pick an easy or minor issue just to see
whether the approach works. The Three
Levels tools can address an issue of any
complexity; as a matter of fact, they are most
helpful when an issue is multifaceted. The
approach will prove its worth only if it is applied
to an issue of significance.
Step 2: Process Level
Having identified a CBI and a process, we recom-
mend that you lead a Process Improvement
Project (PIP). A PIP begins with Phase 1, in which
you and others on the top team define the goals,
roles, and boundaries of the project. During Phase
2, which involves both senior management and
people who work in the process, the current
process will be documented and analyzed, the
future process will be designed (as radically as
dictated by the goals specified in Phase 1), and
measures will be developed. Detailed action
planning and implementation occur in Phase 3,
which includes action at all three Levels of
Performance.
Step 3: Job/Performer Level
A key aspect of Phase 3 involves the identification
of one or more jobs critical to the successful
implementation of the process improvements
designed during Step 2. For each job, have the
Process Team (along with job incumbents and
supervisors) describe the outputs and goals
required by the new process. Then ask the team
to identify the environmental support that must be
provided to the people in these jobs.
To display the outputs and goals, we recommend
that you use or Job Model format. To identify the
resources, feedback, rewards, and training that
should support the new job responsibilities we
suggest that you use our Human Performance
System questions.
This three-step process will enable the
participants and others to see the benefits of
addressing all Three Levels of Performance.
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They will work with some of the pivotal Three
Levels tools—the Relationship Map, the Process
Map, the Job Model, and the
Human Performance System questions. Most
important, they will resolve a critical issue
facing the organization and will create a
foundation upon which continuous improvement
can be built.
We don’t, however, want you to think that the
Three Levels can be used effectively only in a
“bundled” fashion. A second answer to “How do I
start?” is by applying one or two of the
Three Levels tools in a targeted application. In
addition to the more comprehensive projects
described earlier, organizations have
successfully applied individual Three Levels
tools in ways such as these:
• Relationship and Process Mapping were used to
realign an entire telecommunications company to
increase the focus on the customer.
• Relationship and Process Mapping were used to
strengthen and formalize the historical “hand-
shake” relationship between an electronics man-
ufacturer’s U.S. headquarters and a foreign
subsidiary, which is projected to quadruple its rev-
enues in three years.
• Relationship Maps were used in an aerospace
company’s orientation training to quickly show
new employees where they fit into the big picture.
• Organization, Process, and Job measures were
used in a paper mill to get everyone from the mill
manager to the machine operators rowing in the
same direction.
• Role/Responsibility Matrices and Job Models
were used to clarify the responsibilities of branch
managers in a consumer loan business and to
clarify the responsibilities of four levels of
management in a fourteen-hundred-store retail
organization.
• The Human Performance System was used by a
publishing company to diagnose and remove
some of the causes of high turnover among its
salespeople.
• Job Models and the Human Performance System
were used as the basis for the design of a per-
formance appraisal system in a government
agency.
Summary
Our files contain data on hundreds of performance
improvement projects spanning thirty years. They all
included applications of Three Levels tools, and they
ranged from the macro (establishing speedy cycle
time as a competitive advantage in an international
electronics company) to micro (improving the per-
formance of machine operators in a snack-food
manufacturing company). We continue to find new
ways in which all three categories of users—execu-
tives, managers, and analysts—are applying the
Three Levels as:
• A set of tools for diagnosing and eliminating de-
ficient performance
• An engine for continuously improving systems
that are performing adequately
• A road map for guiding an organization in a new
direction
• A blueprint for designing a new entity
However, Three Levels performance improvement
is more than issue-specific interventions. The tools
enable managers and individual contributors to
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bring about many of the culture changes that
are frequently discussed but rarely pursued
systematically. These culture changes include:
• Ensuring that a customer orientation drives
all activities
• Establishing accountability by objective
performance measurement
• Minimizing departmental conflicts
• Implementing a participative style of
management
• Creating a work environment that leads to
both better performance and a higher quality
of work life
We believe that any reader takes no more than a
handful of meaningful ideas or tools from even the
best of management books. In our opinion, the most
significant ideas we have presented are the following:
• Organizations behave as adaptive systems.
To effectively, nimbly, and proactively adapt
to the demands of a rapidly changing
environment, all system components—
inputs, processes, outputs, and
feedback—must be managed.
• An organization’s strategic and operational
effectiveness is the product of Three Levels of
Performance—the Organization Level, the
Process Level, and the Job/Performer
Level. As a result, every improvement effort
must be seen through the lens of the Three
Levels.
• The three Performance Needs that must be
met at each of the Three Levels are Goals,
Design, and Management. Failure to
manage the Nine Performance Variables is
failure to manage the business holistically.
• Cross-functional processes are particularly critical
to the quality, productivity, cycle time, and cost of
any business.
• Managing people should include addressing the
needs of all components of the Human Perform-
ance System in which they work.
• At each of the Three Levels, there are tools that
can help in documenting, analyzing, and improv-
ing performance.
We are performance improvement practitioners.
We are interested in a theory only if it helps us get
results. We have found that the Three Levels
framework provides us with a unifying theory of
performance improvement. More important, it has
led us to the tools we have described and
illustrated.
The challenges facing American companies,
a
rapidly changing market, higher quality standards,
increasing competition, shortages in critical
resources, and mind-boggling expansion of
technology have become the norm in almost all
sectors and all parts of the world. Traditional
solutions do not address this new reality.
The approach we have described in our books
does not represent a quick fix. We have never
experienced a tool that brings about
comprehensive, lasting organization change
without the investment we have described. The
Three Levels viewpoint will enable you to better
understand your organization and the variables
affecting its performance. With this understanding
as a foundation, you can use the Three Levels
technique to bring about top-to-bottom
performance improvement. We believe that the
challenge can be met.
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