How To Tell If Your Marketing Is Optimized For Performance
By Laura Patterson, President at VisionEdge Marketing
Frederick Winslow Taylor is credited with starting the Scientific Management movement. He and his associates studied how work was performed. They examined how the performance of work affected worker productivity. In his book, "The Principles of Scientific Management," published in 1911, Taylor discussed his philosophy based on the belief that making people work as hard as they could was not as efficient as optimizing the way the work was done. While a lot has happened in the past 100+ years, many of the performance management systems have remained fundamentally the same, despite the increased complexity of work and the volume of performance data.
Industry Trend: Forward-Looking Marketing Evaluation
Performance management practices are shifting from backward-looking, activity-based evaluations (how much work is delivered on time) to fact-based performance evaluations that link the work of marketers to their impact on the business. While this is a worthwhile shift, it only works if each person understands how their work ties directly to a business outcome. However, some experts in the organizational development field suggest that KPIs now actually account for less than 5% of how employee performance is evaluated.
Work by Ernest O'Boyle Jr. and Herman Aguinis concluded that the top five percent of workers in most companies outperform average workers by 400%! The sample curve emerging from this research suggests that 10-20% of employees, at most, make an outsized contribution. Cinching the link between performance and rewards such as autonomy, mastery, and purpose are more likely to motivate individuals to strive for excellence, build their capabilities, and stretch their skills.
Performance management uses performance measures and standards to achieve desired results. It is a forward-looking, continuous process. There are at least two elements needed to be successful at a performance-based approach to Marketing management.
1. You must set the right type of performance targets for every Marketing program. A performance target represents a commitment to achieve a specific and higher quality or level of performance, over a specified time frame. It is used to evaluate performance achieved compared to performance expected. Marketers that utilize performance management best practices intelligently set performance targets that are relevant to the organization's objectives and outcomes. Well-designed performance targets are:
- Tied directly to outcomes
- Clear and measurable
- Designed to improve results
Avoid inward-looking targets for Marketing. Inward-looking targets are where Marketing is answerable to their own organization while the outward looking targets are focused on how effective Marketing is finding, keeping and growing the value of customers and the business.
Marketing drives the demand-side of the business. Therefore, performance targets should reflect these aspects of Marketing. A performance target is about taking your performance to the next level. You want to set a target that demonstrates improvement but not one that sets you or your team up to fail. We suspect you're thinking everyone sets targets. Setting relevant performance targets is both art and science, and therefore challenging.
2. A method to track, measure, manage and report on performance. Someone on your team, ideally your Marketing Operations function, gathers the data needed to analyze the actual performance and construct actionable dashboards. These multi-level actionable dashboards must be able to drill down to the program level in order to report on each program's performance to the target. This is why it is essential for Marketing dashboards to be performance-based rather than operationally oriented. Performance tracking and measuring enables you to focus on those areas that determine your overall business success.
Performance measurement and target-setting are important to the growth process. The growth of your company and the growth of your people. When you put performance back into management you will know how the different areas of your business and your people are performing.
Want to learn more about setting relevant performance targets? Contact us for a complimentary 20 -minute conversation.