The Three Levels of Performance

Overview of the Three Levels of Performance


Everything in an organization’s internal and external “ecosystem” (customers, products and services, reward systems, technology, organization structure, and so on) is connected. We have found that the way to understand these connections is through the application of the systems view to the Three Levels of Performance.

The Organization Level emphasizes the organization’s relationship with its market and the basic “skeleton” of the major functions that comprise the organization. Variables at Level I that affect performance include strategies, organization wide goals and measures, organization structure, and deployment of resources (see Figure 3.1). The next set of critical variables affecting an organization’s performance is at what we call the Process Level. (see Figure 3.2) At this level, organization outputs are produced by processes. Processes, in turn, are performed and managed by individuals doing various jobs. If we increase the power of our x-ray, as in Figure 3.3, we can see this third Level of Performance, The Job/Performer Level ...

The Organization Level of Performance


An organization can be greater than the sum of its parts only if the whole organization is managed. An organization may have people with outstanding experiential and academic credentials. Its functions, such as marketing, production, and research, may look good when benchmarked against those departments in other companies. However, its results may be less than stellar because its executives manage functions and people without placing them in a larger organizational context. This practice is a prescription for suboptimization and a situation in which the whole equals less than the sum of its parts.

The best way we have found for understanding how an organization functions is to see it as an adaptive system. This view maintains that every organization operates as a processing system, which converts inputs (such as resources and customer orders) into outputs (products and services) that it provides to its customers. The systems view does not apply only to an entire company. If we look inside an organization, we see that it is made up of layer upon layer of systems ...

The Process Level of Performance


We have found the Process Level to be the least understood and least managed level of performance. Processes are rolling along (or, frequently, stumbling along) in organizations, whether we attend to them or not. We have two choices—we can ignore processes and hope that they do what we wish, or we can understand and manage them. We have proposed that the only way to truly understand the way work gets done is to view an organization horizontally (as a system) rather than vertically (as a hierarchy of functions). When you view an organization horizontally, you see business processes.

While the Organization Level provides a perspective, sets a direction, and points to areas of threat and opportunity, our experience strongly suggests that the Process Level is where the most substantive change usually needs to take place. A clear strategy and logical reporting relationships (Organization Level) and skilled, reinforced people (Job/Performer Level) cannot compensate for flawed business and management processes. An organization is only as effective as its processes ...

The Job/Performer Level of Performance


The Job/Performer Level is so named because it looks at jobs at all levels and at the people who serve in those jobs. At this level, we take the same systems view that we take at the Organization and Process Levels. We believe that performance can be improved only if jobs and people are examined in an overall performance context. The need for a systems perspective is best illustrated by an analysis of managers’ typical responses to people problems. Aside from the frequent response of ignoring the problem, the actions we see most often are:  train, transfer, threaten, discipline, or replace them. The common theme through all of these responses is them. Each action assumes that “them” is what’s broken, and therefore “them” is what needs to be fixed. 

Assuming that defective people are at the root of all performance problems is as illogical as assuming that a bad battery is at the root of all automobile malfunctions. While the battery may be at fault, a good mechanic realizes that it is part of an engine system. Even if the battery is performing inadequately, it may be because of another component; the root cause may lie elsewhere ...