1. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. September 11, 2009 Kevin Buck and Michele Steinbach Applying Best Practices for Performance Management Improvement

2. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Agenda  Purpose of this briefing  The challenge: delivering on the strategic vision  Case study: the challenges for a federated Research and Development (R&D) enterprise  A performance management improvement decision framework  Case study: performance management recommendations  So why focus on performance management? 2

3. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Purpose 3 The purpose of this briefing is to describe how a government enterprise that is multi-faceted and multi-cultural can tailor and apply performance management principles to better manage their portfolios and achieve their vision.

4. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Delivering on the Strategic Vision  Federal agencies are under increasing pressure to demonstrate: –Delivery to stakeholders –A solid plan for achieving strategic goals  Articulating the strategic vision is not enough –Agency leaders must actively steer the enterprise toward its desired end-state  Moving from a description of the future to making that future a reality involves: –Mapping out the transition plan, –Executing that plan, and –Monitoring plan execution to ensure the enterprise arrives at the correct destination 4

5. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Case Study: Federated R&D Enterprise Key Performance Management Challenges  Limited span of direct performance control –Some aspects of the portfolio are directly within the financial control and authority of portfolio manager, while some aspects of the portfolio are not  Decentralized portfolio –The portfolio spans numerous organizational boundaries and performance management cultures  Constrained information flow –Information security requirements, the classified nature of specific data, and different cultures constrain information flow across the enterprise  Performance management resources are constrained  Numerous reporting requirements –Enterprise is subject to many performance-management related regulations and other compliance requirements  Effectiveness/efficiency of data collection/analysis systems 5

6. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Key Assumptions  Many government organizations wish to improve performance –Application of performance management techniques can improve performance  There is no “one size fits all” solution  Performance management solutions must be tailored to a government enterprise’s specific goals and circumstances  There are cost, risk, and benefit tradeoffs that must be considered in determining if, when, and how performance management improvements should be undertaken 6

7. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Purpose of a Performance Management Improvement Decision Framework  Framework objective: –Support performance improvement by reducing or eliminating challenges that will hinder the ability of a government enterprise to improve as effectively and efficiently as possible. 7  To achieve this objective, the framework links: –Performance to performance management –Improvement recommendations to a best-of-breed performance management process –Improvement recommendations to an enterprise’s specific goals and circumstances

8. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 8 Tailor Diagnose Diagnose: Compare improvement goals to current performance management maturity, challenges, and enablers Recommend Recommend: Identify customized recommendations and prioritize next steps Key Framework Elements

9. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 9 Why the Need to “Diagnose”?

10. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Diagnostic Elements

11. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 11 Sample Diagnostic – PM 3 In Aggregate

12. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 12 Sample Diagnostic – PM 3 Snapshot

13. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 13 Sample Diagnostic – Enablers/Challenges  Factor Group A: Enabling Environment –Factor 1: Commitment to improvement? –Factor 2: Organizational Politics? –Factor 3: Organizational Stability? –Factor 4: Communication?  Factor Group B: Management Resources –Factor 5: Skills/experience? –Factor 6: Organizational design? –Factor 7: Funds for managing? –Factor 8: Training opportunities?  Factor Group C: Tools/Techniques –Factor 9: Standardized taxonomy? –Factor 10: Application of decision-making techniques/analyses? –Factor 11: Application of management evaluation techniques? –Factor 12: Data collection/sharing systems?  Factor Group D: Processes/Practices –Factor 13: Structured processes for performance management? –Factor 14: Structured processes for performance and mgmt improvement? –Factor 15: Compliance with regulations and policies? –Factor 16: Application of benchmarking for improvement?

14. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Sample Diagnostic – Enablers/Challenges 14 * Adapted from R. Stevens, The MITRE Corp., “Systems Engineering in the Information Age: The Challenge of Mega-Systems”, 12Jan2005 Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6 Factor 7 Factor 8 Factor 9 Factor 10 Factor 11 Factor 12 Factor 13 Factor 14 Factor 15 Factor 16

15. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 15 Key Framework Elements - Recommendations Improvement Goals Identify “gotchas” to avoid Provide detailed guidance on adopting/implementing performance management process steps Identify techniques and tools to apply Identify how to communicate the need and value of performance management to stakeholders Determine how to align performance management efforts with Presidential direction and regulations Priorities ? ? ? ? ?

16. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 16 Key Framework Elements - Recommendations  Performance management process – Steps do indeed “fit most”, but … Where do I enter this process? Where should I focus attention and resources?

17. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Why focus on Performance Management?  Strategic Planning  Business/Operations Planning and Management  Financial Management and Budgeting  Cost Management  Risk Management  Transition Planning and Change Management  Investment Decision-Making Processes and Management  Innovation Management  Supply Chain Management  Performance Engineering  Human Capital Management  Enterprise Architecture and Systems Engineering 17 Performance Management Enterprise Management Portfolio Management Program/Project Management Acquisition Management Vision and Strategic Outcomes

18. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Managing Portfolio Performance Improvement We are here now X http://www.albrightstrategy.com/framework.html A good road map is dynamic and evolves over time as conditions change and new discoveries are made. Alternate paths must always be considered. Roadmap TypeCritical Activities “Know Why”“Know What”“Know How”“To Do” Technology Mission analysis Codify organizing logic for business processes and infrastructure (e.g., EA “as is”) Capabilities analysis Performance baselining and benchmarking Specify “To Be” environment Strategic planning Root cause analysis. Gap analysis (e.g., SWOT ) Dependencies analysis Portfolio analysis Functional analysis Systems engineering Performance analysis and engineering Transition planning Analysis of Alternatives Portfolio analysis and optimization Change management Investment management Portfolio management Acquisition management Resource management Process People Application or System Roadmap elements adapted from: X We need to be here by xx/yy/zz 18 PfM a key element

19. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Role of PfM: Managing the Transition 19 FUTURE STATE TODAY Goal: Invest in more experimental technologies for greater innovative opportunities; focus more on long- term needs. This is a “build” slide best viewed in slide show view

20. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 20 FUTURE STATE TODAY Enterprise Goals Technology Maturity Short TermLong Term Experimental Mature I I I I I I Baseline or Current State: Portfolio dominated by mature technologies and short-term focus Role of PfM: Managing the Transition This is a “build” slide best viewed in slide show view I = Investment

21. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 21 FUTURE STATE TODAY Interim State: Portfolio shifting toward longer-term focus, with higher-maturity technology still predominating. Enterprise Goals Technology Maturity Short TermLong Term Experimental Mature I I I I I I Role of PfM: Managing the Transition This is a “build” slide best viewed in slide show view I = Investment

22. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. 22 FUTURE STATE TODAY Enterprise Goals Technology Maturity Short TermLong Term Experimental Mature I I I I I I I End State: Investments concentrated in more experimental technologies supporting long-term enterprise goals. Role of PfM: Managing the Transition This is a “build” slide best viewed in slide show view I = Investment

23. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Time Resources Project Phases 1.Start up 2.Development 3.Implementation 4.Maintenance S D I M TodayFuture Many Few S I D IM RISK Role of PfM: Optimizing Across Multiple Dimensions  Investment timing  Prioritizing varying objectives, investment purposes, and stakeholder needs that may be unrelated or interdependent RISK 23 Capability Gap #1 Capability Gap #2 Capability Gap #5 Investment A Investment B Investment C Investment D Investment E Investment F Investment G Investment Z Stakeholders

24. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Case Study: Federated R&D Enterprise Adopt a Performance Management Philosophy  The portfolio delivers if the enterprise achieves outcomes and fulfills stakeholder needs within expected costs and schedule –Performance management involves people, processes, and technology that enable successful enterprise performance and its effective communication to stakeholders  Performance management success drivers:  Link performance measuring/monitoring to stakeholder needs and outcomes  Proactively focus on leading indicators of potential success/failure  Only measure/monitor what is important for characterizing progress in achieving outcomes and fulfilling stakeholder needs  Motivate desired performance by selecting measures that clearly signal what is important to the enterprise  Strike the right balance between qualitative/quantitative measures and among enterprise priorities 24

25. © 2009 The MITRE Corporation. All rights reserved Approved for Public Release. Case #09-3713. Summary  To achieve its goals, the enterprise must –Develop a sound strategy that supports stakeholder needs; –Create a roadmap that outlines the path toward its strategic goals; and, –Execute that roadmap, through sound application of portfolio and performance management principles and processes.  A performance management improvement decision framework can help the enterprise to tailor those processes to the organization’s strengths, weaknesses, resource constraints, and organizational enablers. 25