In this article, we take a look at the history of computing and propose that the next phase will be driven by customer demand for performance as a service, rather than Apps, or Software as a Service. We also take a look at the concept of performance management, including a brief overview of a performance management method known as Objectives and Key Results (OKRs)
- Performance as a service is the natural next step in the evolution of technology. Instead of buying hardware, software, apps or even software as a service, companies will buy business performance.
- For companies adopting performance management frameworks, a data driven approach, with full transparency and accountability is essential.
- OKRs is a great framework for performance management for high growth, data-driven companies with a clear mission.
A very brief history of computing
Mechanical computing – 1880s onwards
International Business Machines (IBM) traces its origins to the manufacture of mechanical counting machines in the late 19th century. These machines were entirely mechanical in nature, and highly customised.
Electronic computing – Late 1940s onwards
Manchester University’s “Baby”, or Small Scale Experimental Machine was probably the first to execute a software program in 1948. The program was written entirely in binary code.
Standardisation – 1960s onwards
Over time, through collaboration across academia, industry, and governmental bodies, hardware and software standards started to emerge, driving down manufacturing costs, aiding interoperability, and facilitating skills development and specialisation.
Packaged Applications – 1980s onwards
Beyond standardisation, in the late 80s, software would ship in shrink wrapped boxes on floppy disks and later CD-ROMs enabling users to quickly and easily install and start using a rapidly expanding number and variety of games, creative and productivity applications.
The Cloud – 1990s onwards
As the Internet gained traction in the 90s and early 00s, software could now be accessed remotely, via browser based user interfaces. With nothing to install, users could sign up to business services as easily as they had previously signed up to consumer internet services like AOL, Ebay, Google, and Hotmail. This became known as Software as a Service (yes, there were ASPs, and mainframes before the 90s, which could qualify as ‘Cloud’, but not in the mainstream).
Apps – 2007 onwards
Smartphones exceed the number of laptops and PCs in the world, and is increasingly the primary or only device used to access online services. Mobile applications, or Apps, are taking over from browser-based applications.
Performance as a service – 2016 onwards
With increasingly diverse and complex technology turning every industry and every corporate function upside down, at an accelerating pace, businesses respond by buying performance instead of technology solutions. Technology product and services providers respond by delivering performance as a service, and getting paid on that basis.
Three performance principles
The standard model of strategic planning operates on an annual cycle, with long term goals aligned to the company mission. In the past, with lack and lag of data, this may have been a reasonable approach. No longer. Businesses must adopt the following core principles to performance management:
The tools we use, whether in the cloud, smartphones or other connected devices, record thousands of data points about our behaviour every second of every day. Customer journeys are often entirely digital, with equal amounts of data generated. In our effort to become data driven, we must enable the following:
We should have access to all the data the business consumes or generates
We should be able to analyse all the data, regardless of source or type, as if it was all held in one giant spread sheet, to create meaningful and actionable insights.
Act on Data
Not content with simply generating pretty dashboards, we should act on our insights in a timely manner to drive optimal business performance.
Openness ensures that everyone knows what he or she and everyone else in the organisation are working towards. Transparency flows from the top down, starting with the CEO.
The flip side to transparency is accountability. With full transparency comes full accountability. When each team member is aware of his or her priorities, in the context of those of their managers, peers, and overall company mission, accountability comes naturally.
A new model for business performance
Objectives and Key Results (OKRs) were introduced by Andy Grove at Intel in the 1970s, and later at Google by investor John Doerr. OKRs allow a company to align everyone and everything around its mission to deliver superior performance.
OKRs are highly effective under these circumstances:
High Growth / High Change
You’re building the aeroplane while accelerating down the (short) runway. Pick your metaphor, but if this sounds familiar, then OKRs are for you. (The turn-around scenario is equally compelling; plane is in a downward spiral, and you need immediate and dramatic performance improvement to recover.)
You’re generating and consuming huge amounts of data, and you would describe your company as a data driven organisation. You have invested in a variety of analytics tools and you might have one or two data scientists on the team.
Whatever your stage of development, you know your purpose. Whether you’re setting out to disrupt one of these global monopolies, or if you’ve nailed your purpose like these 12 companies, you must be able to articulate what you’re doing, and why. Without purpose, OKRs will simply help you drift further afield and could even cause significant harm by rapidly taking you off course.
Gtmhub is a provider of business performance. Get started here.