When Exemplary Performance first started out we had a paper-based newsletter that we sent out to our clients and colleagues called The Exemplar. Several years ago we switched to an e-version and mail it out via email address. While we plan to continue our quarterly e-newsletter, we also wanted a way to have a dialogue and capture the multiple perspectives around execution optimization and human performance issues.
For our first article, I thought it would make sense to discuss the Potential to Improve Performance or PIP. It’s really about estimating return on investment prior to a project beginning. PIP was created by Tom Gilbert in his work Human Competence. We’ve seen it calculated several ways – but it’s always about the relationship between 1) the value of accomplishments resulting from a project or initiative to 2) the cost of producing those accomplishments. In a very straightforward way, if the cost of an initiative exceeds the value of the project results, you have a negative PIP and really should go no further.
We also find that calculating PIPs is a great way to prioritize initiatives. While other factors such as complexity and length of time to implement may have a bearing on which project to move forward with, the project with the highest PIP is a great way to discriminate when resources are limited to one project or initiative at a time. The PIP also provides a sound, results-based approach for evaluating the project at its conclusion.
This inaugural blog coincides with our new website launch. In the coming months we hope to add a simple PIP calculator with examples from different industries.