(warning, this blog post has reference to Angry Birds and kind of assumes you've played the game; if not, you should try ;-)
Performance management is traditionally about monitoring numbers, having early warning systems put in place and being ready to act if any of these numbers falls 'out of line'
For example, if you need to increase cost performance, you would identify the factors causing the costs (of course) and then analyze what elements and actions can drive these costs down - i.e. handling 7 objects per hour instead of handling 5 would reduce time and hence labor costs
You would then measure what further actions needed to be taken to enable for handling the 7 objects and meticulously measure and report on the progress towards these goals - this is the thought of 'speeding up the conveyor belt'
But if you measure everything, and put the development of your business in numbers towards the desired target, do you not miss out on innovation?
And is innovation and creative market adaptation not required in an ever-changing and increasingly complex business environment - in this view, does the performance management not become an obstacle to reach the numbers instead of a stable road to success?
Performance management is a very effective tool to run organizations in a low-complexity environment, but to secure success in complex surroundings, it is necessary to create room for creative thinking and thus innovation
It should, therefore, seem like an obvious point that performance management (call it 'business as usual') and innovation should coexist - but how?
I call it Angry Bird Tactics - or 'do something else'
I believe you need to nurture the creative minds and thoughts of all of your employees - while you need to run the organization by numbers - and hence utilize the ideas of performance management - you should also motivate the teams to think creatively, 'out of the box' and constantly challenge them to come up with creative ideas on how to improve towards the set business targets
Think of Angry Birds and when you get stuck playing one of the levels - you send the birds flying against the Pigs over and over again - and still you cannot beat the level
Try to rethink the level - send the first bird somewhere completely else than where you've been sending him the first 10 times - and repeat with the other birds and now something is happening; you're breaking down new structures and you'll get a new view on how to beat the level
And suddenly you're through the level
You should try the same in your organization; challenge what everybody is doing today - ask them to do their routines differently (either for real or 'what would happen if')
See what happens, understand the mechanics of the work of your teams and see what happens when you shake it up - this is the way you open up for rethinking and innovation
And suddenly you've combined everyday management with innovation