How Much Data Do You Need for Strategy Execution?

I love data. There I said it.  I’ve been building warehouse and big systems to move, load, report, compile, assemble, convert, and present data for most of my career. But I have come to learn that when implementing Strategy Execution, too much data can be worse than not enough.

One of the first questions that a Strategy Execution implementation team faces is: How much data will we need?

You really can’t answer this question unless you have been through a good round of strategic planning and have identified your strategic objectives, measures, and targets. 

Even then, you need to make sure your team and your sponsors understand the difference between scorecards, dashboards, and reports or you will be heading into trouble.  We once worked with a manufacturing client that wanted to build a Strategy Execution system, but  ended up with a 40,000 metric assembly line production reporting system. Fun, but not strategic.

So the answer to how much data you need is: it depends. The trick is to show enough data to illustrate how well the strategic objective is being met without including all of the detail on the strategic scorecards.

Of course the data is important, but you should be very selective about what gets shown in the Strategy Execution system or you will run the risk of burying the critical information under piles of data.

In my view, if I want to know why sales are under target in the southern region, I'd rather see the regional VP's explanation in a well analyzed variance report (plus see a few key strategic leading indicators, like trends on quote volume and converted leads for the region) than see all the product sales data broken out by zip code, product line, and sales channel for the region.

The point is, the southern regional VP already has that information (probably on a sales dashboard or report) and the value of a Strategy Execution system is pulling together the explanations and plans for improvement in one place where they can be easily monitored, accessed, discussed, and reviewed.

 

The alignment, focus, and accountability that come from a Strategy Execution approach are the main drivers of improvement. The best way to drive performance improvement in an organization is by focusing on a relatively small amount of data. Quality is better than quantity.

You also want to help your organization avoid using data as an excuse. I’ve heard many times that “we are waiting until the enterprise data warehouse is done” before implementing a Strategy Execution or Balanced Scorecard management system. What a shame.

Comments

[Jeff Bunting]

Clint, there are are two parts to your questions. The first is how to get executives to focus on management reporting that starts trickling out of an EDW before they want to jump right to replacing their legacy operational reports. I'd suggest you engage the Execs at the level of strategy - what are their key business objectives, what are the goals, who is responsible, and what is being done. If you first capabilities from the EDW effort can help answer those, you are in luck. But remember, there is a difference between management reporting and performance management.

The second part of your questions seems to be what a strategy execution system looks like. I'd suggest you look at the ActiveStrategy corporate site (www.activestrategy.com) and take a look at our approach to software implementation.

There are also some good free webinars that explain the concepts (like Balanced Scorecard 101) that really separate a Strategy Execution system from reporting.

Hope that helps.

[Clint M. Johnson]

I too am involved in building large-scale data warehouse systems. As a way to "deliver value early and often", we implemented our systems in an incremental fashion as they've come online. Because my client has not never had a comprehensive data warehouse solution, there is a "thirst" across every aspect of the organization for data. One of our current problems is getting the executives to focus on management reporting solutions (such as a strategy execution system) before before using our data to replace existing legacy operational reports. Any suggesions? Also, I would be very interested in seeing/understanding the components to your strategy execution system - is this a specialized area of your EDW tailored to support scorecarding? Is it a seperate system altogether that leverages your EDW data? Who led the iniative to gather those requirements and design the system? Any thoughts on how to demonstrate the power of data in this area would be very appreciated.