Performance Management & Strategy Execution Blog: The Glue

Strategy Execution vs. Performance Management Software: What You Should Know (Part 2 - Accountability)

In my previous post on this topic, I explained my basic premise that there are major differences between Strategy Execution software and the broader category of Performance Management software and why I believe that only Strategy Execution software really helps an organization become more performance-focused.

In the next handful of posts, I'll be highlighting specific software capabilities that I believe are key to supporting this sort of transformation. I hope these will help you if you're looking at software now, or if you're trying to determine if your current solution will get you where you want to go.

In this post, I'll talk about specific software features you should look for if you want to instill accountability in your organization - one very critical step toward building a performance-oriented culture.

Ensuring that leaders and employees are accountable for business results is not primarily a technology issue. However, both the Strategy Execution methodology and related software must be designed to help nurture and facilitate personal and organizational accountability for real change to occur.

How Hospital Scorecards Change Before, During, and After Improvement

During each stage of an organization's improvement journey, the discussion changes and therefore their Balanced Scorecard content/structure changes.

• Before improvement you look for root cause.
• During improvement you verify that suggested remedies fix the problem.
• After improvement you sustain the gains you've achieved.

Take for example a hospital with poor performance in the medication reconciliation component of their patient safety composite.  That would appear on your top level scorecard as the lagging measure "Accurately and Completely Reconcile Medications Across Continuum of Care" which is the Joint Commission's National Patient Safety Goal 8A.

Scorecard Structure Prior to Improvement:  the first action will be to charter a project team to look into root causes and suggested remedies.  The scorecard should show three things at this point:

• The Lagging Measure: "Percent of Medications Accurately and Completely Reconciled Across Continuum of Care."
• The Dimensional Drill Down Measures: Break down the lagging measure by the same unit of measure across your departments to see if the problem is systemic or exists in just a few areas.
• The New Initiative: You want to get a status on the timing, budget, and resources right away and make sure your team gets to root causes as quickly as possible. They might follow the PDCA, Test of Change, CAP, RPI, or even Lean Six Sigma project methodology to do so.

Achieving Sarbox Compliance with Dashboard Software

Many public corporations have spent millions of dollars over the past few years building processes and automated software tools to track key measures needed to prove compliance with the Sarbanes-Oxley Act (“Sarbox”). But what if this critical information could instead be managed using the same strategic dashboard tool that you use to execute your overarching business strategies?

This is, in fact, what some clients have done, using dashboards designed and managed by their Finance departments. Rather than representing a truly “balanced” scorecard (as is more typical for our clients), these dashboard focus on areas of strategic importance to this one functional area in the company. And one area of intense focus for publicly held companies is clearly Sarbox compliance.

In some ways, these KPI (key performance indicator) dashboards can represent a cascade of the corporation’s top-level scorecards –- and they provide tremendous additional value in supporting this key financial reporting responsibility. They are used to track areas of Sarbox compliance such as “Percentage of Balance Sheet Accounts Reconciled by Deadline,” “Dollar Value of Balance Sheet Non-Current Reconciling Items,” and “Number of High-Risk Internal Audit Comments.”

Performance Management Forum for State/Local Governments

For anyone in State/Local Government interested in Performance Management, there is a free breakfast forum taking place this Friday, August 8th in Philadelphia. This is also open to any non-profit organization wishing to learn about these topics.

The focus of the forum is "Sustaining Performance During the Good Times and the Bad" and will include an impressive line-up of panelists whom you'll be able to query about best practices and ideas for overcoming challenges, even as budgets are getting squeezed.

The panelists are:

• Jeff Friedman, Deputy Director of Performance Management, City of Philadelphia, PA
• Steve Marchand, Mayor, Portsmouth, NH
• Mark Freeman, Performance Management Coordinator, City of Columbus, OH
• Chris Heflin, formerly with the City of Coral Springs (2007 Baldrige Winner) and now heading up ActiveStrategy's Public Sector Consulting Practice

The event is taking place at the Sofitel Hotel in downtown Philly. It's just a few blocks from the 30th Street Train station. Breakfast is at 8:00 am and the forum will wrap up by 11:30.

See more about the event and the topics on the agenda at the Performance Institute website.

If you're within a short drive (or train ride) from Philadelphia and would like to attend, email ward@performanceweb.org to rsvp. Though the event is no charge for Government employees, you do need to rsvp.

The Overthinking Paradox

I was sitting with a senior executive the other day who has been quite opposed to the implementation of a strategy execution system, when I suddenly realized why she has been so reluctant.

First, let me explain that she's incredibly brilliant, very experienced, and tempered by the realities of her industry. So, when we sat down to start brainstorming potential measures for their top-level scorecard, she became very twisted in mental conundrums and frustrated when asked to identify possible customer-focused measurements.

Here are the issues she was struggling with:

1. We should be defining the actual outcomes to which their organization contributes. But they only play a contributing role to the outcomes -- so why measure them? Most will remain unachieved, making them meaningless.
2. We should be defining key outputs. But, again, many needed outputs were not capable of being measured due to external forces resisting such measurement (think of this organization as an internal support/staff division with a line division that won't cooperate).
3. The top-level strategic goals are illogical and thus impossible to align to. They produce products and services that individually impact all of the strategic goals, so artificially categorizing them is only for external political/public consumption and not helpful to her.
4. Management 'knows' how things are going, so why waste time counting things when that time could be spent on producing products.

Top 10 Reasons Strategies Fail To Be Executed

Why do our best laid plans so often go awry?

Turning strategy into reality is never easy -- which is compounded when that strategy is up against an existing, strong culture or status quo. While there is no perfect, fool-proof model for implementing strategy effectively, there are some common pitfalls that can be avoided to get yourself on the right path.

Here are the top reasons why strategic implementations fail:

1. The goal is not clear
High-level, "pie in the sky" goals won't resonate with staff. Goals need to connect staff and leaders to their “purpose.”  To do so, look at the F.O.R. --  what is the “frame of reference” for your team, department, and overall organization? For the teams, remember that one person’s ceiling is another person’s floor, so goals must always be communicated in a way that accommodates each individual's F.O.R. Can the staff understand the “why” behind its pursuit?

2. The goal doesn’t create a “call to action”
Does the stated goal create yawns? Or is it something that staff and leaders can rally behind? Top-level goals need be aligned with the mission, vision, and values of the organization and should provoke passion, as well as a common belief that reaching the goal will create tremendous value for the organization, the community, and/or the staff.

3. The so-called "strategic" goals turn into a long grocery list
Years ago, I was the director of business development for a rehab hospital. The CEO had me assemble a “book” of all of our goals and initiatives. Unfortunately, we had way too many goals, no true focus, and we stumbled trying to do it all. Prioritizing is the key -- focus on a select few and tackle them really well. Then, and only then, move the next most important goals onto your list.

4. The plan does not "tune into" WIIFM
I once worked with a physician executive consultant who told me that physicians’ favorite radio station is WIIFM  -- “what’s in it for me?”  If a strategic plan does not connect to personal/professional goals and have meaning to the work-lives of the staff, they won’t commit. Be sure to "tune in to the station" and be able to tell everyone what is in it for them.