Performance Management & Strategy Execution Blog: The Glue

Strategy Execution vs. Performance Management Software: What You Should Know (Part 6: Data)

In my first 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. I've since talked about accountability (Part 2), driving action (Part 3), performance improvement (Part 4), and communication (part 5). This time it's all about data.

All types of Performance Management, Business Intelligence (BI), and Strategy Execution systems rely on data.

BI systems typically have a medium number of measures (up to many hundreds) that can be broken down in many ways – for example: sales by region, product, channel, customer, color, etc. BI systems are great for slicing and dicing data to find trends, problems, and possible inefficiencies.

BI systems are also great interfaces to large enterprise data warehouses. Enterprise data warehouses typically contain the most important business measures at the enterprise level. Data warehouse projects are notoriously expensive, take a long time to implement, and have a high failure rate. When successful, these projects give reliable access to key measures and a “single source of the truth.” BI systems are also commonly used to access data marts, which are smaller versions of warehouses that focus on one area – finance, for example.

ActiveStrategy Enterprise (ASE), which is a Strategy Execution system,  focuses not on collecting metrics per se, but on using metrics to drive accountability, action, and communication to deliver performance improvement. Data marts and warehouse metrics can definitely be useful contributors to ASE. Usually, however, only a small subset of the detailed data for any given metric will be required in ASE (where, again, the focus is on the actionable data). Take sales for example. Users of ASE might wish to drill down from top-level sales data to a low-level geographically, but at a higher level by channel.

The key is where the accountability lies. Strategy Execution systems should not be used to provide all of the data for everyone in an organization to analyze; BI systems are great for that. What a Strategy Execution system should do is link data to those elements of accountability, action, and performance improvement.

Strategy Execution vs. Performance Management Software: What You Should Know (Part 5 - Communication)

In my first 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. I've since talked about accountability (Part 2), driving action (Part 3), and performance improvement (Part 4). This time it's all about communication.

Sharing best practices can multiply the results from performance improvement activities.  Whatever technology you use should encourage and foster communication. Here are some ways that technology can help you do so:

1. By making each component of an organization’s strategy a named element with owners, accountability, and links to action, software can  provide a strong mechanism to communicate an organization’s strategy to all levels.
2. It should be easy for users to “invite” their coworkers to monitor their performance information without involving an administrator. The system should also support nested groups, so that complex “communities of practice” can be easily created and maintained by non-IT administrators. It should also be easy for communities of practice or cross-functional workgroups to create new scorecards of existing information from each of their areas.
3. A nice plus would be “starter packs” of measures that contain hundreds of industry specific standard measures of performance, quality, and compliance. These measures should include definition, source information, benchmarking guidance, and much more. 
4. Another important feature is support for self-service learning within the application. Users should be able to easily access multimedia application support, including short videos explaining the most common tasks within the application. This builds widespread adoption, which helps ensure that communication of strategic information isn't limited to a special group that's "in the know."

Since communication support is not a focus of most performance magagement vendors, you'll need to look carefully for these types of features, which truly support strategic change and long-term sustainability.