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), communication (part 5), and data (part 6). Today I'm going to address who should actually run this software in your organization.
If you're really going to drive a culture of performance using software, you need something that is simple enough to let the business users administer the system.
OK, that’s a scary statement to both business users and IT because we're talking about a system that almost everyone in the organization might use and whose content will change rapidly. If you're in IT, believe me you don’t want to be responsible to administer that system.
If you're a business user, you should be able to administer just your area of the system. Oh, and by the way -- when I talk about business users administering the system, I’m not talking about EVPs and CEOs doing it. Usually, it is a “power user” or business analyst-type person doing the hands-on job of creating new things and changing ownership wholesale. Users might do simpler things, like inviting other people to see their content.
The thing about this concept that freaks out IT people is that there is no “data quality control” inherent to the process if you let users run off willy nillly and do their own thing. While that's true, remember that accountability is a key part of Strategy Execution. If someone enters (or approves) data in the system, at some point they are going to have to explain and defend that data. Their name is right next to the data and they actually entered it or approved it. They should be the expert on that data. In a business review, they will be the one justifying performance based on that data. There is a very clear audit trail, not only on the data, but on the commentary. This provides a level of confidence in the data in the system. Sure, someone can intentionally misrepresent data or be lazy in making sure the numbers are right – but sooner or later they will be found out.
The first thing about user administration that freaks out the users themselves is the imagined workload of maintaining data in the system. They say “I want my people to focus on the business, not be data entry clerks.” Makes sense, but consider this: much of the data people are responsible for will only be important to them and may only be available to them.
In fact, you want measure owners to have a hands-on connection with the data so they are on top of what is going on. Think about what happens in many review meetings when looking at numbers on a report for the first time – the first question is often “can this be right?” But if a measure owner enters, or uploads, or approves his or her data before a business review, he or she should be pretty confident the data is correct and can focus on performance to improve it.
And it’s not just data that business users need to be able to enter. They need to be able to create new scorecards, measures, initiatives, and so on. They need to be able to reorganize metrics and change ownership. These things change very frequently. Again, the self-regulating nature of accountability and the business review will ensure a high level of confidence in the quality of the structure of the system. If you try to have IT administer all of the data and content in such a system, you will end up with an inflexible, dated system that will rapidly fall out of use and/or degrade into a somewhat limited reporting system.
Don’t get me wrong, IT has a very important role. You can and should automate “core” metrics that are common to many areas: finance, budget, HR, etc. But, the fact is you should not try to automate all of the leading measures – there will just be too many and they will be too specific to justify the effort. So, this distributed administration model offers the best of both worlds: IT can focus on automating core metrics and ensuring their quality; users can focus on finding the right leading measures that will drive performance.
If you need further convincing, consider a real life example. A large organization I’m familiar with has approximately 12,000 measures in their system. Now that seems like a lot but keep in mind that they have many thousands of users across just about every business function you could imagine. All of these users and metrics are spread across about 60 or so self-administering areas. Even if each of those administrative areas is spending 10 hours per month getting and loading the data from spreadsheets (which in many cases they would be doing anyway to make one-off reports and presentations), we are looking at under $500,000 in effort per year. A data warehouse with 12,000 measures might take years to build and millions of dollars. Worse, by the time it's done thousands of the measures would need to be changed. Looking at it that way, the old spreadsheet upload isn’t looking too bad.
In my next post, I’ll look at some of the features of software that enable distributed user administration.
If you'd like to hear about Balanced Scorecard measure fundamentals (definitions, target-setting, etc.), I'll be doing a webinar on the topic next Thursday (November 20th). You can see details and sign up at www.activestrategy.com/webinar
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