Performance Management & Strategy Execution Blog: The Glue

The Differences Between Functional or Departmental Scorecard Reviews and Breakthrough Scorecard Reviews

Recently I posted an article about the use of cross-functional breakthrough improvement scorecards to drive dramatic results in an organization. Breakthrough improvement scorecards exist in parallel with functional or departmental scorecards, but have slightly different purposes, which affects the skill levels required of the reviewers and reviewees, as well as the content of the monthly performance reviews of these scorecards.

Each breakthrough improvement scorecard is focused on dramatically improving one high level outcome measure, whereas functional scorecards exist to track a functional or departmental list of objectives, measures, targets, and initiatives that should be aligned to the strategic plan and that could be either breakthrough improvement focused, incremental improvement focused, or even daily control in nature. Also, no matter what is shown on the breakthrough scorecards, it must also exist on various functional scorecards because that is where it actually gets functionally reviewed, owned, and executed.

Because of these differences, the monthly reviews are slightly different for each type of scorecard and some of the required skills are different.

First, with functional scorecards one must ensure that the scorecard actually aligns upward to the scorecard at the next higher level. The real question here is “for all of the objectives, measures, targets, and initiatives on the boss’s scorecard, is the lower scorecard contributing to the ones that the boss thinks it should be contributing to?” Once that is agreed upon, then the monthly questions are:

• Is the data up to date?
• Are the targets stretch enough?
• Has the owner explained for any measures that are red; why they are red, what will be done about them, who owns those actions and when they will be completed?
• For any improvement initiatives, are they on schedule, on budget and really getting to the root cause?

For the breakthrough improvement scorecard, the questions are similar, but are more advanced and will require more data stratification and root cause analysis skills either known by both the reviewers and reviewees or, at least, available to them through process analysis experts. The questions now become:

• Has the senior team defined only 3 – 5 breakthrough improvement scorecards? (Any more at one time will dilute the focus and minimize the results)
• For each breakthrough improvement scorecard, has the data been properly stratified into the vital few drivers, thus identifying the most important underperforming leading measures that will be addressed with multiple improvement initiative teams?
• Is the data up to date?
• Are the targets stretch enough?
• Are there enough initiatives targeting this outcome measure to drive significant improvement in the aggregate?
•  For those improvement initiatives, are they on schedule and on budget
•  Which proven improvement initiative methodology will be used to identify, verify and eliminate the root causes?
•  During each monthly review, a review in detail of two or more of the process improvement initiatives should occur.

Finally, the breakthrough improvement scorecards are usually reviewed by the senior management team at their monthly meetings, while the functional reviews occur throughout the organization on a monthly basis prior to the breakthrough improvement scorecard reviews. This sequence ensures timely execution of the initiatives on the functional scorecards, which roll up to the breakthrough improvement scorecard.

Are you using any Breakthrough Improvement scorecards now? Tell me about how they're working (or let me know if you'd like some help getting one started).

           

Strategy Execution vs. Performance Management Software: What You Should Know (Part 8: Making Distributed Administration Possible)

Here's another installment in my long series on this topic. For those of you who haven't been following this thread, here's a quick recap. 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), data (part 6), and I last talked about who should actually run this software in your organization (part 7).

For a system to become pervasive means it needs to be in every nook and cranny of an enterprise with tens or hundreds of thousands of users. Today, only email is universally pervasive. For a Strategy Execution system to become pervasive it needs to be managed and administered by those who use it.  No central authority, IT or otherwise, can manage the constant and immense change such a system demands.

The need for distributed management is difficult for people to come to grips with. One helpful analogy might be a centralized project management system. Hundreds of project managers in a large company maintain thousands of projects. If IT had to make changes to each of those project plans and update tasks, it would be a nightmare. Nothing would get done and/or it would be hugely expensive. My view is that Strategy Execution software is in this same category that MUST be administered by users.

Here is a list of software capabilities you should look for to enable distributed non-technical administration of the system:

• Availability as a hosted system or software as a service (alternatively, you could outsource just the “technical” server-level support to your IT department)
• Easy manual data entry with notification and grouped entry. If I have to enter data for three measures each month, make it easy on me. Send me an email telling me it's due, with a link to the screen where I enter it. Group all of my data entries on one page so I can do it quickly.
• Easy spreadsheet upload. OK, I’m the department business analyst. I’ve got most of this data already. Make it easy for me to get my data into a spreadsheet format and load one or a few spreadsheets a month to load all of my department’s metrics.
• Enterprise-level integration. You will want to automate some data feeds. If you have a rich data warehouse, you should take advantage of it. The product you choose should also have a robust enterprise-level extract and load tool for mapping external data to measures in the system. At the least it needs to support data bases (SQL) and files. Support for newer “service oriented architecture” calls are a big plus.
• Wherever that data comes from (upload at the department level, integration with other systems, someone else manually entered it) the owner should have a chance to review and approve it before it is published into the system.
• Easy-to-create and edit measures. If you're someone who has the skills to add two columns on a spreadsheet, you should also be able to create a measure in a Strategy Execution system.
• Easy-to-create scorecards, objectives, goals, initiatives, etc. Similarly, non-IT users need to be able to create and edit all of these objects without a ton of training.
• Strong security, but with overrides. Users should be able to “invite” others to at least see their content without going back to ask someone else to make it possible.
• The ability to copy or clone objects. Need a copy of that scorecard for the other four regions that weren’t interested last month? Users should be able to copy from existing objects without IT support.
• Easy-to-create reporting metaphors. Users should be able to quickly create dashboards, briefing books (to support business reviews), and other use-case based displays. A general purpose reporting engine screams for IT involvement.
• Each group of users should be able to administer their own “sandbox” without affecting others.  They shouldn’t even see the content of other groups (unless they have been granted permission).  A top-level administrator should control the rights of a distributed group administrator. Again, it needs to be easy enough for a savvy business user to manage.
• Even with all of the above, the training required can’t tear users away from their "real jobs" for too long. An hour or two for a simple user. Half a day for a power user. Maybe a day for an administrator.

It is important to point out that even if users administer their system, someone still has to manage the servers, databases, network, and other underlying technology of the system. This can be an internal IT function, or you can find a vendor offering a SaaS (Software as a Service) option.

I hope these ideas help you think about your own organization and how you'd like to use a Strategy Execution software package to automate Balanced Scorecards, dashboards, performance improvement, and more. I'd love to hear your feedback from previous experience or questions about how this works that I didn't address.

Next, I'll turn my attention to some more advanced features that organizations find themselves needing as they conquer more detailed aspects of Strategy Execution.

Obama's New Chief Performance Officer

The appointment of Nancy Killefer as the new administration’s Chief Performance Officer heralds exciting times for performance management professionals. We have leadership that understands what we can do and wants it done.

You many have noticed that Ms. Killefer has managed the D.C. office of McKinsey & Co. consulting, home of the “McKinsey Method.”  The firm has built a wildly successful practice segmenting data to find the 20% of the causes that produce 80% of the problems. 

ActiveStrategy clients are familiar with this approach; our methodologies and software support a process of drilling down from high-level measures to aligned lower-level contributors, then using performance improvement techniques to identify and solve the critical few root causes (as identified on a Pareto chart) of performance issues. .

I am thrilled that the good government practices we advocate -- a concise focused strategy, key performance indicators, business reviews, and "Lean" practices -- may become the norm for our sector. Spread the word among your network of colleagues in different governments that this is all good news. These approaches will help us all serve people better (the reason we got into public service in the first place).  Be free with your advice and encouragement. 

Performance Management Professionals will have an important and satisfying role in “Change.”

Governments Using Scorecards Role Model Transparency for the Stimulus Package

A poll released this week and publicized in U.S. News & World Reports shows that 94% of respondents support national spending on infrastructure improvements. They even indicated that they would support a 1% tax increase to pay the bill. All good news, as the Obama stimulus package is being formulated. $750 billion plus may be pumped into our communities bridges, roads, and school buildings. The most surprising poll result is that more than half of the respondents said that either accountability or transparency of the projects were the most important consideration in how the money will be spent.

A “balanced scorecard” would be a great means of delivering results from the stimulus package, as well as accountability and transparency. Objectives and key performance indicators could be created for schedule compliance (getting jobs created fast will be an important element of the program); the number of jobs created; full compliance with ethics and disclosure processes; and projects’ ability to promote the CO2 reduction agenda. If local governments already using scorecards role model how results, accountability and transparency can all be accomplished using the tool, the administration may come to require the approach of all players. Why not meet the “customers'" requirements of being effective, efficient, and honest?

When the Emperor Doesn’t Want to Listen

In all of my experience implementing Strategy Execution frameworks, the most perplexing and frustrating challenge is when someone that I'll call an ‘Emperor’ within an organization doesn’t want to listen.

Though I call them Emperors, these individuals are often not the very top leaders; in fact, they are usually one or two levels down, but they hold tremendous power over critical operations.  They tend to be highly intelligent and generally 'know a bit’ about every management methodology ever devised.

Often, others in the organization fear these people, which creates a vicious cycle where direct information flow slows down or ceases, which leads to more misunderstandings, distance, and fear.

These problems reveal themselves to me when such individuals refuse to support a Strategy Execution change process that I'm trying to help drive. Their refusal is almost never due to not being able to appreciate the methodology or a failure to understand its benefits. What I typically see is that because of the fear and poor communication, these Emperors have become insulated from the Strategy Execution effort's ‘guiding coalition.’ They haven't take part in the educational process, and those around them have a hard time telling the Emperor, "You need to take the time to understand this process." This reinforces the insulation. The longer this goes on, the more the Emperor fights or disrupts the change effort, the more distorted the perception becomes of what the methodology is doing, and the more challenging the overall implementation becomes.

So, what to do? It's simple...and yet challenging.

Have courage.

You have to walk in and tell the Emperor that someone forgot to "dress him," metaphorically speaking. Focus on the educational aspects of what you are trying to achieve. Insist that he take the time.

When I’ve summoned my courage and taken these plunges, something positive has almost always happened. The disruptive Emperor has become my biggest ally. What I find interesting is that people like this tend to appreciate the display of courage and respond well to straight talk.

When this doesn’t work, that’s when I talk to the top leader. Sometimes, a change in the team is required. But it’s always better to try to get everyone on the train than to start off by throwing people under it. It's only through a change coalition and united leadership that Strategy Execution can be realized.