Performance Management & Strategy Execution Blog: The Glue

In Support of Evidence-Based Management

Even if you’re not in the healthcare industry, you’ve most likely heard of “evidence-based medicine,” which basically boils down to the idea that hospitals and physicians should always use approaches that have been proven (using scientific methods) to be the most effective.

Of course you want your own doctor to use the best evidence-based approach possible when caring for you or a loved one. In fact, you'd probably think your doctor was crazy to treat you without such methods.

Shouldn't the same hold true for business? Why is it that so many managers and leaders today still work off of a few favorite financial or operational reports and make decisions based mostly on gut or instinct? Why don't more leaders use an “Evidence-Based Management” (EBMgt) approach in their decision making? EBMgt is about making decisions based on facts rather than conventional wisdom, history, ideology, or assumptions. 

The book Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management (by Jeffrey Pfeffer and Robert I. Sutton) makes a strong case for an EBMgt approach. In separate chapters, they consider such half-truths as "work is fundamentally different from the rest of life and should be," "the best organizations have the best people," "strategy is destiny," "change or die," and "great leaders are in control of their companies."

It’s surprising that with all of the available information out there, the analytics, and the business intelligence tools, that more organizations don’t operate with an evidence-based mindset. Maybe it’s because some organizations lack the foundations that let them work within this approach.

What are those foundations? I think there are four key building blocks that enable an EBMgt approach to executing strategy:

1. A solid performance management methodology and program:   It could be a balanced scorecard approach, maybe combined with lean six sigma, a Baldrige model, PDCA, etc. -  whatever it is, there needs to be a consistent, repeatable process with effective tools and a high level of visibility. Having the data is one thing; acting upon it to achieve results is another.
2.  A culture of accountability: Leadership needs to create a “common line of sight”  so that individuals understand how their performance impacts the top level strategic initiatives.
3. An effective knowledge management program: Companies need to make sure they are not creating silos -- electronic or otherwise; they need to develop structures and processes for knowledge transfer for effective reuse, awareness, and learning.
4. Effective Business Reviews:  This last building block gets to the heart of the matter with EBMgt. This is where the proverbial rubber meets the road. Regularly discussing measure data and initiative updates with the responsible associates (the “owners”) enhances accountability, drives action, and leads to results.

Does your organization use an EBMgt approach?  If so, what do you see as the key factors for its success? In my next blog in this series, I’ll go into further detail regarding these building blocks and how a disciplined scorecard and review approach supports EBMgt.

Prioritizing and Managing Improvement Initiatives: 4 Steps That Drive Results

Even if you have the best strategic planning process in the world, plus well-defined, cascaded, aligned scorecards, and are  holding regular performance reviews of those scorecards, the fact is you won't see the improvements you want unless you also have the right improvement initiatives being executed in a timely fashion.

I probably can't find a single person who disagrees with this statement, so why is it so hard to find organizations that handle initiatives effectively?

Maybe it's because no organizations are perfect and therefore, they always have more areas to improve than they have resources to do it. Or maybe it's because employees really care and want to improve their organizations, but just truly don't have enough time to do so. Or, maybe management is just overambitious.

Whatever the cause, it seems almost universally true that organizations attempt  more initiatives than they have resources to work on and the results are nearly always underwhelming.

What's different within the few companies that are exceptions to this rule -- those that successfully manage their improvement initiatives and turn in results year after year? Here's a four-step approach that works wonders:

1. Prioritize by sequencing
2. Ensure the right scope, schedule, expectations, and restrictions by using a charter
3. Manage the initiatives carefully across a number of factors
4. Ensure accountability with ongoing reviews

Keep Your Strategy from Becoming a "Dusty Deliverable"

The slightly warmer weather here in Denver has me thinking of spring...and spring cleaning.  Ever do any “spring cleaning” in your office? Well, here's something to think about when you're taking a critical look at the contents of your bookshelves or filing cabinets: do you have any "Dusty Deliverables?"

This rather colorful phrase was mentioned by Anne McCune, SVP at Ingenix Consulting, when she and I were recently discussing  strategy execution.

I bet you have at least one Dusty Deliverable (DD) within eyesight right now. It could be an impressive 3-ring binder you brought home from a leadership retreat or strategic planning session, or maybe it's a glossy multi-page recommended action plan you received from a consultant. At the time, it held so much promise, but now it's just sitting there. Taking up space on your shelf.

So what turned yesterday's gem into today's DD? Did it contain bad ideas?  Was it foiled by bad timing? Probably not. Failed strategic efforts can almost never be blamed on a lack of creativity, energy, intentions, or insight. Time and again these efforts fail because of poor execution and little or no accountability  (read about the biggest culprits in my previous post: Top 10 Reasons Strategies Fail to be Executed).

What steps have you taken to make sure that this year's plans don’t become Dusty Deliverables? If the answer is "nothing," you might as well save yourself the time and skip the planning from now on!!

Using Spreadsheets for Performance Management: Why They Work and Why They Don’t - Part 5 (Data Collection)

It's been a few months, but I'd like to continue my series on the pros and cons of using Excel spreadsheets for performance management. In my last post in this series, I talked about how Excel is good for housing data but not good at supporting the actions that drive results.

This time, I'm going to discuss why Excel fails when it comes to data collection.

Okay, I know you spreadsheet fanatics out there (you know who you are) are getting all riled up. “But you can import .csv (comma separated values) files into Excel. You can pull in data from ODBC (relational) sources.” True, you can do those things. The operative word is YOU.

The fact is, if you are trying to collect data, say for a management scorecard, from many different sources and many different people, Excel stinks. Just imagine trying to collect data that needs to get into one Excel scorecard every month -- from 20 different people. They're probably each going to send you an email with their separate spreadsheets and leave it up to you to cut and paste it into the scorecard. Sounds like fun.

Or they could each go into the scorecard spreadsheet and enter their data themselves. Except whenever one person is in the file, nobody else can edit and save it. But they can open it as a read only version and save it with a different name. And they will. And you will have a mess. People will inevitably enter data in the wrong places and they will overwrite your carefully constructed cell calculations.

The mess and aggravation of using Excel to collect and maintain performance data from many sources increases exponentially as the number of people and sources increase. There is a better way, as we will see at the end of this series. (Want to skip ahead to the answers at the back? Check out a webinar that I recently conducted on this topic: request the recording here).

It might be hard to believe, but though I'm already on part 5 of this series, there are still some problems with using Excel for performance management that I haven’t discussed. Next time, I'll tackle the issue of accountability.

In the meantime, tell me if you agree or disagree with me on this one. If you're one of those spreadsheet fanatics I mentioned and think you've solved these issues, I want to hear your perspective.

A Common Line of Sight

Why do some companies struggle to keep their associates engaged? Why do some associates lose momentum with their initiatives? Many times, it's because they lacked what Root Learning calls a “common line of sight." Jim Haudan, CEO of Root Learning and author of “The Art of Engagement” states:

A line of sight is all about creating a clear, consistent business language that everyone can understand, think in, and speak. The issue of language is extremely important…A true line of sight is a simplified translation of the business strategy into a language that is relevant to everyone.

How do you create a common line of sight for your staff? What tools do you use? Along with strong leadership, effective communication, and scorecards, associates who understand where they are going and why will be more engaged. Associates who see how their contributions and initiatives impact the company's scorecards will be better able to describe and discuss your company's strategy.

The folks from Root Learning will be presenting at the upcoming ActiveStrategy Client Conference at the end of April. To learn more about why you should attend, check out our previous blog entry. Click here for more information about our conference agenda.

Hope to see you there!