One really interesting part of my job over the years has been to see how organizations report and discuss performance. Some organizations have very clear, concise scorecards or reports that they use as the basis for all performance discussions and business reviews. These are definitely the minority.
Most organizations--even those that have a pretty well-defined process for reporting and discussing performance--tend to use an ad-hoc "product" for these purposes (typically involving varying combinations of spreadsheets, reports from software packages, and department-specific PowerPoint decks). I've found that this wild and loose approach to presenting performance leads most organizations to think they are doing better than they actually are (especially if under-performing areas happen to be led by great presenters).
Let me explain by using an example. A very large health insurance company I was working with religiously tracked the total number of people that were members of their various plans. A “total membership” target was set by geographic region and a significant portion of management pay was tied to hitting these targets.
Every month, the leadership of each geographic area would present an in-depth PowerPoint presentation showing their performance for the preceding month. The first chart would always be total membership. The rest of the presentation would discuss various other performance issues for the unit. It was actually a pretty good performance review process. Each area had an allotted time, there was an agenda to review action items from previous meetings before presenting current performance, and there was ample time for Q&A.
But as I started going back through many months of PowerPoints for different units, a different picture began to emerge. (Put aside for a moment that it was very difficult to even find the historical PowerPoints.) It quickly became apparent that there was no standard template for what the presentations contained, other than that the first slide showed the total membership number. I noticed several trends:
- When the total membership number was met, the overall presentation was shorter (in number of pages) and the number of under-performing measures or objectives that were included in the presentation was larger.
- When the total membership number was not met, the presentation was longer and consisted of more pages showing “good news,” as if in an attempt to make up for the miss in the most important metric.
- Very often, a measure that was called out in a presentation as missing target or poorly performing would never appear in subsequent presentations (either to show that it had improved or was still under-performing).
- There was a core of about 25% of content that was somewhat consistent, but the other 75% of the presentation differed from month-to-month and unit-to-unit.
- Frequently, the scale of charts favored the message being delivered. That is, if a chart showed that a goal was missed, the scale of the chart tended to make the miss “look” small. If a target was exceeded, a different scale was used to make it “look” more impressive.
A little more poking around led to the astonishing finding that the combined work effort of all of the staff in the various geographic units involved in creating these presentations was many hundreds of hours per month. Even worse, it turned out that many of the new “members” helping to meet the critical front-page number were coming from low- (or no-) profit-margin plans, or even from new hires made within the company itself! Yet it was not at all obvious from the presentations that this was the case.
So what we had was many people spending hundreds and hundreds of hours to make a custom presentation every month that made their performance look as good as possible. Highlight the good, mention the bad, make the charts look as “good” as possible, and then forget about it. Senior management could be influenced as much by showmanship and style of each presentation as by the actual underlying performance numbers.
There is a lesson here. Even the tightest business or performance review process is dependent on the "product" being used to conduct the review. That product can be PowerPoint, reports, spreadsheets, or a software package. What is important is that as much of the "product" is consistent month-to-month as is possible. If it’s a PowerPoint, this means using the same set of slides each month, reviewing the same important objectives and measures, using the same charts (with the same scales), as well as the same set of important strategic initiatives. If things are going well, flip past the slides and don’t focus on details; if not, spend some more time in review. But don’t allow the presenter to create a fancy new dog-and-pony show from scratch each month that obscures reality.
At ActiveStrategy, we’ve always believed that using consistent software presentation vehicles: 1) make for a better business review and 2) save staff time. With our newly-released ActiveStrategy Enterprise 10 (ASE 10) we’ve introduced a new feature called ActiveView, which eliminates the problem I described above.
ActiveView allows any user to create a performance “presentation” deck, which can look however they want, with flexibility similar to PowerPoint. But unlike PowerPoint, an ActiveView links dynamically to live performance data that already exists in ASE 10, such as measures/KPIs, objectives, performance charts, etc. Every time you access the ActiveView, it automatically displays the most up-to-date information available. So you only need to create it once. You can print the entire presentation with a single button, or better yet use it directly in a performance review so you can click into any part for more in-depth information. Organizations save many hours each month creating presentations, they have consistency month-to-month, and they have immediate access to historical data and commentary. No more dog-and-pony shows.
Even if you don’t have a software package to support your business reviews, I’d strongly recommend getting started by establishing a consistent reporting process and using a consistent product.