Performance Management & Strategy Execution Blog: The Glue

Rounding for Excellence - Part 2 (Communication and Documentation)

The goal of my last post was to make the case for hospital hourly rounding as a strategy for increasing patient and staff satisfaction, reducing patient injuries, saving nursing time, and saving hospitals significant amounts of money. Over the next few posts, I'll discuss the biggest challenges hospitals typically encounter when they attempt to put an hourly rounding program in place.

Of course implementing any organization-wide program is difficult, because these types of efforts require training a large cross-section of staff and providing support and follow-up to be certain that the change occurs. And implementing hourly rounding is even more challenging than many other changes because it affects the basic workflow of nursing. Through much study of these challenges and many discussions with nurse leaders, I've found that the primary challenges to successful hourly rounding programs can be grouped into these areas:

1. Communication
2. Documentation
3. Accountability
4. Sustaining the process
5. Using outputs from the process to make meaningful improvements in patient care

I'll go into a bit more detail on the first two of these areas this time (and discuss how many hospitals are addressing or eliminating the obstacles with help from a combination of technology and related process guides).

Communication

Effective communication about the new hourly rounding process is critical, including thorough discussions around the expected benefits for patients, families, and staff. Nurses need to understand both why they are being asked to change their daily processes and how to integrate hourly rounding into their current workflow so that the program is not perceived as added work. As with any large-scale change, hospital leaders--and especially nurse leaders--must be fully committed to the change and must express their commitment through their involvement in the communication efforts.

The most powerful way that nurse leaders can communicate the importance of hourly rounds is to conduct their own daily patient rounds. Through daily patient rounds, nurse leaders verify that hourly rounding is occurring through both discussions with the patients about hourly rounds and by ensuring that the care boards reflect that hourly rounds have occurred. In addition to reinforcing with staff nurses that patient rounds are essential, daily patient rounds enable nurse leaders to identify staff who deserve recognition for exceptional performance, as well as those that may need additional coaching.

A comprehensive automated rounding solution, such as the iRound Patient Satisfaction Solution, which includes a mobile data collection tool that can automatically populate interactive dashboard-style reports, as well as services that support sustained improvement, can help hospitals ensure that the right communication is happening on an ongoing basis. iRound PSS tracks rates of direct report rounding, nurse leader and executive rounding, and recognition on dashboard reports--all automatically and without requiring any transcription or consolidation of data. Not only do these reports track rounding activity, but they can also help demonstrate to staff exactly how their efforts in hourly rounding are affecting patient care outcomes, which can be a critical aspect of fostering ongoing support for the program. 

Documentation

Tracking and reporting on nurse leader rounds is essential for demonstrating rounding compliance, identifying recurring performance issues or trends, and managing follow-up. Unfortunately, tracking nurse leader rounds on paper (or even using a workstation-on-wheels application) is difficult to the point of being unworkable. The added effort of managing the paper, transcribing the data, and creating rounding reports is simply not feasible in most hospital units. In fact, when rounding programs fail—or fail to demonstrate results—the most common cause is the hospital's inability to systematically track and report on daily rounds (which verify that hourly rounding is occurring).

With iRound PSS, each round is conducted using an iPad, iPod touch, or iPhone, which takes less than a minute, on average. Each round is automatically recorded, with no additional data entry or transcription time required and no need to compile and format data in Excel or other tools to create reports. It's easy for nurse leaders to change which questions are displayed on any iRound form, so valuable insight into the patient experience can be gathered during nurse leader rounding to support patient care excellence. If a change has been made within one unit or on one floor based on patient input, for example, nurse leaders may easily add a question that only displays for rounders in that area, enabling the change to be tested and improvement verified.

This puts control of the rounding program into the hands of nurse leaders, while eliminating such non-value-added activities as data transcription, proofreading, and report creation. It similarly simplifies direct report rounding, recognition, service recovery issue management, and many other aspects of a rounding program.

Next time, I'll take a look at some other typical challenges and discuss how automation can help hospitals overcome them.

Master Showmanship or Truly Great Performance Results?

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. 

How to Organize Your Initiatives to Drive More Effective Improvement

When we started ActiveStrategy more than 11 years ago, we based our new solutions on the knowledge we'd acquired over many years deploying performance excellence and strategy execution frameworks in the real world. This practical experience taught us that the software we were developing (to help make these frameworks easier to deploy successfully) had to have rich support for monitoring and encouraging the actions people take to drive performance.

So, from version 1.0 of our software through today, we’ve led the industry in support for tracking tasks and projects to make sure that all of the actions needed to get results are front and center when our clients use ActiveStrategy Enterprise (ASE) to run a business review. (As an aside, it still amazes me that, even today, some so-called “performance management” software packages have little or no way to truly track and manage actions.)

Because of how critical initiatives and actions are to driving performance results, I want to share some insights into some of the ways our clients are having particular success using ASE to manage them.

One way is by using "phases" in ASE, which let users group and manage large numbers of initiatives (which some clients relabel as "projects") according to various factors or attributes, such as the responsible department, the quarter in which the initiative is occurring, or type of project. I'll explain more on phases in a bit, but I first want to explain some of the more fundamental ways we handle projects in ASE.

Initiatives in ASE can have their own lower-level tasks and milestones, allowing you to get quite granular with project management. And you can group multiple initiatives and tasks together into what we call "program groups."

Initiatives and program groups display (among other attributes) owners, current status (at several levels), and status reports. They can all also be linked to measures, objectives, and to each other (so you can create hierarchies of program groups with initiatives below them, and tasks below them).

By linking tasks to initiatives, and initiatives to program groups, and then creating additional higher-level "parent" program groups, clients are capturing the status of hundreds (and in some cases thousands) of important projects that are being worked on throughout the organization. 

But wait a moment. You might be thinking (if you're already familiar with ASE) that since ASE is a strategic management system, you should really just be using it to track the most important top-level strategic projects. To that I'd say yes...and no.  Yes, you need to track the highest-level strategic initiatives and have your top management team review their progress on an ongoing basis. But no, that isn’t enough. The real value of any Strategy or Performance Management system is to drive accountability, transparency, and (most importantly) regular business reviews down to the people who actually do the work, so cascading initiatives is a critical piece.

Let’s take an example. A large government agency client of ours has about a dozen main strategic initiatives (to get a sense of scale here, many of these initiatives approach a billion dollars in funding).  These are the 12 things that the leader of the agency reviews on a regular basis. But in preparing to report the status of each of those 12 top-level initiatives, the owner of each has to review the status of 20-40 sub-projects that drive each initiative. Each of the owners of those projects, similarly, needs to monitor the status of one project across many regions and several other contributing projects. And so on, and so on, and so on.

In a standard “Balanced Scorecard” model, these projects at the top level would (and should) be linked to the objectives (and, through association) to the measures they would drive. But once you get past the top few levels, it gets very difficult to meaningfully cascade objectives and measures down really deep into the organization. 

But cascading the initiatives and child initiatives down many levels is much more practical--and meaningful. This actually does make it straightforward to link the actions of tens of thousands of people with those 12 top-level initiatives.

And by using  ASE's “phases,” it’s easy to review progress during a business review, even though the projects may now involve thousands of people.

Here's how. In ASE, phases are more or less just "buckets" that you can use to group initiatives or program groups within a parent program group. You can have as many phases as you want, and you can call them whatever you want.

In the example above, each top-level program group might break all of the initiatives and program groups into the following phases: Cost Savings, Outreach, Effectiveness, and Efficiency. Thus, rather than working one-by-one through the status of 20-40 sub-projects during a business review, our client can examine and discuss how they are doing on projects within each specific area. In this case, phases allow for a logical grouping of actions that make the business review much easier.

Now let's consider a large corporate client. They have more than a hundred Balanced Scorecards throughout the organization (some are more "balanced" than others, depending on where they are). There are about a thousand initiatives being tracked, each dutifully linked to the objective it drives. When they are doing a business review of a particular business unit, they can review each initiative in turn with related objectives on the scorecard. 

But what if I’m the CIO and I only want to review my IT projects ? What if I’m the head of marketing?  Or the person in charge of compliance? It would be pretty difficult to find all of the initiatives I’m responsible for across the entire organization (because they are all linked to the cross-functional objectives). How can I quickly get a feel for the status of the activities related specifically to my group?

No problem! We can quickly create program groups that link to those IT, or marketing, or compliance projects and group them into their own view. Now don’t forget that they are STILL linked to their respective objectives, but we can also view them separately as part of a phase. 

In IT, the groupings might be by development phase: ideation, requirements, development, QA, production.  In Compliance they might be by area: federal securities law, affiliate rules, antitrust, environmental, political, and facilities management.

By creating the right hierarchy of initiatives and program groups and using phases to further group them into categories that make sense to specific leaders, we can make it possible to quickly and easily monitor the status of hundreds (or more) initiatives in a business area that are important to driving results throughout other areas of the organization. 

The best part is that with ASE your business users can easily do all of this linking, grouping, initiative/program group creation...without needing any help from IT.

I welcome your comments on how you're handling initiatives today and thoughts on whether phases and program groups could help.

Gartner's Predictions for Scorecard & Strategy Management Software

Gartner recently published a report on software solutions for Scorecards and Strategy Management. While the vendor coverage was pretty thin (though positive on ActiveStrategy, incidentally), I was interested in some of the broader survey results.

According to this report, about 30% of respondent companies are using an automated solution for strategy management and another more than 45% are planning on implementing a system in the next 12-24 months.  Those are huge numbers and would indicate a coming increase in demand for performance management experts (both internal and external) to help create all of those strategy maps and scorecards, train people in methodology, help with culture change, and implement sound business review practices.

If you are someone involved in deploying Scorecards and Performance Management (which is probably fair to assume if you're reading this blog), and these numbers are right, you are probably going to be in much greater demand in the near future...especially given the statistic in the same report that 50% of Balanced Scorecard/Performance Management efforts fail. More on that next time.

The Fastest Deployment of an Automated Balanced Scorecard Framework I’ve Ever Seen

I very recently helped a client fully deploy an automated balanced scorecard framework from start to finish within just two months. The client has their scorecards built, data loaded, they’re holding effective business reviews across the organization using the framework, and they are self-sufficient moving forward. 

You're probably thinking: "But this is impossible! Many organizations implementing scorecards/ performance management don’t get that far in a year." Really? Just ask Seven Hills Foundation.

So what’s their secret?  They weren’t small (they have 3,000 employees), they weren’t simple (they provide services to 28,000 individuals with disabilities and life challenges through programming at 150 locations), they didn’t have any more extra free time than any other client (Seven Hills was right in the middle of budgeting season).  But Seven Hills did have what I'll call all 5 keys to a rapid, successful deployment:

1. Availability – just scheduling time with project participants (from executive users, to decision makers on strategic content, to data experts) can often take weeks.  But in Seven Hills’ case, they were ready to meet the day the contract was signed and management had made it clear that participants should prioritize time over other items.

2. Skills and Authority – those learning about the software had the skill set to absorb the information, those learning about the methodology had the skill set to appreciate the concepts, and those making decisions on content and direction were given the authority to make those decisions.

3. Scope that Mattered – the client chose to build the first scorecards for affiliates (businesses) that had a burning need immediately.  As an example, one affiliate team needed the automated scorecard solution to score highly on their 3 year CARF accreditation coming up in a matter of months (CARF is an accreditor of health and human services providers).  Though the drill down in some measures was very deep (i.e. thousands of measures), the total number of scorecard-level measures was low -- they focused on what was pressing.
   
4. Content Ready to Go - this client had already picked the measures they wanted to see.  More than that, they had understood what the measures meant, where the data was coming from, and had approval from management to set targets and ownership.
   
5. Reviews – with the scope focused on what was pressing and scorecard teams that had a reason for using the scorecards immediately, we worked quickly to create views and variance reporting that would immediately suit their workflow and live use needs.  The day the scorecard was complete, the affiliate teams were using their scorecards in business reviews and locking in the software skills they had learned.

The result? Seven Hills was reaping benefits from their automated scorecards starting on day 1. Watch for updates on their impressive story soon.

Did You Miss the "Admin Track" at the ActiveStrategy Client Conference?

Our Client Conferences typically feature a range of case studies delivered by the executives, business leaders, and scorecard owners from our clients. This year for the first time, we added a new option, splitting ActiveStrategy Enterprise software administrators into their own dedicated track. It was so popular that we could barely fit in our breakout room, but that didn't stop us from having some great idea sharing and cooperative thinking.

We invited the client scorecard administrators in attendance to present mini case studies. What a great line-up. Here were some of the highlights:

Miami-Dade County shared how their Office of Strategic Business Management guides the agenda, tone, and logistics for hundreds of monthly department and cross-functional scorecard business reviews.  Also exciting was their ability to re-sequence the cascading of strategic objectives ahead of department budget allocation.

Thomas Jefferson University Hospitals demonstrated how they load large amounts of data (everything from finance to satisfaction) within minutes into ActiveStrategy from both structured and extremely unstructured data sources. Also highlighted was how they use project portfolio functionality to implement and sustain Six Sigma efforts at the health system.

Westinghouse Nuclear Services showcased a creative solution for a visually attractive navigation system, allowing executive users to easily find their scorecards, dashboards, and project portfolios using Visual Map functionality.

NATO recapped how they tackled business reviews of the command's very large program of work (POW) using Program Group Portfolio Reports.  Participants then brainstormed NATO-like job titles for themselves (the "Supreme Director of Strategy Management" was a popular pick).

U.S. Department of Veterans Affairs highlighted their approach for cascading strategic objectives throughout the Chief Business Office through the creative use of cascading matrix tools and naming conventions.

If you'd like to learn more about these topics and the presentations, please post a comment below and I'd be happy to get you more details. If you'd like to read an overview of the Executive Track, see this post.

 

Reflections from ActiveStrategy's 2010 Client Conference

What do you get when you bring together numerous knowledge seeking, high performing leaders from the likes of NATO, Jefferson Health System, the Department of Veterans Affairs, and Westinghouse (just to name a few) to discuss performance management, effective measurement, and strategy execution?

You get an event that inspires attendees to raise the bar at their own organizations -- a few days that create a buzz of motivational energy and introspective questions like: What can I do as a leader to help raise our level of performance? What if we were to structure our performance management tools that way? What if we added better measures and more accountability to our approach?

Our recent Client Conference provided a venue that aroused these types of thoughts and many more. If you missed it, here are some highlights and reflections.

The event featured a mix of leaders from client organizations describing their performance management efforts, challenges they've faced, ways they've overcome them, the roles that leaders play in creating a culture of performance, how ActiveStrategy performance management software supports their efforts, and many other topics.

Meanwhile, ActiveStrategy software administrators shared more technical ideas and showcased best practices in a first-of-its-kind dedicated track. You can read a recap of that track in this post.

We also made two product-related announcements of note. One is the official release of iRound,    
which is a new addition to our mobile applications. Two years ago we introduced ActiveStrategy Mobile, which allows you to view your ActiveStrategy scorecards and performance metrics from an iPhone or iPod Touch. This new application, iRound, takes it from another angle, letting you easily collect almost any kind of data -- such as survey information, photos from physical inspections of stores or facilities, checklists from on-site compliance visits -- on an iPhone, iPad, or iPod Touch. The collected data can be wirelessly uploaded, automatically rolled-up, and be presented as part of a dashboard, briefing book, or other presentation view within ActiveStrategy Enterprise. One healthcare client is already conducting physical plant rounds using this application and we found lots of ideas in the Client Conference audience for other applications in manufacturing, government, and retail.

We also announced the launch of a brand new blog, AS Insights, which will focus entirely on tips and tricks related to ActiveStrategy performance management software. Here at The Glue, we'll keep focusing on the methodologies related to performance management and strategy execution. If you're a current ASE user or are thinking about performance management software, please visit AS Insights and subscribe to receive email updates while you're there! 

What I always find remarkable about getting our clients together is how themes resonate across all types of organizations -- from healthcare to government to nuclear services. It's highly energizing when you get so many people together who are all passionate about improving organizational performance. In fact one leader from a military organization actually described it as the most inspiring day he'd had in his professional career.

Of the various presentations, there were several that really hit home for a number of the attendees. From a performance management leadership perspective, it was evident that successful organizations have executive leaders that 1) create shared meaning, 2) promote ownership of the whole, and 3) create a common line of sight (read more about that concept in this post).

If course it's hard to summarize the knowledge sharing and the key takeaways from this event into one nice package; but if I had to, I would borrow from the presentation made by Ron Burd at the end of the second day. Ron is the EVP, Strategy & Organizational Development at Thomas Jefferson University Hospitals. Ron's high-level advice was:

1. Make sure your mission, vision, and values are aligned  (and that they are driven by the CEO and C-suite members)
2. Select your metrics carefully
3. Have initiatives that will move the metrics
4. Use a system that will utilize and sustain the measures and the initiatives

As with any significant program or change management endeavor, leadership plays an absolutely essential role in getting it started, and making sure it's sustainable. Just as important, as we saw in the presentations and discussions from our client leaders, are the approaches and having the right tools.

We hope you'll join us for our 2011 Conference next spring. Watch for a "save the date" later this year.

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.

ActiveStrategy Enterprise -- an Aspirin for Organizational Performance?

Some things are good for you in so many ways, you feel like a fool if you don’t use them. Aspirin, for instance, is good for your headache, can save you during a heart attack, may reduce the risk of certain cancers, and may even help prevent cataracts. Exercise is another great example. It helps your health, your looks, your disposition, and gives you a hobby. Now here's one you probably didn't know about: ActiveStrategy Enterprise (ASE) performance management software. Really!!

O.K., I know. It sounds like a stretch, but bear with me while I explain.

I recently assisted an organization with their application for a state-level Baldrige-based award. The organization has well deployed scorecards in ASE and they conduct regular Business Reviews within the software, drilling into the scorecards to discuss performance and root causes of problems. They will get Baldrige points in the “Leadership” category for establishing and maintaining a systematic approach to moving the organization toward their vision (see illustration depicting Baldrige categories below) . And they'll get big points in “Strategic Planning” for having a well defined approach to planning and plan deployment.

They use customer input to refine their metrics, and so will “score” in the “Customer Focus” category.  Don’t get me started on “Measurement and Knowledge Management.” ASE provides accessible data on everything that is critical to performance and is a one-stop-shop for finding and sharing success stories and methodologies that "all hands" should be aware of. 

As for the required use of comparison data and benchmarks, ASE keeps it in view and part of on-going analysis of operations. Even if you don’t use the “Personal Goals Management” feature of ASE (which enables employee-level scorecards), you still get a lot of the "Workforce Focus" that Baldrige requires by making it easy for everyone to see how projects affect the big picture.

Using Spreadsheets for Performance Management: Why They Work and Why They Don’t - Part 4: Driving Action

If you’ve been following my previous posts in this series…and also know me and/or ActiveStrategy, you may have been wondering: Why is he praising Excel? Wasn’t ActiveStrategy created to replace Excel and other manual tools for performance management?

Yes, that’s true. And it’s also true that Excel is a great tool for the specific reasons and applications I blogged about.

But if you’re really trying to drive results at an enterprise level – trying to achieve the strategic outcomes your organization needs (and who isn’t?) – Excel is simply the wrong tool for that job. When it comes to performance management, Excel has a tendency to lead you down a swirling rat hole of bad data and missed opportunities, or help you build a performance management framework that will collapse under its own weight. I know. I’ve been there.

Why do I say this? Because although Excel is good with data, it is terrible for tracking action, ensuring accountability, and supporting a community of users that are trying to march together toward better performance and results.

Let’s first look at how Excel falls down when it comes to driving action.

As I’ve discussed before, data is only one ingredient for successful performance management. Another critical ingredient is action. The actions people take to learn why performance isn’t hitting targets. The actions people need to take to get performance back on track. Even the mundane actions people take to collect and report data and explain performance in one place. All of these actions are critical to improving rather than reporting results. And it is here that Excel begins to fall down.

Excel is, by its nature, a single file of data. You can open it and run some macros that do things, but in general it isn’t going to actively move people along to complete actions. For example:

• Excel won’t email a person and/or the boss when he/she needs to explain why a measure didn’t hit its target.
• Excel won’t capture the complete history of a portfolio of initiatives/strategic projects as they relate to the performance of a measure.
• Excel doesn't make it easy to capture action items during performance reviews or offer reminders and easy ways to follow up to make sure those action items get done.
• Excel doesn’t understand the organization’s reporting hierarchy, so it won’t provide managers with a simple view of what their teams are working on.

These are just a few examples -- some of which might be beyond what you're currently thinking about doing in a spreadsheet-based Scorecard or performance management framework. But support for these and other actions is critical if you really want to drive results. So here are some early warning signs that your performance management framework is starting to outgrow Excel:

• If you’ve started to think your single line “status” cells are not doing the trick, you are approaching the danger zone.
• If your users are adding a paragraph or two of explanation to a cell and making the spreadsheet unwieldy, you may be in trouble.
• If you are spending hours trying to format workbooks to print nicely, you are starting to feel the pain. 

Trying to create additional workbooks to hold longer explanations or to hold project milestones and status updates won’t solve the problem – it will make it worse. Maybe a very smart Excel administrator could overcome some of these problems. But, as you will see in my future posts, Excel's inability to drive action is only the tip of the iceberg.