Performance Management & Strategy Execution Blog: The Glue

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.

Using Spreadsheets for Performance Management: Why They Work and Why They Don’t - Part 3

Note: This is a new series in which I'll be discussing the pros and cons of using spreadsheet tools for performance management. See the intro/background post and part 2 (it's everywhere and it's easy).

Part 3: Pros – Excel is powerful and flexible.

Long ago, on my first day of my first job, I made a fool of myself. My new boss was describing some things I’d be doing and used the phrase “add new breaks to existing reports.” I asked what breaks were. He looked at me stunned and said “Good lord, haven’t you ever written a program?”

Well I had written lots of programs to get my degrees in Computer Science. But in school we wrote programs that did things. In the real world, most people wrote programs that generated reports. Sure there were tools to help, but creating a report basically meant writing a program to get, assemble, format, and print data.

Skip forward to today. Yes, lots of people still write programs to generate reports. But I’d bet most reports are made with Excel. That “break” the tripped me up is simply a column subtotal. Excel makes it easy to have any number of levels of subtotals. You can show all levels, pick your level, or drill though levels. You can automatically color code different summary levels. You can specify headers and footers.

Excel makes it easy to generate reports with nicely formatted data and charts. There are built in templates to get you started. You can create just about and chart you can thing of and tweak it’s colors, data points, legends, series labels, and on and on and on.

Mere mortals can even pull data from databases to generate reports. Heck, some people use Excel as a database. It works great for disciplined managers who can get a report exactly like the want it as well as for type of manager that changes what they want to look at every month.

Excel is also more powerful than most people think. If you are really adventurous (or crazy) you can have spreadsheets with 1,048,576 rows and 16,384 columns. That would give you enough cells to record the name of every person on earth. And the names of their pets.*

So Excel is a flexible, powerful reporting solution. Next time we will see that it is also an analysis tool. Then we will see how this ease of use, flexibility, and power induces an unwarranted sense of security for people trying to use it to really drive business results.

In the meantime, if you'd like a sneak peek into some of the challenges organizations face trying manage scorecards and dashboards in Excel, check out our "Top 10" list of signs your scorecards have outgrown Excel.

*(believe me, I did the math)

Scorecards in Government: How Carson City Went From "0 to 60" Fast

Join us this Wednesday, August 26th for a free webinar case study of one small government -- Carson City, NV, population 58,000 -- and their rapid implementation of scorecards, performance measures, and ActiveStrategy Enterprise software to automate the framework.

This session will be helpful for any public sector organization -- as well as other organizations with lean resources -- interested in "kick starting" a performance management and measurement effort.

The webinar runs from 2-3 pm Eastern Daylight Time this Wednesday (8/26). To register follow this link: https://www1.gotomeeting.com/register/685658001

Despite very limited resources, Carson City government has gone from having only a loosely defined strategy and a predominantly reactive culture -- to having a comprehensive top-level scorecard, several cascaded scorecards, and a total of almost 700 new performance metrics automated and reviewed in software -- all in less than one year.

During this webinar, you'll hear directly from Linda Ritter, the former City Manager who is managing this effort for Carson City as a special project. She’ll talk about why and how she got the effort started, who has been involved, and what results they’ve seen to date.

We’ll include time at the end of the session to answer your questions.

If you’re unable to attend the webinar live, but are interested in the topic, please register anyway. We’ll send you a link to view the recording after the webinar.

Upcoming Webinar: What To Do When Your Scorecards Outgrow Excel

Almost all organizations create their first scorecards in Excel and PowerPoint, but most tend to outgrow manual tools like these once performance management becomes more pervasive in their organizations.  Keeping track of, updating, and publishing multiple levels of cascaded scorecards simply becomes too labor intensive to manage with tools that weren’t designed for this critical job.

In this free webinar on Wednesday, July 22nd at 2pm EDT (11am PDT), you'll see ActiveStrategy Enterprise -- software that was designed explicitly to enable performance management. We’ll show how it automates KPIs, scorecards, dashboards, initiatives, trend charts, strategy maps, briefing books, and more – allowing you to focus on performance, rather than on manually gathering and updating scorecards.

Wyeth Pharmaceuticals is one organization that made the transition from manual scorecards to automated performance management using ActiveStrategy Enterprise. During this webinar, we’ll be conducting a live Q&A session with Wyeth Pharmaceutical’s Jennifer Peck about her organization’s use of ActiveStrategy software, which extends back to 2001. As the Senior Director, Strategy Management & Initiatives for Wyeth’s Global Clinical Team, she will discuss how ActiveStrategy Enterprise changed the way her team manages performance, how her team and Wyeth’s leaders use the software, and what value it brings to Wyeth.

We’ll also include time at the end of the session to answer your questions.

We hope you can join us for the webinar. If you’re unable to attend it live but are interested in the topic, please register anyway. We’ll send you a link to view the recording after the webinar.

If you'd like to see any of our previously recorded webinars, visit www.activestrategy.com/webinar

Using Spreadsheets for Performance Management: Why They Work and Why They Don’t - Part I

Note: This is a new series in which I'll be discussing the pros and cons of using spreadsheet tools for performance management.

Part 1: Background & History of the Spreadsheet

It’s hard to believe that spreadsheets weren’t always synonymous with Microsoft Excel. Before the 1980s, financial models were hand drawn and calculated on blackboards or cranked out on ledgers by armies of clerks using calculators.

VisiCalc, the first personal computer spreadsheet program, was developed in 1979. It was THE first “killer-app” for personal computers (and responsible for selling hundreds of thousands of Apple II machines).

Through the mid-1980s there was a mad rush of spreadsheet programs: SuperCalc, Microsoft MultiPlan, Lotus 1-2-3, Borland Quattro, Resolver, and many others. As it seems wont to be, Microsoft ended up the last contender standing.

True, a few stragglers remain on the market and there are strong open-source alternatives, but for most of us “spreadsheet” means “Excel.”

Not that there is anything wrong with that. Excel is an extraordinarily powerful program. If you are reading this blog, chances are that you have at least moderate Excel skills and are aware of some of its power.

Looking back over the last decade working with clients to improve performance and implement performance management systems, it’s very clear that the most frequently used tool in this space is Excel. By a huge margin. People use Excel to build dashboards, scorecards, reports, charts, graphs, briefing documents, and just about anything else you can imagine one might need in a performance management or measurement situation.

In this series of posts, I’ll discuss the pros and cons of using Excel for performance management as I see it. I’ll discuss some best practices and traps to avoid. Hopefully I'll end up providing a good overview of when it’s appropriate to use spreadsheets and when they just aren’t up to the task when it comes to managing organizational performance.

Webinar this Thursday -- "Government 2.0: Increase Transparency and Accountability with StimulusScorecard"

Join us this Thursday, June 25th at 2pm EDT for a free webinar on Government 2.0 and StimulusScorecard.

‘Government 2.0' involves using web tools to increase transparency and thus improve the effectiveness and openness of government. In this webinar, we’ll discuss a tool called ActiveStrategy StimulusScorecard, which enables governments to leverage the web to aid in strategic planning, performance management, and Stimulus reporting.

The first round of ARRA (Stimulus) reports are due October 10th, and require that a “full picture” of the projects be presented so that taxpayers have the ability to track and monitor how the funds are being spent. During the webinar, we’ll review the latest reporting requirements released by OMB and discuss why waiting to set up your reporting system until the full extent of requirements are published in August might create problems. StimulusScorecard is a Balanced Scorecard-based, centralized collection system for your Stimulus project data that you can use now to ensure that your programs stay on schedule and on budget and to track accountability for every stage of the work. And you can use the data you’ve collected to populate OMB’s reports when the time comes.

During a live demo of the application, we’ll show you example Stimulus project scorecards, as well as how to share your data with the public.

Presentation topics:
• Review of the latest Stimulus reporting requirements
• How a scorecard application makes data available for preemptive action on emerging problems
• How technology can keep critical data part of on-going operational decision making
• How StimulusScorecard can facilitate clear communication with the public on who is benefiting from projects and who is responsible for keeping project commitments
• Review of example Stimulus Project Scorecards

To register: https://www1.gotomeeting.com/register/978908841

Strategy Execution vs. Performance Management: What You Need Software To Do (Part 9: A Platform for Results)

Time for 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 Strategy Execution vs. Performance Management, 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), who should manage this software in your organization (part 7), and distributed management (part 8). Today, it's all about what features in Strategy Execution software will help you achieve results.

So far in this series, I’ve been arguing that technology is needed to support true Strategy Execution.  More specifically, software that clearly captures the objectives of the organization and cascades them down through multiple levels, helping you ensure that everything is aligned to achieve the results you want.  

Once an organization masters these simple, profound concepts (that are ironically difficult to practice), they end up wanting more. Lots more. Here are some things I’ve seen organizations want as they become more advanced:

• Support for six sigma methodologies. Control charts, control limit calculation, out of control condition alerting and stoplighting, graphical navigation of connected control charts.
• Strong support for linking personal goals to the organizational strategy. Support for not just business reviews, but also personal reviews. The ability to “cascade” some of a manager's goals to her direct reports. The ability to have common department or company goals. Easy linkage with a compensation system.
• Process Management and Improvement. Once an organization has tackled the top-down strategy approach, they find gaps in cross functional areas. Select a system that can manage processes as well. Support for process hierarchies, process maps, and the ability to link measures and initiatives to the process are all important here.
• The ability to benchmark against internal and external best practices examples.
• The ability to support communities of practice or special interest groups to share best practices.   

Our next post will wrap up this topic with some predictions of where this whole Performance Management / Strategy Execution area will head over the next few years. 

I’d love to hear your comments on this topic or any questions you may have about using software to drive your Strategy Execution efforts.

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.