Performance Management & Strategy Execution Blog: The Glue

The Unvarnished Truth 3: Seven Types of Executives That Hinder Breakthrough Performance

In my first two posts on this topic (The Unvarnished Truth: Why Balanced Scorecards & Performance Management Efforts Fail and The Unvarnished Truth 2: What Executives Must Do to Drive Breakthrough Performance), I talked about how there is often a single executive standing in the way of success when it comes to achieving strategic goals. I've been calling this person the "Breakthrough Roadblock" (BR)  and in this post I'll describe seven different types of BRs that I've seen get in the way. In my next post, I will talk about how to work with (or around) each type.

One thing that frustrates a team working on a strategy execution or performance management effort is when they don’t feel they have the support needed from executives to make their effort successful. This is a serious issue. It is a difficult position for a subordinate employee to push a Senior Executive (sometimes the most Senior Executive) to use “best practices” management techniques or to tell them when they are dropping the ball.

Often my work with clients involves much time serving as a sort of combination campaign strategist and psychologist to the de facto leader of the implementation team. In this role, I help the team figure out which executives can be strong supporters to demonstrate success, which will most likely be problems, and how best to deal with them. We also put together a plan to get the top executive to do the things I laid out in my previous post to make sure the effort is successful.

Now don’t get me wrong. Most strategy execution efforts do have the support of Senior Executives (or these efforts wouldn’t get past the idea stage). Most Senior Executives know or can sense by experience what needs to be done. But there are enough that either by commission or omission derail projects that I think they can be divided into a few general types.

So, without further ado, here are the "Seven Deadly Executive Types" that hinder strategy execution and breakthrough performance. 

1. The Flash-in-the-Pan
   The Flash-in-the-Pan is a whirlwind of excitement and support when a strategy execution project begins. S/he will loudly and publicly state how important the effort is and how the entire organization is going to get behind it. S/he will often be extremely engaged in initial strategy sessions. However, at some point, the engagement and support for the effort will begin to fall off, often diminishing with geometric progression as the executive becomes enamored with the “next” big thing. Usually, staff will understand this personality type of the Executive and have techniques to compensate.
   
   
2. The Bureaucrat
   The Bureaucrat is more of an administrator than a leader. Rather than lead the troops to victory, the Bureaucrat makes sure all of the processes are defined, the right positions are staffed, funding is provided, and infrastructure is in place to support just about any initiative, including strategy execution. Bureaucrats are found in large, complex organizations with complex reporting and governance structures.
   
   The Bureaucrat will set up the team, fund the effort, schedule and participate in meetings, etc. But when the time comes, s/he will not require everyone to get behind the effort and adopt the best practices of strategy execution and business reviews. The infrastructure will be built, some enlightened executives will take advantage of it and there will be local successes. Ultimately, the build-it-and-they-will-come approach of the Bureaucrat does not lead to widespread breakthrough performance.
    
3. The New Guy
   The New Guy (or Gal) is simply going to clean house to do things “their” way. Balanced Scorecard? Gone. Structured Business Reviews? Replaced. Sometimes these dislocations will be temporary and some of the strategy execution activities will start up again (though often with new names).
    
4. The Negative Old Timer
   Of course old doesn’t refer to age; it refers to someone that has been in their position or in their organization long enough to believe that “we can’t do that here” or “we don’t work that way” or “that approach won’t work; we are different.”  Basically, this is someone who has become convinced that change can’t happen.
   
   It’s amazing how many organizations think that they are so different that proven strategy execution best practices can’t work in their environment.  “We can’t have accountability because we are team culture.”  “Every manager needs to have responsibility for their own area and do things their own way.”  “These people are professionals, I’m not going to tell them how to run their areas.”
   
   This type of road-blocker will often not be the most Senior Executive pushing the strategy execution effort, but rather a fixture on the Senior team that lots of people in the organization look to for advice.
    
5. The Delegator
   The Delegator is similar to the Flash-in-the-pan, but probably won’t be as energetic in communicating and popularizing the strategy execution program. The Delegator will believe that the program is the right thing to do but will almost immediately give someone else (often someone too junior) responsibility to “make it happen”. The Delegator will often miss or cancel project related meetings. The team working on the strategy execution project may wonder if it is even important and keep it in “proof of concept” or “demo” stage indefinitely. Delegated strategy execution projects almost always fail.
   
   
6. The Not-My-Idea Guy
   The Not-My-Idea Guy will resist the strategy execution project because it is different than something s/he is working on. This person might agree with the idea in general, but not the approach – because they have a different approach. It could be terminology, how business reviews are conducted, which management tools are (or aren't) being used, or how strategy is laid out in strategy maps or scorecards.
   
   Rather than try to merge efforts for the greater good, this type of Executive will often draw battle lines and try to make their approach “win”. People can get so emotionally attached to their approach or vendor that they will fight to the last breath over what in the grand scheme are pretty small issues. I’ve personally seen many instances of companies wasting hundreds of thousands of dollars pursuing efforts that were clearly destined to fail because they were the pet project of a Not-My-Idea Guy.
    
7. The Sniper
   Pure politics. The Sniper is always looking to find political advantage or shore up support. If that strategy execution project can help her/him, s/he will be right there to support it. But if it ever gets in the way or can serve as a blemish on a political rival, all bets are off.
   
   You know the type. They are out there. Since a strategy execution project affects so much of the organization, how it is managed, and how people are held accountable, it makes a great target (for good or ill) for the Sniper.

So this is my round-up of the seven main types of BRs that you may encounter if you're driving a performance management or strategy execution effort at your organization. Have you seen these? Or others?

Next time I'll talk about how to approach each one so you can still achieve the ultimate goal: real, sustained breakthrough results.

The Unvarnished Truth 2: What Executives Must Do to Drive Breakthrough Performance

In my last post on this topic (The Unvarnished Truth: Why Balanced Scorecards & Performance Management Efforts Fail), I talked about how there is often a single executive standing in the way of success when it comes to achieving strategic goals. I called this person the "Breakthrough Roadblock" (BR) and in this post I'll talk about what executives need to do if they want to facilitate, rather than be a roadblock for breakthrough performance.

Here are the six most critical things I think executives must do to assure that strategy execution and performance management efforts get results:

1. Communicate relentlessly – Executives should mention the effort in almost every interaction with groups of employees and even their direct subordinate. A one-shot “roll-out” meeting isn’t enough.
2. Be involved in the strategy development – if creating a top-level strategy map and scorecard are part of the effort, the top executive needs to be involved. The entire leadership team needs to be 100% behind the strategy outlined in the scorecard. Delegating creation of the responsibility is a huge, early sign that the effort is not important to the top executive.
3. Follow up – Breakthrough Roadblocks (BRs) often are involved in helping to get a strategy execution effort going, but then move on and let it wither and die. Enlightened Executives don’t have to work the project every day, but they ask for updates, help answer policy questions, and resolve organizational difficulties.
4. Kick butt—OK, so maybe that is not the approach in every organization to get naysayers on board. Sometimes it is convincing, encouraging, pleading, etc. But make no mistake; the Enlightened Executive makes sure his entire team is on board. BRs are fine with tepid statements of support or will let some Senior people not participate. The worst practice: build “capability” and let leaders “adopt” it as they see fit.
5. Ease the change – All change includes a "valley of despair." Whether you are using software or Excel to manage your metrics and scorecards, putting in place a closed loop management system based on strategic objectives and both leading and lagging measures is hard. It takes time and work. In my experience, in the end it saves work but people in the valley of despair are going to whine about the “extra” or “double-entry” work. The BR will offer them relief, push deadlines, or use their complaints to back away from the effort. The Enlightened Executive will keep everyone marching towards the same goal.
6. Walk the walk—In my view, the entire reason for embarking on a strategy execution effort is to get to a point where the entire organization is conducting regular, fact-based business reviews using the same line-of-questioning methodology to identify and address root causes. If the top executive is not conducting such reviews, why should anyone else?

What other executive leadership qualities have I missed?  I’d love to hear from you.

The Unvarnished Truth: Why Balanced Scorecards & Performance Management Efforts Fail

I’ve seen statistics thrown around that between 50 and 78 percent of “Balanced Scorecard” efforts “fail.”^* Gartner’s latest research reports the number at about 50%, but when you look at the survey targets and numbers, it would be hard to put a lot of faith in that number. 

I do know -- from seeing hundreds of implementations over the last decade and coming in to “clean up” problems -- that it's true that many do fail. And I know why.

But before we go there, I want to point out why I have the terms “Balanced Scorecard” and “fail” in quotes. First, I’ve seen lots of performance management efforts termed “Balanced Scorecard” that bore only passing resemblance to the principles laid out by Kaplan & Norton^✝. I’ve also seen lots of efforts that employ the nuts and bolts of the “Balanced Scorecard” but neglect other elements needed for successful strategy execution. So when you see reports on Balanced Scorecards, just understand whether or not what they're assessing is the real deal.

Then there is the word “fail.”  What does “fail” mean?  Failed to live up to the expectations of the executive team? Failed to save the job of the CEO? Failed to get updated with new data and used to drive business reviews? There are plenty of interpretations for this term, too.

So without strong numbers on how many of these efforts fail or what failure even means, I’ll go out on a limb and say the primary reason that virtually all such efforts fail is: timid, unfocused, or unengaged executives. Usually you can even trace it to a single executive who -- if things were different -- could not only prevent scorecard failure, but could actually use the scorecard to drive true breakthrough improvement. Usually, that executive is at the top of the organization in question. I will call this person the Breakthrough Roadblock (BR).

I’ve seen lots of BR’s. In the next post, I’ll list the things I think are needed from an executive to assure the success of a strategy execution effort. Later, I’ll try to categorize BR personality types based on what I've seen in the field over the past ten years or so. I don’t claim to be exhaustive or authoritative on this topic. I’d really like to hear from you.

✝By the way, while researching this blog, I found lots of interesting fodder on the question “Who created the Balanced Scorecard?” Surely a topic for a future post.

*Based on our client retention rate at ActiveStrategy, our clients have experienced a much better success rate than the world at large.

Successfully Executing an Enterprise Strategy in a Multi-Cultural or Multi-National Organization

There are five key elements that must be in place at any organization hoping to successfully execute strategy using Balanced Scorecards:

1. Strong, involved leadership to establish the focus and drive accountability
2. A clear 3-5 year strategic focus on the top strategy map and scorecard, plus a “focus within that focus” for a few key enterprise improvement areas
3. Alignment of that focus to all functional and cross-functional departments/entities
4. Orchestrated improvement of the key “focus within a focus” areas throughout the organization
5. Accountability at all levels to manage and improve in a way that is consistent with the strategy

And, based on my experience from working with many multi-cultural and multi-national organizations, there are five additional areas that need to be addressed carefully to ensure success within these types of more complex organizations:

1. Communication of the strategy must be multi-faceted and tailored to the various cultures.
2. Training on what you want executed, why, and the resulting benefits to each person must be handled as a priority.
3. Leadership must be sensitive to the various cultural mores in the ways that they communicate the benefits of the strategy execution framework, communicate the strategy itself, set individual and departmental expectations, and hold people accountable.
4. The focus on under-performing areas must be crystal clear, but sensitivity to culture must be taken into account.
5. Different cultures react differently to individual recognition, so you may need different ways to recognize success within different cultures.

Here are a few more details on each item:

1. Communication:
Communication of a high-level strategy is, of course, important in any culture. But it is even more important when various parts of the staff see the world differently, speak different languages, and come with different expectations of management. A multi-pronged approach works best. Consider:

• using multiple forms of media to accommodate different styles of learning and to provide helpful repetition of the key messages
• providing tangible examples of exactly how the strategy might be translated to lower levels
• allowing ample time (more than you think you need) for questions
• scheduling follow-ups to test and confirm understanding

2. Training:

Training on why the new framework is important, what the strategy means, how it applies to each person and their scorecard, and what’s in this new framework that benefits them is always important. With people from different cultures, more one-on-one follow ups are needed to ensure that you have broken through the language barrier and/or cultural paradigms. Individual coaching and mentoring is almost always required, as many people will not communicate that they don’t understand if they fear that they will “lose face” or be viewed as not very intelligent or knowledgeable on the subject matter.

3. Leadership:

Without a senior leader communicating why the new strategy, scorecard, and business review framework is important, setting expectations around accountability for goal achievement and improvement, and then holding people accountable for execution, no systematic approach will ever work effectively. In all cases, but especially in multi-cultural and multi-national environments, translation of those measurable goals and improvement initiatives to the various levels is critical. Also, periodic performance reviews must occur in a way that absolutely ensures “win-win” for all individuals through proper training, mentoring, preparation, and through the tenor of the review itself (read the next section for more on this).

4. Focus on Under-performing Areas:

In scorecard vernacular, under-performing areas are usually portrayed by red stoplights. The reason scorecards have reds is to draw attention to issues that require action so that the appropriate owner(s) can improve performance. In some cultures, however, I have experienced the color red to be a huge barrier to scorecard adoption because any red stoplight is seen as a major embarrassment. 

What you care about, of course, is not having red on scorecards, but driving the focus on under-performing measures and late milestones. If using red is a problem, use a different stoplight convention. Some organizations I've worked with, for example, have had good luck using blue for excellent performance, green if performance is good, and yellow to indicate that action is needed.

5. Recognition:

In my many years of helping organizations around the world manage performance and execute strategy, I've seen that different cultures across Europe, Asia, and the Americas view personal recognition quite differently. In Italy and Japan, for example, recognition that most Americans would relish is not appreciated in the least. To be sure that the recognition you bestow on your teams is proper, talk to the employees and staff and pay particular attention to what is appropriate for individual cultures. The last thing you want to do when trying to praise an employee is embarrass him or her!

What cultural issues have you encountered when deploying scorecards and performance management at your organizations? I'd love to hear your thoughts, insights, and questions that you have.

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.

8 Key Roles Leaders Must Play to Make Balanced Scorecards Successful

Senior leadership support is absolutely essential when it comes to implementing performance management frameworks like Balanced Scorecards.

But what does "support" really mean? Listed below are eight specific things executives or senior leaders should do to support their organizations as they implement a Balanced Scorecard framework.

These eight key roles were originally identified by Dr. Joseph M. Juran, considered by many to be the father of quality management. In my opinion, Dr. Juran -- especially as compared to Dr. W. Edwards Deming -- placed more emphasis on a holistic approach to effectively managing an organization. I also think he had a better understanding of management's perspective on running the organization.

I believe Juran hit the nail on the head when it comes to defining these roles, which apply perfectly to organizations that are implementing Balanced Scorecards to drive organizational improvement and ongoing performance. I've included my own commentary to help relate the roles more specifically to scorecards:

1. Serve on the governance vehicle that is established to guide the entire performance excellence journey.

• While implementing a Balanced Scorecard framework to more effectively and efficiently operate an organization, some new approaches will certainly be deployed. Therefore, governance is an important part of the new framework, as there will be different rules, processes, and guidelines introduced that will need further definition and approval. Senior leaders must play an active role in these discussions to ensure that changes of this magnitude are actually implemented and sustained.

    2.   Establish the high level organizational strategic goals.

• Establishing the high level goals of the organization is the obvious starting point for a Balanced Scorecard framework, because those high level goals (including objectives, metrics, targets, and strategic initiatives) make up the enterprise scorecard. The goals (and the top level scorecard) should be established using a strategic planning process that the senior leaders should always lead.

    3.   Provide the necessary training to expedite the changed behaviors.

• As mentioned above, new approaches will be introduced to the organization, which will require changes to the culture and ways of doing business. Training and coaching are key steps in successfully introducing and locking in change. Too many scorecard frameworks fail because they fail to be explained and adopted below the executive team.

    4.   Stimulate focused and systematic performance improvement.

• Improved results occur because of both focused and systematic performance improvement. Any results that occur from luck or chance are not sustainable. Improvement efforts must be carefully targeted and designed -- usually during strategic planning -- and then systematic processes like Lean or Six Sigma can be used to permanently change and improve the current business processes to drive improved results. Senior leaders must create and support a culture that includes systematic approaches to improvement.

    5.   Regularly review progress.

• “What gets reviewed, gets improved” is a commonly heard truism. The reviews should be analytical in nature, usually monthly in frequency, and focused on both the progress of aligned initiatives and on the performance of key metrics. This role is one of the most important ones for a Senior Leader to initiate and role model. Too often, senior-level reviews are only superficial or are conducted too infrequently to drive the focus and attention needed to ensure improvement.

    6.   Give recognition.

• As Frederick Hertzberg, who authored many books on motivation, wrote one of the best long term motivators of employees is recognition of their work and achievements. So, if your goal is to lock in change, one of the best ways to do that is to formally and publicly recognize the positive results of the new (or newly revived) Balanced Scorecard framework.

    7.   Revise the reward system.

• Aligning rewards, whether monetary or not, to the new desired behaviors that you are seeking in the changed system is a sound practice to achieve and sustain the behaviors long term.

    8.   Provide the needed resources.

• Although Philip Crosby, another Quality Guru, wrote that “Quality is Free,” the reality is that it does require some upfront and ongoing investment to change and improve an organization. The payback from that investment can be 5 to 10 times the investment, but the investment in people, skills, time, etc. still must be made.               

        

            

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.

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.

Should Scorecards be Strategic or Tactical?

In one word, “yes.” Balanced Scorecards are both strategic and tactical, depending upon where they exist in an organization.

Before I explain, let's take a step back and define terms. What do we consider to be strategic? The practical definition is that it is what emanates from a strategic planning process, usually in the form of multi-year strategic improvement goals or objectives (such as "Grow Global Revenues") or as strategic imperatives or initiatives that support these goals and are time-bound by design (e.g., "Develop two new products to fuel global revenue growth"). Tactical can be defined as those activities that are designed or carried out with only a short-term end in mind.

So strategic issues are longer term and improvement-focused and therefore appeal to -- and must be managed primarily by -- the senior leaders of an organization. So since they own these issues, senior-level scorecards should clearly be dominated by strategic -- not tactical -- goals and issues. And to be really forward-looking and strategic, senior management-level scorecards should have multi-year targets for goal measures and multi-year improvement initiatives, as well. Some of these initiatives might have milestones that start later in the current fiscal year or even in future years.