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.

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.

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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)

Four Things You Should Know About Your Scorecard Measures

Measures trigger work. You're either creating measures, gathering data for them, reviewing them, or trying to improve them. That work will often be resisted due to confusion and credibility concerns. I coach my clients to know 4 things about every measure they have:

1. Where does the data come from? This is the most common challenge leaders throw at measures. "I don't trust the source, so I don't need to act." You need to know what department pulls the data, if they transform it in some way, who quality checks the data, and who loads it into your scorecard. 

2. What is excluded from the data? Too often, leaders look at measures for months without really understanding what the numbers mean. Specifically, they don't really know what's included and excluded from the numbers. It's important to know those nuances before you spend time and money on improving the numbers.

3. Why did we set the target? Typically, those who are responsible for acting on measures weren't in the meeting when the target was set. Many times, there's even confusion within the team that set the target. I ask my clients to find out who set the target and what the rationale was for setting it.

4. What accumulation do we care about? Knowing the answer to this subtle question will help you clear up a lot of confusion. Each time the scorecard team meets to discuss the measure, is it more important to talk about performance YTD, performance just this period, or the performance as a snapshot in time?

Let me know if you consider other questions that I didn't mention.

Two Quick Tips to Keep Your Scorecards Alive

Tip #1: Put all scorecard reviews for the year on the calendar now.

I’ve said it many times in the past, but it’s worth repeating. It’s not what gets measured that gets done. It’s what gets reviewed that gets done. Events drive behavior. If measure owners and your data entry people don’t see a date set in stone when managers will meet and review the scorecard, they won’t update the data action items. There are so many other demands on their time that if they can let this one slip, they will.

Tip #2: Always repeat the same agenda.

There are a few agenda topics that are critical to keeping the strategy alive, even late in the year. Too often, these agenda points drop off after the first month because scorecard teams are busy fighting fires and reacting to their daily work. I recommend that every scorecard review contain the exact same topics throughout the year. If some topics need more time, fine, but the scorecard review must touch on all the topics.

Here are some of those topics I see commonly discarded later in the year:

• State the strategy.

• Has the strategy changed?

• How do we measure the strategy?

• Are the targets still valid?

• Who is responsible for meeting the targets?

• What are the most important measures now?

Go forth and review!

Musings on Measurement and the Quality of Working Life

Last week, I had the pleasure of addressing an assembly of Florida local government performance management professionals. Yes, I was preaching to the choir, but they carry the message of the benefits of measurement back to their governments. I encouraged them to use sports analogies to explain the message. Pro teams track their win/loss records (and revenues) on their top level "scorecards," and the offense has a "linked" scorecard, as does the defense. Each player has "Personal Goals," such as completed passes, yards gained, etc. Players do not feel imposed on by measurement but understand that it is an essential tool for individual improvement and sustained high performance by the team. Moving to another sport, Michael Phelps does not get upset when his coach uses a stopwatch to measure his performance and he is used to knowing times for individual laps so he can assess his performance in segments from the time he leaves the blocks to the millisecond he touches the wall to finish.

This approach to discussing performance measurement often resonates for the athletes, former athletes and us fans. However, there still is a lingering fear of measurement. The fear is not irrational; the misuse of measurable goals goes back a long way in American business culture. Dr. Deming himself would rail on about arbitrary targets that were unreachable because of the limits of process capabilities. Regardless, they are used to "push" people, but in fact demoralize them. People rally around a reachable "stretch" goal, but lay down and push paper when the impossible is asked. If you ask me to do a six minute mile, I laugh or cry; I don't try. Ask me to walk a mile a day for my health, and we have a real conversation and I am motivated.

Which brings me to something new I have learned about measurement. It literally can be good for our mental and physical health. I recently heard a commencement speech by the Dean of the Education Department at the University of Miami. He stated that there is considerable research suggesting that people who have control over their work lives (are empowered) live longer and use the health system less. Empowered employees are employees with measurable personal and project goals and have great discretion in the approach to achieving goals and meeting specifications. Effective empowerment cannot be accomplished without performance measurement. This observation should help performance management professionals appreciate the importance of their work, not only for organizational excellence but also personal well being.

Dean Prilleltensky had another message for the graduates. Important human advances are made by changing systems/processes. We need to help individual managers use measurement to develop their organization and employees. More importantly, we need to affect how measurement and managment are taught and modeled by leadership.Maybe electing former pro athletes to Congress is not such a bad idea after all.

Do you have the right MAP?

Yes - summertime is here. Do you remember “back in the day” when your family would go on a vacation? My dad was a huge AAA fan, and for our family road trip vacations, we always had the AAA “TripTik.” It was a customized paper map that highlighted the route, the towns along the way with mileage estimates in between, etc. For you younger folks, no, we didn’t always have GPS devices in the car.

Given your company’s current path and journey, what “map” are you following? Is your map determined by the daily headlines? Is it determined by fluctuations on Wall Street, or by a reactive leadership team?

To reach your goals, whether they’re at a personal or company level, you need to know how you are measuring success, and what action items need to be initiated to change performance. How are you going to change processes or a given set of behaviors?

I like to think of three basic components to setting goals and achieving results. Call it designing your own personal “TripTik” or your MAP: Measure, Action, Performance.

For your given scope of work, day in and day out, what should be on your MAP? The first step is to determine what you are going to Measure. What are the top 3-5 measures that you should examine and track that will provide you with the best indication of how your journey is progressing? If you are a leader at the top of the organization, you’ll be following some “lagging” or broad scope measures like margin or turnover rates. However, you’ll want to dive deeper and identify some leading, or causal measures as well. Ask yourself, what few measures provide us with the best indication of future performance? If you’re in healthcare, maybe it’s your imaging volumes, cardiac procedure revenues, and use of contract labor that provide the best indication of your end of the month or quarterly margin.

Maybe you’ve heard the statement “vision without strategy is called a dream.” Well, measures without action items are just numbers. They do no good if they don’t lead to Action. You now have the top 3-5 measures for your department or your project; each of them should have an initiative or project aligned with them. Something will bring about a change and lead to results.

Once your initiatives are in place, once you’ve applied a strong lever arm to that measure you want to move, you need to monitor and manage the Performance. Did it improve for one month, then fall back to the previous performance level? How are you going to track and keep that measure in control? Consistent reporting with the expectation that the measures will be reviewed and discussed are key components to accountability within your teams (and maybe even for yourself).

Chances are, you’re probably not loading up the minivan to drive aimlessly across the country this summer. (If you are, please call - I want to go.) In today’s economy, you don’t have all kinds of time to reach your destination, so you better have a good MAP.

Don't Get Killed by an Anecdote

I was working with a client today whose Strategy Execution framework I'm helping to build and automate. When we were talking about setting good targets for some key performance measures, I was reminded of an important lesson I had learned years ago about effectively measuring service levels: hitting average service level targets is not enough.

Several years ago, I worked for a CRM company that managed the laptops of very large companies' sales forces. If a sales rep had a problem, he or she simply overnighted the laptop to our company, we fixed it, and overnighted it back. We targeted a 4-day turnaround. In reality, we almost always turned around repairs and shipped the unit back in one -- or at most two -- days. Great, right?

Well, sometimes there were problems. Sometimes an incoming unit was put in the wrong pile. Or the rep didn't put the right RMA number on it. Or it was shipped out without a label. Not to worry, though. These kinds of thing were REALLY rare and we were always within our targeted 4-day average.

Performance Management Forum for State/Local Governments

For anyone in State/Local Government interested in Performance Management, there is a free breakfast forum taking place this Friday, August 8th in Philadelphia. This is also open to any non-profit organization wishing to learn about these topics.

The focus of the forum is "Sustaining Performance During the Good Times and the Bad" and will include an impressive line-up of panelists whom you'll be able to query about best practices and ideas for overcoming challenges, even as budgets are getting squeezed.

The panelists are:

• Jeff Friedman, Deputy Director of Performance Management, City of Philadelphia, PA
• Steve Marchand, Mayor, Portsmouth, NH
• Mark Freeman, Performance Management Coordinator, City of Columbus, OH
• Chris Heflin, formerly with the City of Coral Springs (2007 Baldrige Winner) and now heading up ActiveStrategy's Public Sector Consulting Practice

The event is taking place at the Sofitel Hotel in downtown Philly. It's just a few blocks from the 30th Street Train station. Breakfast is at 8:00 am and the forum will wrap up by 11:30.

See more about the event and the topics on the agenda at the Performance Institute website.

If you're within a short drive (or train ride) from Philadelphia and would like to attend, email ward@performanceweb.org to rsvp. Though the event is no charge for Government employees, you do need to rsvp.