JUN 5, 2008 2:52am ET

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Performance Management from Future Diaries

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I recently read a newspaper column consisting of fictional future diary entries written by politicians.1 It inspired me to conjecture what executive C-suite officers might write in their diaries. My crystal ball is crystal clear. From the year 2015, with perfect hindsight, here are the personal diary entries from the executives of a fictitious corporation reflecting on their experience implementing a performance management framework.

 

Vice President of Sales

 

Dear Diary of Sales Commissions,

Recalling 2008, I did not believe our CFO’s claim that some long-term customers were very unprofitable. But, I saw the facts in her customer profitability reports. I could not believe that the customer with the highest sales volume was much less profitable than our midsize customers. She proved that all the extra work we work did for our “number one” customer substantially dragged down our profit. When the CEO and CFO ganged up on me to change our sales force’s commissions and bonuses to include targets for customer profits, I thought they had flipped out. Everyone knew the name of the game was sales growth. Now I realize the goal is growing sales profitably – smart growth. You live and learn.

 

Vice President of Operations

 

Dear Diary of Chaos,

I remember back in 2008 when my solution to our volatile and dysfunctional operations was to standardize our processes to reduce costs. But as the years progressed, I realized that our marketing research and engineering product and services development was increasingly tailoring differentiated products and services to each customer segment – and they kept micro-segmenting our customer base and future sales prospects! The continuing customized services became a huge tsunami that standardization of processes could not overcome. Now, I am thankful we shifted our efforts to attaining much higher forecasting accuracy. The better our forecasts, the less uncertainty we have experienced and the better our scheduling and capacity planning. What was I thinking back then?

 

Vice President of Marketing

 

Dear Diary of Spray-and-Pray Advertising,

In 2008, my MBA marketing courses taught me the fads of the time - put your budget in branding, take your big customers golfing and use gimmicks to retain existing customers and acquire new ones. Fortunately, I discovered that the secret to maximizing the yield from my budget was through understanding the unique preferences of our customers and targeting new ones with traits similar to our most economically valuable customers. My big “ah-ha” was when I saw how powerful analytics of all flavors – statistics, segmentation, forecasts – provide us with answers. At first, I feared that the cost and effort to collect, understand and apply all the necessary data would be galactic and that I would have to replace my street-smart marketing staff with Ph.D. geeks. But, I saw my team gain competency with precision targeting of their marketing campaigns as well as optimizing deals, offers and service levels based on the new intelligence we gained about our customers and their desires.

 

Vice President of Human Resources

 

Dear Diary of Employee Turnover,

My staff and I reminisced today about how proficient we were back in 2008, processing paperwork for exiting employees and stacking inbound resumes in piles. I am so glad those days are over. The big breakthrough in our mind-set was when we seriously applied workforce analytics to retain employees by predicting, who was most likely to quit next. We could optionally intervene to prevent them from resigning or hire new employees that fit our needs and culture. Now, my challenge is growing our employees’ brains to accelerate their pace to innovate.

 

Chief Financial Officer

 

Dear Diary of Jail Prevention and Bean-Counting,

When we built our second cafeteria in 2008 just for the on-site external auditors, I thought that any aspiration for me to actually help improve our business would be consumed with a life of compliance and governance duties. Thank you, thank you, thank you for the software systems that have made those responsibilities just a minor job. I recall my excitement over the past years to use my free time in a much more value-adding way by helping our workforce and executives improve profit performance. This new twist has been a rewarding surprise. Also, I love my expanded role contributing to the green and sustainability movement, which enables my organization to achieve a negative carbon footprint with money to spare to reduce global poverty. We are now only a year away. Yesterday my kids told me they want to grow up just like me. I’m a hero in their eyes.

 

Chief Information Officer

 

Dear Diary of Spreadsheet-itis,

I still laugh about the CIO I replaced in 2008 who got fired when our business nearly collapsed as a result all of our spreadsheets converging into an infinite closed loop system. All our laptops kept endlessly calculating and calculating. No new data could be input or information reported. Our company logo could have been replaced with the hourglass symbol. Spreadsheets are a disease, but I cured it with business intelligence systems. I wish I could laugh today about the dwindling size of my IT department. All the line and staff departments now do what we used to do for them. I guess buggy-whip makers somehow found new careers. I’ll survive.        

 

Chief Executive Officer

 

Dear Diary of Relentless Pressure,

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