People think in comparisons, so let me give you an analogy. I am a big fan of movies – old black and white ones, new ones with special effects, and most types in between. I especially like musicals. One of my favorite musical films is “West Side Story,” released in 1961. It is a retelling of Shakespeare’s tragic romance “Romeo and Juliet.” What do a Broadway musical and its subsequent film version have to do with successful enterprise performance management? Plenty. Here is the background.
Please oblige me if you are so young that you are unaware of this film or have dismissed it as a silly folly about two tough 1950s New York City street gangs – the working-class white Jets and the Puerto Rican Sharks – dancing and singing. “West Side Story” has parallels to what it takes to achieve the full vision of a successful implementation of the performance management framework.
Essentials: a Skilled Team, a Talented Delivery Team and a Breakthrough Event
A first parallel is the skilled design team. Three giant talents in their respective fields collaborated on “West Side Story”: Jerome Robbins in dance, Stephen Sondheim with its lyrics and Leonard Bernstein with its music. Prerequisites of successful performance management methodology implementations are a good model design and construction to provide cost reporting and analysis, strategy management, performance measures, operational planning and budgeting, and business analytics.
A second parallel involves the operator of the performance management framework. Who will analyze its information, gain insights, make decisions and take actions? “West Side Story’s” film actors were not widely recognized marquee names, but they were incredibly talented and were wonderful performers who were passionate about their work. Similarly in the work world, without passion and zeal, project managers and users of performance management methodologies are just going through the motions – just showing up for a day’s pay. Dedicated, talented team members who will care about the framework and methodologies are essential to making performance management successful.
A third parallel is a breakthrough moment or event. The opening night of a Broadway or London West End play or musical is a do-or-die situation, dependant on the acceptance of the audience and the positive next-day reviews from critics. A little-known fact about the opening night of “West Side Story” on Broadway is that it almost flopped. During the first hour of the performance, the audience was unemotional and unresponsive – stone cold.
But the breakthrough moment that saved the play and sparked the audience’s interest was the rooftop scene with the Sharks and their girlfriends. The scene opens with the girls proclaiming their happiness as immigrants and singing the song “America,” starting with “I want to be in America! OK by me in America!” It was a magical moment, and the audience lit up.
Was the audience’s change in mood because of a tug of U.S. patriotism? Was it the Latin beat of Bernstein’s incomparable music? Was it Sondheim’s inspirational lyrics? Was it Robbins’ energetic dance choreography? Perhaps it was the synergy and chemistry of all of them combined. What matters is the audience’s acceptance of the musical was sparked. As the story unfolds in the last hour, with the love story of Tony and Maria and the reduced animosity of the Jets and Sharks, the audience is rewarded with a memorable experience.
Applying the Three Parallels to Enterprise Performance Management
Successful implementation of the performance management framework benefits from aligning all three parallels.
The developers need to be skilled. The project team needs to be talented. Finally, some sort of spark or trigger event is needed to get buy-in – both from the users of performance management information and from the executive team.
An example I witnessed of a breakthrough event that secured buy-in was when a CEO was presented with his first customer profitability report using activity-based costing principles. It revealed that a high-maintenance and long-term problematic customer was woefully unprofitable to his company – both in full as well as at the variable cost level (i.e., excluding fixed and sunk expenses). The CEO immediately ordered drastic actions that no longer tolerated status quo treatment of that onerous customer. The actions included unbundled price surcharges and inducements for the customer to alter its invasive behavior that would lower demands on the company’s work force and the resulting higher costs. The CEO almost “fired” the customer until cooler heads prevailed. The line managers did some prudent thinking inspired by seeing the unflawed and more visible cost reporting, including the causes of the costs.
That one reaction by the CEO motivated his line managers to begin interpreting and acting on new information that had never been seen before. The accurate and transparent customer profitability information replaced misleading opinions based on the prior flawed and incomplete costing, which was based on the beliefs of the managers.
Strong Links in the Chain
The old adage that a chain is only as strong as its weakest link can apply to the performance management framework. “West Side Story” had three elements that led to its global and timeless appeal, and each one was critical to its success:
- Developers (the music, lyrics and dance)
- Users (the actors)
- Buy-in (the reception at its debut – a trigger event)
The successful implementation of information technologies is not simple. For example, some companies have abandoned ERP implementations before their completion. My belief is that, as with “West Side Story,” successful performance management is not about software but rather its model designs for each performance management methodology (e.g., a strategy map and its companion balanced scorecard, cost assignments), its users, and the spark or breakthrough event. The spark is not serendipity. The clever performance management project team knows when, where and with whom to ignite it.