I have a true confession to make: I have two loves - that is, in my relationship with enterprise performance management.
So what is my love problem?
Until about three years ago, my main interest was explaining the “how-to” of each methodology comprising the enterprise performance management framework and mechanism. Examples of performance management’s methodologies are strategy maps, scorecards, dashboards, activity-based costing, driver-based budgeting and customer demand management. I have implemented these techniques. I’m a practitioner. I am often told I have a gift to explain complex things in a way that a common person can understand them. No doubt, my field experience contributes to this. I enjoy explaining to people how things work and inspiring a vision of how those same things can work much better in the future.
I might not succeed in giving an easily understandable explanation in this article - love is very complex - but let me give it a try.
What happened to me three years ago? I was smitten when a competing suitor (other than my how-to love) appeared. It was my new “why-to” love – explaining the benefits of why it is necessary to implement and integrate performance management methodologies. Now they both compete for my attention.
As I concluded my seminars or discussions about enterprise performance management, I began asking this question of my audience: “Since these managerial methodologies are so logical, proven and beneficial, why is their adoption rate by organizations so gradual and slow?” Eureka! A flood of replies describing many diverse barriers and obstacles gushed from people. I found myself personally and increasingly attracted to these “why-not and why-to” discussions in contrast to my “how-to” lectures. They filled an emerging void for me – explaining my frustration with why more organizations were not advancing to a higher level of maturity with managerial methods.
Seduced by Emotions and Passion
My love for explaining the how-to of performance management has not waned. In fact, I love it more than ever. There is great satisfaction when you can enlighten managers and employee teams, for example, on how to build a strategy map, identify key performance indicators, design a right-sized activity-based cost assignment network or shift from traditional cost center incremented expense budgets to a future demand volume-sensitive driver-based budget and rolling financial forecasts.
Teaching how-to is a pleasure for me, perhaps because I was trained as an industrial engineer and engineers like to know how things work. What I have learned is that passion, along with curiosity, drives discovery. Passion is the mysterious force behind nearly every step-change in the process or introduction of a new idea, such as the balanced scorecard or customer profitability reporting and analysis. When I witness an effectively working component of a performance management system, it takes my breath away.
Discussions about why-not and why-to are also capturing my heart; and I am not alone in this. Other performance management thought leaders, such as Howard Dresner, who coined the term “business intelligence” when he was an IT analyst with Gartner, are converging on this attraction.
With hindsight, I realize that past barriers impeding adoption are easily removable. That is, technical barriers such as disparate data sources or “dirty” data have software solutions like extract, transform and load. Performance management component design deficiency barriers, such as how to properly construct a strategy map and select its appropriate KPIs, are broken down with experienced consultants and better training courses.
It is primarily social, behavioral and cultural barriers that obstruct the adoption rate of performance management methodologies. There are many examples of this type obstacle, including people’s natural resistance to change, not wanting to be measured or held accountable, fear of knowing the truth (or of someone else knowing it), reluctance to share data or information, and an attitude of “we don’t do that here.”
A Blissful Romance with Performance Management
When you mention these social, behavioral and cultural examples to project teams or internal champions tasked to explore, evaluate, implement or operate solutions, their heads all nod in understanding and agreement.
A number of thought leaders earned marketplace recognition with communicative “how-to” skills, usually based on practitioner experience within organizations. But now, we are being courted by this why-to love, and almost none of us have training or experience as organizational change management specialists. We are not sociologists or psychologists, but we are learning to become like them. Our adoration for the why-to and its motivating effects on organizations drives us like an obsession.
Dresner created a quantitative survey instrument to assess how ready an organization is to apply performance management. Frank Buytendijk at Oracle has been writing his blog about the importance of getting buy-in from employees. David Axson’s messages routinely touch on change management. Several of my blogs address altering people’s attitudes as essential to move up to the next wave of performance management – applying analytics within each methodology, especially predictive analytics.
During my seminars and discussions with customers, I routinely cite the need for executive team leadership with vision and inspiration to drive organizational transformation – not to manage more intensely. I try to motivate midlevel managers and champions to demonstrate to their co-workers that performance management methodologies make sense to implement.
My relationship with these methodologies and their embedded analytics continues to grow. My heart pounds faster when I hear or read about it. I struggle with dividing my time between my two loves – explaining how to do it and inspiring why an organization should do it. I once thought that just explaining how activity-based costing or a balanced scorecard works would be sufficiently compelling for organizations to act. Educating was gratifying for me. But now, I also find satisfaction in explaining the importance of overcoming social, behavioral and cultural barriers for organizations to take next steps. My dilemma of two loves is a nice problem to have. I love what I do.