The Intelligent Company

How Key Performance Indicators drive business success…and make you slim, fit and have shiny teeth

2012-01-25T01:44:00.000-08:00

People often asked me: Bernard, does measuring performance really help us improve? Can KPIs and metrics make a tangible difference in our businesses? And my answer is always a big and resounding YES!

In fact, I start my latest book ‘Key Performance Indicators – the 75+ measures every manager needs to know' with the words “Key Performance Indicators (KPIs) are the vital navigation instruments used by managers to understand whether their business is on a successful voyage or whether it is veering off the prosperous path. The right set of indicators will shine light on performance and highlight areas that need attention. ‘What gets measured gets done’ and ‘if you can’t measure it, you can’t manage it’ are just two of the popular sayings used to highlight the critical importance of metrics. Without the right KPIs managers are sailing blind.”

Three examples to illustrate the power of KPIs

Let me paint you three scenarios that I hope convince you (if you need convincing that is) and others that KPIs are indeed vital drivers of success. The little twist is that I haven’t taken these examples from any of the businesses I work with but from everyday life so we can all easily relate to them. The first is loosing weight, the second is getting fit, and the third is about brushing your teeth. Here we go…

How KPIs can help you loose weight

I know it’s not great to talk about loosing weight in January (especially as most of us will have broken our New Year’s resolutions by now). However, while many of us would like to loose a few pounds or so, we often struggle to do this. While our aims and intentions are clearly there, we somehow don’t manage to do it. I was in exactly that position (and as it is January – I am again), where I wanted to shift some of the extra pounds I put on over the holiday season. I was trying to eat well and exercise more but wasn’t loosing the weight I was hoping to lose. So when my friends were asking me ‘how many calories to you eat a day?’ and ‘how many calories do you burn off?’ I couldn’t really answer that. So I started to go about this a little more systematically by setting targets and measuring my performance. I set myself a body-mass target that I wanted to achieve within a given time period. I could then figure out the daily amount of calories I needed to stay within to achieve that. What helped was that I found a great smart-phone app that allowed me to track my progress. It allows me to monitor how many calories I am eating. This particular app has most foods pre-installed so it is simply a matter of putting it in and if you eat something that is not you can use the in-built bar code scanner to find the calorie content – great fun! Anyway, because I was now regularly monitoring the amount of calories I was consuming and could see how I was doing compared to my daily target I was loosing the weight I wanted. This is exactly why weight-loss programs like Weight-Watchers work: they set targets, then help you to measure performance and regularly review progress. So here we have it, KPIs do work when you want to loose weight.

How KPIs can help you get fit?

I am sorry to talk about another one of those New Year resolutions at the end of January, but when it comes to getting fit KPIs are great, too. To keep fit I am trying to run regularly and I am keeping track on how many miles I have run, what my average running speed is and how many calories I have burnt (which comes in handy when used in conjunction with the loosing weight app where I can put in calories I have bunt off doing exercise). Those of you who know me know that I am a gadget man, so how do I measure my running performance? Yes – another app. I use the latest Nike+ GPS app (highly recommended buy the way), which uses the geo-positioning chip of my iPhone to track my runs. So each time I am running the phone tracks (and maps) where I have been, how many miles I have run, what my average speed was, how many calories I have burnt, etc. Above that, whenever I switch the app on to go for my next run it asks whether I want to challenge myself to e.g. go a little further or a little quicker and the phone tells me along the way how I am doing. It even allows me to compete against others and publish my runs (live) on Facebook or Twitter which would allow my friends to track my progress and even cheer me on (don’t worry for those who follow me on Twitter – I am not going to bore you with my runs). So, in summary, I am running more often and am able to push myself further because I am measuring and tracking my performance.

How KPIs can make your teeth shinier

My final example is brushing your teeth. We all know that we should brush our teeth for at least two minutes, twice a day. A few years ago my dentist introduced a dental scorecard and gave everyone a score out of 100 – basically the better you brush and take care of your teeth the better the score. My score wasn’t bad and I was brushing my teeth twice a day but couldn’t really tell you whether it was two minutes or not. My dentist also recommended using an electric toothbrush because it cleans so much better. And as I love gadgets I had to have the one with the little wireless wall display telling me how long I have been brushing for. What is magic about that tooth brush is that you get a little smiley face after two minutes and a smiley face with a wink after two and a half minutes or so. Again, by measuring by brushing performance I have had so many moments when I thought okay – brushing finished – only to check my timer and find out that I have a little longer to go – and generally I keep going to at least the winking smiley face! Since I got that toothbrush by dentist scorecard has improved to an excellent score.

I hope that these are useful examples to show that KPIs do work and help us improve performance. There are so many more great examples of where KPIs and metrics make a real difference in everyday life and I would love to hear form you if you have any stories to share. Please let me know and help us spread the word that KPIs do work…

More soon,
Bernard

In the meantime, feel free to follow me on Twitter or watch the latest videos on Key Performance Indicators.

Five Top Tips for Corporate Performance Management (CPM)

2011-06-29T04:02:00.000-07:00

CPM is about managing and improving business performance, which, of course, is at the top of the agenda of senior executives across the globe. While businesses are pressing forward with CPM initiatives and shedding blood, sweat and tears to put balanced scorecards, KPI dashboards and business intelligence applications in place, there is mounting evidence that the execution of CPM is often too mechanistic, too number-focused and not integrated enough. As a consequence, many organizations are not seeing the performance improvements they desire.

In principle, CPM should be easy: agree on your strategy, collect meaningful and relevant performance information, and use this information to gain quality insights that allow you to improve your strategy and its execution. So how can we move beyond the meaningless collection of data and metrics to a situation where we collect relevant performance information that helps us to learn and improve?

Here I want to outline how to avoid some of the most common CPM traps and provide practical advice on how to turn your business into a truly performance-driven organization.

A lot of the dos and don’ts of CPM are based on common sense. Unfortunately, common sense is not always common practice and organizational realities often mean that we end up focusing on processes and individual parts of a larger jigsaw such as measurement and performance reporting instead of real performance improvement. Based on research and experience, here are the key areas to make CPM happen in your organization:

1. Map your strategy
If a company wants to reach its goals, it must first know what those goals are. If the over- riding strategy is clearly articulated, everyone will be able to pull in the same direction and will be more likely to focus on what matters the most, to produce real results. Research has shown that producing a strategic map outlining your value creation logic on one piece of paper can be one of the most important success factors in any CPM implementation. Such maps ensure strategies are focused, coherent and integrated and they allow easy communication of the strategy to all employees and external stakeholders.

Important is that these maps include the outcome objectives, the core activities or core processes to achieve the outcomes, as well as the enabling elements and intangible drivers of performance. It is also important that these maps outline the cause and effect relationship between these different elements and how one supports the other. [Many examples of strategy maps can be found in this case study collection: www.ap-institute.com/resources_casestudies.asp]

Don’t just populate existing strategy map templates without thinking about your unique strategic objectives and their causal relationships. Strategic maps have to reflect your unique business strategy at this point in time.

2. Collect meaningful information by asking the right questions
Without the right performance data, organizations would be stumbling around in the dark, having little idea of whether they were ‘on track’ or not. Yet, to be of value, performance indicators should help measure the things that matter the most. This means indicators need to be tightly and directly linked to the strategic objectives of an organization. In addition, performance indicators need to have a high information value (i.e. they have to provide you with information that helps answer your critical business questions).

A new concept in CPM is called key performance questions (KPQs). KPQs are developed to identify the most critical performance related questions managers need to have an answer to. KPQs therefore ensure any indicator that is subsequently collected helps to answer a critical question and has real information value. Best practice is to identify between one and three KPQs for each of your strategic objectives, before you start collecting any data or information. [Learn more about KPI and KPQ design from these white papers: http://www.ap-institute.com/resources_whitepapers.asp]

Don’t just collect everything that is easy to measure.

3. Ensure strategic alignment
CPM is more than just collecting performance measures based on your strategic objectives. It is about aligning key elements and processes of organizational management with your strategic objectives. This means aligning budgeting, the management of projects and programs, performance reporting, knowledge management and the management of risks with your strategic objectives.
Top performing organizations are able to identify strategic objectives and ensure their budgets and projects are aligned to deliver on their objectives. In addition, they ensure that performance indicators are used to monitor performance and risks related to their strategic priorities.

Don’t run performance measurement, budgeting, project management and risk management in parallel to each other without tight alignment.

4. Create a positive learning culture supported by analytics
Once organizations have collected performance information, they must analyze it before they can work out what it means and to gain insight into how they may need to change things to improve success against their goals. Knowledge is power – but only if it can be extracted quickly and efficiently from an ever-growing mass of data.
Business intelligence tools provide the capability to convert performance data into relevant information and knowledge. The difference between good and bad information is determined by how well it supports critical decision-making. Without analysis that leads to insights and actions, any CPM exercise is of little or no value.

Leading organizations now use their information to quickly and accurately answer their key performance questions. In addition, they put in place processes that create a positive learning culture in which performance insights are discussed and acted upon. A key to this are regular performance review meetings in which key individuals get together and discuss performance openly and honesty, where the results from the analytics are used to inform a dialogue about performance, and where collaborative decision making leads to actions and performance improvement.
These meetings are not there to look into the past or to fingerpoint at bad performance but to identify possible shortcomings in the future and to ensure actions are being taken to avoid them.

Don’t spend all your time and efforts on collecting and reporting data and not enough on extracting valuable and actionable insights from it.

5. Automate appropriately
Having the right IT infrastructure in place and using it appropriately is a key success factor. CPM software applications facilitate data integration, process alignment, analysis and reporting to a level that would never be possible without automation.

Many software vendors are focusing in on CPM but these solutions only deliver benefits if they contain the right information and if they are used appropriately to improve decision making. It is important to understand that automation is clearly not the magic pill that will sort out all your CPM problems. Indeed many organizations are seen to implement CPM software only to find that, once the initial excitement had worn off, they are left with a costly IT system and a slow realization that CPM is not about technology but the people and their processes. [Find a comprehensive list of CPM software vendors here: www.ap-institute.com/software.asp?ID=1]

Don’t just buy a software solution without a clear understanding of how it will enable your CPM processes to drive better decision-making.

3 Key Trends in Performance Management and Balanced Scorecard

2011-06-11T01:07:00.000-07:00

I have had the pleasure to spend the past two days with Bob Kaplan and Dave Norton, inventors of the Balanced Scorecard and the Strategy Execution Premium Framework, as well as a number of leading practitioners to discuss some of the recent trends and developments in the field of performance management.

Here is my initial take on some important development you should be aware of:

Trend 1: Linking performance management and risk management

The realisation that risk management is a flip side of performance management is not new and as you might know I discussed the importance of integrating risk management and performance management in my book 'Strategic Performance Management' back in 2006. So why is it on the list again? The reason for why I see it as a key trend is that more and more organisations are actually linking the two areas more explicitly and an increasing number of software solutions now offer integrated risk and performance management. There is some momentum in the idea and we are starting to see a critical mass of early adopters.

The way I have always proposed to link risk and performance is to look at risk for every strategic objective on your performance framework and develop key risk indicators (KRIs) that sit next to key performance indicators (KPIs) and allow you to assess and mitigate the risks of not achieving your strategic goals. Bob Kaplan presented an emerging framework for risk management in which he categorised risks into

• Category I: Risks from Employees’ Undesirable and Unauthorized Actions;
• Category II: Risks of Not Achieving the Enterprise’s Strategic Objectives; and
• Category III: Risks from Uncertain, Uncontrollable External Events.

He also explored how the different elements of a strategy execution framework could be used to address them: (1) Using values, mission and vision to set clear boundary condition so employees don’t act in ways that are undesirable or unauthorised, (2) identify key risk events and risk indicators for each strategic objective on your strategy map and aggregate the risk indicators into a risk scorecard, (3) use scenario planning, war gaming and tail risk meetings to address the ‘unknown unknowns’ (to re-cite the poetry of Donald Rumsfeld). Actually, the use of scenario planning in scorecard design is something I have explored in my article “The Future Scorecard: Using internal and external scenarios to create strategic foresight”, published back in 2005. As you might find it an interesting read I have put the article up on our website for download: http://www.ap-institute.com/resources_academic.asp I would love to hear from anyone who has successfully aligned risk and performance management – on either of the categories – or is there someone out there that has done it across all?

Trend 2: Creating a strategy and intelligence competency center

Strategy management and strategic business intelligence and analytics require a team that not only has the relevant skills but is structured in the appropriate way. Dave Norton made the point that strategy management requires cross-functional processes and traditionally our structures and competencies are based on functional silos. In order to sustain the management of strategy Dave suggested creating (1) a strategy council, (2) strategic theme teams, and (3) an office of strategy management:

• THE STRATEGY COUNCIL: A team made up of senior executives responsible for oversight of strategy development and execution.
• THE THEME TEAM: A cross organization team empowered to execute the objectives of a strategic theme at an operational level
• THE OFFICE OF STRATEGY MANAGEMENT: A small team of performance management specialists who are responsible for designing and managing the Strategy Management Process objectives of a strategic theme at an operational level.

For me the key is the latter but I would go further than this and not only give them responsibility for strategy management but also ‘strategic insight’, i.e. the BI and analytics capabilities to turn data into insights. Some might remember my blog post on the integration of business analytics with performance (http://theintelligentcompany.blogspot.com/2010/07/business-analytics-merge-with.html) in which I made that point. It is good to see that companies such as Volkswagen, TNT and Merk have put in place the office of strategy management while many others have created BI competency centers. However, it is still rare to see companies that have created a wider strategy management and BI competency center or at least created close links between them. If you have created the link between PM and BI – then let us know!

Trend 3: Linking strategic performance management with leadership and change management

In his foreword to my latest book ‘More with Less’, David Norton gave his personal definition of performance management: “the execution of the organization mission through the coordinated effort of others”. He then went on to say “PM is a system and process that impacts everyone in the organization. You can argue that performance management is the most important job of a manager. In fact, you could argue that the execution of the organization mission is the only job of management.” I whole-heartedly agree to this but still see that many companies use performance management in an administrative reporting or tick-box fashion. In order to ensure that the agreed performance targets and objectives are in fact the focus of everyone’s day-to-day efforts companies have cascaded scorecards down to individual levels and have aligned the achievement of targets with incentive systems and bonuses. In my experience with many of the leading global companies this is still an area that many get wrong. When you hard-wire any incentives to targets you run the danger that people just ‘hit the target but miss the point’. And when you give individuals their own scorecards you often generate a focus on personal performance over team or company performance, which in turn can drive dysfunctional behaviours.
What became clear over the past 2 days was that the softer side of performance management and change management play a key role in getting this right. It is less about creating a system of cascading, reviewing and aligning targets and measures and much more about leadership, inspiration and conversations that engage people on an emotional level.

I believe one trick is to involve HR in the role-out of strategic performance management. Interestingly, in Carlsberg the strategic performance process is owned by HR because they see it as a strategic change initiative and in another of my client companies the delivery of the corporate dashboard is driven by the chief change officer. Bob Kaplan make an important point when he said: “Successful Organizations Need Both Inspirational Leadership and Effective Management, Working in Harmony, Together:”

• Leadership creates the vision and sense of urgency. Leaders communicate, inspire and motivate.
• Management provides the rigor, alignment, and discipline required to implement the strategy and achieve the vision.

In my view leadership remains the most crucial ingredient of any successful performance management initiative. One of the best examples I have personally experienced comes from the perfect balance between leadership and management provided by Sir Terry Leahy at Tesco (download the full case study on Tesco here: http://www.ap-institute.com/resources_casestudies.asp

As always, I would love to hear from you if you feel that in your organisation you are getting this right, or indeed, if you feel the opposite and you are getting it completely wrong…

Grimsvotn: Or why you should take your CEO to the doctor to improve performance and boost intelligence

2011-05-25T02:24:00.000-07:00

Intelligent companies like Google, Tesco, or eBay understand that there is only one reason why they are measuring or reporting anything: To improve performance! Intelligent companies all have leadership teams that value data-driven insights as they know that those will lead to better decision-making and improved performance. Performance improvements can mean boosting profits, increasing effectiveness or taking out inefficiencies. Just to spell it out: when economic times are hard fact-based decision making and performance improvements are not a ‘nice to have’ but sheer necessity to ensure survival.

The Information Gold Rush

Before I explore what Grimsvotnis and how taking your CEO to the doctor can help you improve performance, let me briefly take you back to the 19th century. Think of the California gold rush of 1849. People flocked on mass to that US state with the hope of making their fortunes from unearthing more of the gold that had just been found there. A core tool, or technology, used by these prospectors was a gold pan, which would sift out gravel, sand, sediment etc, but retain the heavier gold nuggets. By panning the endless tons of worthless silt, the prospector hoped to find those few precious nuggets of gold that would make them rich men. Some did indeed become hugely wealthy. But most returned to their homes having either expended their investments without an adequate return (if any) or worse, bankrupt.
Let’s now leave California of 1849 and fast forward more than a century and a half to the end of the first decade of the 21st century. Switching our attention from gold prospectors to business managers, and analyzing how the latter group are attempting to gain insights from their data and management information leads to a disturbing observation – most are behaving in ways that are in reality little different to the gold prospectors of old. Within enterprises today, business leaders are simply expected to pan masses of essentially worthless performance data, with the hope that somehow they will discover those golden nuggets that will provide relevant.

Grimsvotn and the Data Eruption

To explain: Grimsvotnis the name of the Icelandic volcano that is spewing volcanic ash into the air clogging up the skies over the Atlantic Ocean and Europe causing more air travel chaos. Similar to the Icelandic volcano, there is an ever-increasing amount of data erupting into our businesses, clogging up our systems and making it ever harder to find the relevant information nuggets that help you make better decisions. This data explosion is due to a decade or so of breathtaking advancements in information and communications technologies. We now live in a world in which data, in all its forms, can be collected and transmitted simultaneously to large numbers of people across the world by a single click of a button. Moreover, as a result of equally stunning technological improvements in data storage, much of the mass of data transmitted between employees resides somewhere in the enterprise – in databases, computer systems or other devices.

Within most medium to large enterprises the amount of data being exchanged and stored on a daily basis is almost incalculable: as too is its potential value. In the end it is good data that is the core material required for forming those “golden nuggets” of insights that enable the enterprise leaders to make better decisions and so ultimately gain measurable and sustainable financial and other successes. The challenge for most leaders today is to find those “golden nuggets” that are hidden in the massive downpour of the volcanic data eruptions.

Failing to turn data into insights

Despite the rhetoric about the importance of fact-based decision-making and evidence-based management few organizations are deploying practical and reliable processes for unearthing those mission-critical insights. Research into the working practices of most organizations and their managers confirms that the “gold prospector” analogy holds true. Many organizations are content to hoard data, in the mistaken belief that simply having the data available is in and of itself value adding, leaving it up to individual decision-makers to pan for those golden nuggets.

Taking your CEO (and everyone else) to the Doctor

Here is what you can learn from your doctor. In order to get a first impression of your health your doctor usually relies on small number of vital tests and assessments. The medical profession has identified key bits of information such as blood pressure levels, cholesterol levels or your body mass index as essential metrics of your health. This is exactly what is required in our companies, where we need a set of reliable performance indicators that help you understand whether the company is on a successful voyage or whether it is veering off the prosperous path. The right set of performance indicators will shine light on their performance and highlight potential areas of concern similar to the health check indicators your doctor would use.

What’s more, we can learn from the overall approach to fact-based decision making that we would expect from a medical professional. Sometimes when you visit your doctor you are fully aware of what the medical condition is (such as an infection) and the probable cure (such as antibiotics). There are other times, however, where we have a symptom, or range of symptoms, where we are uncertain as to the underlying cause. This might trigger feelings of anxiety and deep concern. When such anxiety is present we rightly expect much more from our doctor than a cursory “once over” and the writing of a prescription. Rather we expect a thorough medical examination that might include a range of relevant tests to rule out critical illnesses (and so allay our worst fears) followed by an accurate diagnosis and an appropriate and effective course of treatment.

Put another way, we look to our doctor to collect all of the relevant and available evidence relating to the symptoms in order to identify the underlying problem and its solution. We would also expect the doctor to assemble this evidence from a range of sources; these might include, as examples, talking to the patient, consulting their medical records, taking blood and/or tissue samples and comparing the findings with documented case histories, as well as making use of the doctor’s own experience and past observations.

Evidence-based medicine and management

Basically, the approach you expect your doctor to follow is one of ‘Evidence-based Medicine’. This approach, which can be traced back to ancient China is, according to the Center for Evidence-based Medicine, “…the conscientious, judicious and explicit use of current best evidence in making decisions about the care of individual patients.”
And isn’t this exactly what we need to do with our data in our organizations? Put into management speak it means we need to find the best and most relevant management information, we then need to analyse it and face those fact before we use the insights to inform our decision making and act on it. While this seems nothing but common sense, we rarely see this approach applied well in the management of companies. For that reason I have developed a simple and easy to follow model that is designed to help managers create a more ‘intelligent’ management approach through better data-driven and evidence-based decision making.

Becoming an ‘Intelligent Company’

Extensive research by the Advanced Performance Institute has identified that there are five essential steps to becoming a more intelligent company:
Step 1: More intelligent strategies – by identifying strategic priorities and agreeing your real information needs.

Step 2: More intelligent data – by creating relevant and meaningful performance indicators as well as qualitative management information linked back to your strategic information needs.
Step 3: More intelligent insights – by using good evidence to test and prove ideas and by analysing the data to gain robust and reliable insights.
Step 4: More intelligent communication – by creating informative and engaging management information packs and dashboards that provide the essential information, packaged in a way that is targeted and easy-to-understand.
Step 5: More intelligent decision making – by fostering an evidence-based culture of turning information into actionable knowledge and real decisions.

These five steps are taken from my latest book 'The Intelligent Company: Five Steps to Success with Evidence-Based Management' in which I discuss and describe the key tools and best-practice skills that top-performing enterprises apply to become more successful.

Here is an overview of each of the steps:

Step 1: Identify the strategic objective and information need
In today’s turbulent, unpredictable markets it can prove immensely challenging to identify the core strategic objectives of an organization. But it is only by doing so that it becomes possible to ensure that the analytics we generate are relevant to the organization’s competitive positioning and support its greatest information needs. Intelligent organisations such as Tesco or Google have created strategic performance management frameworks to guide the collection and analysis of data. Tools such as Balanced Scorecards and in particular Strategy Maps can be used to identify high level objectives. World-leading retailer Tesco has clearly outlined its strategic priorities in a Balanced Scorecard called the corporate steering wheel. Once a performance framework is in place any efforts to use data can be linked back to the strategy of the organisation. That way, organisations don’t waste valuable time analysing something that doesn’t really matter in the grander scheme of things. Any efforts in collecting and analysing data need to be focused on:
(1) The strategic objectives of the organisation
(2) The big un-answered questions in regard to those objectives.
The executive team in Google, for example, has identified the strategic priorities and then formulated a set of questions they as executives really needed to have an answer to. These questions are now used to frame the collection and analysis of data. Google’s CEO Eric Schmidt makes it very clear that any major efforts to collect or analyse data should be linked to the strategic questions the executive team have formulated.
Step 2: Collecting and Organizing the Right Data
Once the data and information needs are clear we can start to collect the appropriate data and performance metrics that, in turn, will help to answer the strategic questions. In this second step organizations ensure that they gather and organize the right data. The emphasis here is on meaningful and relevant data to meet the information needs identified in step one. Organizations need to assess whether the data needed is already held in the organization or how to devise a best way to collect the data. A typical trap is to think of data as just numbers that come from the operational or transactional systems or those that are collected using over-simplified surveys or questionnaires. If organizations want to gain a robust picture of reality then they must keep in mind that data comes in myriad formats - sounds, text, graphics, and pictures are as much data as are numbers. Moreover, there are many methodologies for collecting data, which can be quantitative (in that they are concerned with the collection of numerical data) or qualitative (concerned with the collection of non-numerical data). What I have learnt over the years is that the richest insights seem to come from key performance indicators that e.g. are:
(1) Unique to the organisation
(2) Observing actual behaviour
Take, for example, the insurance firm Progressive Insurance. The company was among the first to make extensive use of consumer credit scores as input to its automobile insurance underwriting. As competitors caught up with this technique the company has always found new and innovative ways of collecting and using data to gain a competitive edge. Tesco is another great example. With its Clubcard data it can now observe consumer trends in almost real time and gain insights quicker and in more detail than any of their competitors.
Step 3: Turning Data into Information and Insights
Data has to be analyzed and put into context in order to extract information and insights from it. In the same way as the data collection, analysis must support the core strategic objectives of the organization (as understood through step one). Central to the analytics process is the running of experiments to test assumptions. A best practice example of organizations that make good use of experiments are Yahoo and eBay. These organizations receive many millions of hits to their home pages each hour. To test new assumptions (in this case that making a certain alteration to the home page will change behaviors of visitors) they randomly assign one or two hundred thousand users to an experimental group and have several million other visitors as a control group. In eBay’s case simple A/B experiments (comparing two versions of a website) can be structured within a few days, and they typically last at least a week so that they cover full auction periods for selected items.
Step 4: Communicating Information and Insights
This forth step focuses on communicating the information and insights extracted in step three. The main focus here is to get the information, in its most appropriate format, to the appropriate decision makers. I always stress the importance of keeping in mind the target audience and their needs when communicating. Even with proper and tailored analysis it is crucial that the visual presentation tools are clear, informative and compelling. We need to package information in ways that help recipients to understand they key messages. Different types of graphs and charts can be used as appropriate, such as pictographs, tally charts, bar graphs, and histograms, scatter plots, line graphs and pie charts, as some examples. Moreover, it is important to use more narratives which provide context and meaning to the data. Using graphs and narrative together enable the telling of the story, which neither can fully do in isolation.
Step 5: Turning information into actionable knowledge
Amassing knowledge, however insightful or compelling, in and of itself is of little value unless it is turned into action. Decisions have to be made and acted upon. Making this happen often requires a wholesale reworking of the process for turning knowledge into action. This oftentimes needs a cultural transformation that might include, as examples, ensuring that:
- the organization has a passion for learning and Improvement
- there is an unswerving leadership buy-in to the principles of being an intelligent company
- there are widespread analytical capabilities within the organization
- there is a willingness to share information

The five sequential steps of this framework provide a blueprint for an intelligent company. However, the logic of good evidence-based decision making is not just linear (from step one to step five) but there is a feedback loop between the last and the first step (from step five to step one). Once learning has taken place and decision have been made they in turn inform future information needs.

Let me know your thoughts...

One in Five avoids Measurement

2011-03-22T02:44:00.000-07:00

I have just stumbled upon a research study that shows how a fifth of people are so reluctant to discover the truth about their weight that they only use bathroom scales to weigh things like their suitcases before they go on vacation or check weights of parcels or their pets - and never actually weigh themselves!

How can we make measurement work in our work places when we even avoid measurement in our private lives. The fact is, we need to face the facts to make better decisions. The survey by the Co-operative Pharmacy of 3,000 people found that many people underestimate how much they actually weigh - only forty percent admitted to being overweight when the real figure is about 65%! No real surprise then that we keep getting bigger as a nation.

So what does this mean for measuring company performance? How about this:

We need to face the facts to understand and improve performance. Other research shows that people who join groups like WeightWatchers tend to loose more weight then those of us who try it by ourselves. Why is this? I think it has to do with the weighings that take place and the support mechanism that they put in place. Why not do the same in your company - put regular and honest review meetings in place in which you look at the facts.

What do you think?

Event: More for Less - Tackling the Efficiency Agenda to Improve Value and Performance in the Public Sector

2011-02-03T07:58:00.000-08:00

Join us at the 4th Annual Conference on Public Sector Performance Management on March 1st in London, UK. The event reflects the challenges of the sector and addresses how to manage performance to deliver more with less. The event will also see the launch of the new book "More with Less - Maximizing Value in the Public Sector" and will report on the brand new study into the 2011 performance challenges for government and public sector organisations. Over 400 public sector leaders took part in the UK study to express their views on challenges and how they could be overcome (you might have seen the article in the Guardian Newspaper:

In his foreword to the study report, John Baillie, chair of Scotland's spending watchdog, the Accounts Commission, says the vast majority of UK public sector leaders are convinced that better performance management will help them improve their organisations and make them more efficient – but adds that there is a massive "skills, practice and leadership gap" that prevents managers turning their mass of performance data into helpful information.

The programme looks exciting, here are the highlights:

* More with Less: The New Performance Challenges for the UK Public Sector (2011 and Beyond)
Bernard Marr, Chief Executive and Director of Research, Advanced Performance Institute and co-author of the new book: More with Less – Maximizing Performance in the Public Sector

* More with Less: Maximising Value in the Public Sector
James Creelman, Fellow of the Advanced Performance Institute and co-author of the new book: More with Less – Maximizing Performance in the Public Sector

* Best Practice Performance Management at the Ministry of Works in Bahrain
Raja Al Zayani, Chief of Strategic Planning and Quality Management, Ministry of Works, Bahrain

* Implementing a Framework to Drive Performance Accountability and Improvement: The Case of Audit Scotland
Diane McGiffen, Chief Operating Officer, Audit Scotland

* Delivering and Improving Patient-Centric Performance in the NHS: Best Practice at the Award-winning Northumbria Healthcare NHS Foundation Trust
Ann Farrar, Chief Operating Officer, Northumbria Healthcare NHS Foundation Trust

* Using Intelligent Data to deliver ‘More with Less’ in the Police: The case of Durham Constabulary
Gillian Porter, Head of Business Strategy and Performance, Durham Constabulary

Not only will you hear from leading experts and practitioners who can share their real life insights, each delegate will also receive a signed copy of the book “More with Less: Maximizing Value in the Public Sector” and the research report.

Here are special offers (why not bring the entire performance team):

1) The early bird booking deadline is extended to Monday 8 February so if you register for a single delegate place on or before 8 February the price is £250 (usual price £300).

2) For teams attending from the same organisation we are offering the following block booking packages:
• Two delegates: £450
• Three delegates: £650
• Four delegates: £825
• Five delegates: £950
• Sixth and additional delegate place @ £125 per person

Book your delegate place(s) now by clicking here:
www.unicom.co.uk/performancemanagement

Alternatively contact Unicom's Augustus Nmelu on 01895 819 475 or email info@unicom.co.uk to request a booking form or reserve delegate places.

Information Overload in Public Bodies: Read my Interview in the Guardian

2011-01-19T01:45:00.000-08:00

The newspaper article reports on the findings of the latest API research into public sector performance and highlights that public services have a wealth of data at their disposal, but it is not used to improve efficiency. "We can't afford to mindlessly collect stuff that nobody will ever use - especially when it makes people do the wrong things"

"This study shows that only by identifying what really matters, and then managing the delivery in an integrated way, based on real facts and evidence, can UK public sector organisations tackle the 'more for less' agenda that will prevail for many years to come."

Read the full article on the Guardian website:

http://www.guardian.co.uk/society/2011/jan/19/public-bodies-useless-data-overload

And download a copy of the full research report "More With Less: The New Performance Challenges for the UK Public Sector (2011 and beyond)" by following this link:
http://www.ap-institute.com/resources_articles.asp

Let me know what you think - is there a 'data overload' problem in your organisation?

New book 'More with Less' becomes 'book of the month'

2011-01-11T09:28:00.000-08:00

My new book 'More with Less - Maximizing Value in the Public Sector' has been selected by the Better Business Focus Magazine as the 'book of the month. You can read a free sample chapter of the book by following this link:

http://www.ap-institute.com/attachments/Sample%20Chapter%20(More%20with%20Less).Pdf

The review in the magazine says:

Public sector organisations in the UK are presented with the most demanding performance challenges in living memory. The recent comprehensive spending review reflected the poor state of the public finances and therefore imposed an era of financial cuts and constraints onto public sector organisations.

"One day a week is wasted by mindlessly collecting and reporting data that is never or rarely used. The core focus of most public sector organisations going forward is to improve (or at least maintain) performance while substantially reducing costs."

Read Sample Chapter of New Book: "More With Less"

2011-01-07T02:45:00.000-08:00

You can now read a sample chapter of my brand new book 'More with Less: Maximizing Value in the Public Sector' by following the link below. The book has already received brilliant reviews.

This is what the Editor of City A.M. had to say about public sector having to do more with less:

AN intriguing book has just dropped onto my desk (and no, I’m not referring to Gordon Brown’s massive self-justificatory opus, which I shall ignore for as long as possible). Called More with Less, it summarises the findings of one of the largest independent studies into public sector performance in the UK to date, conducted by the Advanced Performance Institute. Senior managers from over 400 public sector organisations shared their views on key performance challenges and how they could be overcome.

The findings from Bernard Marr and James Creelman are deeply troubling. Astonishingly, public sector organisations spend about 20 per cent of their time on form-filling, auditing, measuring and reporting performance – yet only a fraction of this is ever used to gain relevant and new insights or to make better decisions that lead to performance improvements. Two-thirds of senior public sector leaders believe that individuals in their organisation occasionally fabricate data.

What this confirms is what many in the private sector have long believed. Public sector productivity – output per worker – has performed abysmally in recent years, but it could easily be increased by at least 10 per cent with better management and incentives. Another way of looking at it is that the public sector could relatively easily produce the same amount of output – including the same amount of frontline services – for 10 per cent fewer costs (and that is only assuming that half the time and energy spent on form-filling is eliminated).

These sorts of savings are routinely pushed through in the private sector; and when that happens companies do their utmost to ensure consumers don’t notice any difference to quality. Yet because of misaligned incentives between consumers and producers in the public sector, we are seeing unnecessary cuts to frontline services and no real revolution in the way the public sector is operated. Because there is no real market, no property rights and no real prices in the public sector, information is limited and processes inherently inefficient. But there are shades of waste and Britain’s public sector ought to be able to become at least a little less inefficient.

More with Less will be published next month by Palgrave Macmillan. Someone should give George Osborne a copy.

Allister Heath, Editor, City A.M.

Here is the link to the free sample chapter:

http://www.ap-institute.com/attachments/Sample%20Chapter%20(More%20with%20Less).Pdf

Hope you enjoy reading it.

New Book: More with Less - Maximizing Value in the Public Sector

2011-01-06T05:49:00.000-08:00

We all know that public sector and government organisations across the globe are facing one of the most challenging environments for decades as they bear much of the costs of the global credit crunch. Across the world public sector purses are shrinking as national Governments pay off the dept of averting global economies from the horrors of depression and deal with the budget deficits caused by reduced tax income during the recession.

Just to let you know that my latest book on government and public sector performance (co-authored with my colleague James Creelman) has just become available in the UK (rest of the world will follow shortly).

In order to cope with the upcoming challenges, perhaps more than ever before public sector leaders need to instill strong performance improvement disciplines into their organisations: discipline that enable these leaders to fully understand:

What key outcomes and priority deliverables they must accomplish

How to allocate reduced financial resources so to make the most positive impact on service levels and outcomes

Where to reduce costs and improve efficiencies without jeopardising service delivery.

In this book we outline how the latest performance management and improvement tools can help to instill a culture of high performance into public sector organisations so they can deliver 'More with Less'.

Emergency targets ditched in favour of performance measures

2010-12-17T08:30:00.000-08:00

I can't tell you what music it is to my ears that finally some of the most stupid performance targets are being scrapped in the UK Natinal Health Service. I have advised the government on this for such a long time and written about it in my book 'Managing and Delivering Performance - How government, public sector and not-for-profit organizations can measure and manage what really matters' and I had already given up hope that it would ever happen.

Great news is that is now has happened and the government has announced today that targets like the four-hour waiting time target in accident and emergency departments and the 19 minute category B response time target for ambulances are to be replaced with a set of “clinical quality indicators” that aim to give a better picture of patient experience. So the focus now is on outcome measures instead of process targets.

From April 2011 providers of emergency services will have to measure performance against eight new indicators but will not be judged against a set of targets.

The indicators are:

Percentage of A&E attendances for cellulitis and deep vein thrombosis that end in admission
Unplanned re-attendance at A&E within 7 days of original attendance, including if referred back by another health professional
The percentage of people who leave the A&E department without being seen
Total time spent in the A&E department
Time from arrival to start of full initial assessment
Time from arrival to start of definitive treatment from a decision-making clinician
Percentage of patients presenting at type 1 and 2 A&E departments in certain high-risk patient who are reviewed by an emergency medicine consultant before being discharged.
Qualitative description of what has been done to assess the experience of patients using A&E services, their carers and staff.

What’s more and something I have again argued for is that provides are free to develop their own way of assessing qualitative experience. This is hopefully a big leap into the right direction to make the management of performance relevant and meaningful…

The Top 3 Enterprise Performance Concerns of Executives

2010-11-08T07:36:00.000-08:00

I have just had the great pleasure of hosting a dinner for a select group of 25 executives from industry and government to discuss the latest issues and concerns in regard to enterprise performance. In the lovely surroundings of a private dining room at Gordon Ramsay's Michelin Starred Maze restaurant in London, and over some stunning food and excellent wine, we explored the top challenges leaders in business and government are facing at the moment.

Here is my take on the top three concerns that I would like to share with you.

The Economy and Delivering More with Less

The one issue on top of everyone’s mind that night was the economy. While recession seems to be behind us (we hope!) recovery is very slow for most industries. At the same time consumer expectations seem to be rising all the time. Executives from industry were expressing concern that the lean times are continuing and only little light was visible at the end of the dark tunnel. Many were still seeing dark clouds brewing over the horizon and there was uncertainty on whether these will just pass over or whether there will be more storms to come.

Executives were in agreement that this was a time when they had to focus on what matters most to customers. Identifying the key value drivers and then optimising processes to deliver these in the most effective and efficient was the priority. Many warned of the dangers of generic cuts or cost saving initiatives across the organisation. Instead it was seen as important to focus on real value drivers and optimising those, which sometimes even means investing more money.

When it came to government and public sector leaders, the discussion was similar: The need to focus on the things that actually matter to citizens. However, the public sector representatives were much more concerned with possible service deterioration and their prognosis that in the future they could only deliver ‘Less with Less’. It was interesting to see them talk with their commercial counterparts and realise that the commercial sector has just been through difficult times similar to those the public sector is about to enter.

Cultural challenges and lack of ‘intelligence’

One of the themes that came up strongly during the discussion across sectors was the lack of buy-in or the lack of recognising the importance of good quality data. Everyone felt that their companies had masses of data but was struggling to really make best use of the data to inform strategic decision making. Everything I talk about in my book ‘The Intelligent Company’ was still very relevant:

· Executives wanted better data and better awareness of the importance of data quality at the data collection stage

· Executives wanted better analysis in order to turn they data they already had into mission critical insights

· Executives wanted better, more relevant, and more real time performance reporting

· Executives realised that more top-level sponsorship of fact-based decision making was necessary to create a culture in which good data leads to improved decision-making and better performance across all levels of the company.

Getting the data and measuring what matters

The one challenge that stood out was getting the data for the things that actually matter the most. Many executives felt that while they had tonnes of data they were still ‘flying blind’. One actually said that all the performance reports would cloud the clear view out of the window; that the data would often obscure the view of the road ahead rather than improve the view. The reason for this was that they felt it was difficult to measure and collect data on the really important and interesting issues. The data they were reporting was often the same data everyone else was collecting so not providing any critical and new insights.

When we were discussing this one issue that came up ‘hard’ versus ‘soft’ data. There is still a lot of mistaken belief out there that ‘hard’ data is better and can only be collected through large scale surveys and data collections. Soft data or subjective data based on people’s opinions in not seen as valid or useful. I believe that this is really dangerous ground. Instead of discarding soft evidence we should embrace it. In my experience with some of the world’s most successful companies I find that well constructed metrics that rely on good professional judgement are not only easier and simpler to collect but usually massively more insightful. However, we have to balance (or triangulate) our soft evidence with harder evidence, preferably from independent sources, to ensure our picture of reality is true.

What are your thoughts on these performance management challenges? Let me know…

Bernard

Article in The Times

2010-08-16T02:38:00.000-07:00

I've been asked to write another piece for The Times, this time on business outsourcing and performance. My article 'Ten top tips for business outsourcing' summarises the key things to consider when contracting out parts of your business. The tips are designed to ensure outsourcing will result in great performance improvements and cost savings - something high on the agenda for most companies and government organisations at the moment.

Times

The tips include:

Remembering that the only reason for outsourcing anything is improved performance (saving time, money; improving focus; reducing risks; or improving customer service)
Being able to measure success but not relying on over-simplified service level agreements (SLA's) to do that job

You can read my article by following this link:
http://www.ap-institute.com/attachments/Ten%20top%20tips%20for%20business%20outsourcing.pdf
or as always by visiting the resources section of the API website:
http://www.ap-institute.com/resources.htm

Business Analytics merge with Performance Management

2010-07-15T05:17:00.000-07:00

The coming together of functions such as performance management, business intelligence, knowledge management and analytics is a phenomenon that seems to gather pace in many companies. And when you think about it - this makes a lot of sense as each of these functions is concerned with turning management information into insights that enable better decision making.

We have just finished a project for one of our client for which we created an integrated strategy bringing together corporate performance management, business intelligence, analytics, knowledge management and data warehousing into one function. As part of this we have created an integrated team, headed by the chief intelligence officer (who reports directly to the CEO), that brings together the various data and analytics functions of the firm into one powerful business unit.

I have written in a number of my books and articles about the increasing need to integrate these different functions to create a business intelligence unit that is in charge of all management information and analysis. It is my view that successfully integrating the various data and information functions in a firm holds the key to becoming a truly intelligent company. So if you want to unlock the full potential of your data then start merging these functions.

I would love to hear from you if you have successfully integrated these functions in your company or if you are planning to do so.

More soon,
Bernard

Creating a Vision and Mission Statement

2010-06-10T09:05:00.000-07:00

I've been asked by the editor of Qualtiyworld to write a short piece on how you develop a company's vision and mission. Here is a quick summary:

Intelligent companies use mission and vision statements as powerful sign-posts that provide clear and succinct directions about the purpose and aspirations of the company. However, this will only the case if they are real and not just boring platitudes iterated by successive chief executives that say much the same things that other firms expound.

A mission statement articulates the organisational purpose, basically why the company exists, what id does and for who. Mission statements serve as ongoing guides that provide clarity and focus on a day-to-day basis. Loot at Google's mission: "Organize the world's information and make it universally accessible and useful."

A vision statement outlines the goals and aspirations for future results. It creates a mental picture of a specific medium-term target and is as a source of inspiration. Wal-Mart's vision was: "To become a $125 billion company by 2000" and the JFK Memorial Hospital's vision is "To be the first choice for health and medical services for residents in the Eastern Coachella Valley".

In reality, mission and vision statements are often a muddled stew of goals, values, aspirations, philosophies, strategies and descriptions.

A good way to start the process of creating vision and mission statements is by asking key people in the organisation to answer these two questions:

What is the core purpose of the organisation? What do we do and for who?

Where do we want to be in 5 or 10 years time? What are our aspirations?

You can then take the answers from these questions and draft something that can be discussed and finalised in a meeting.

As another element of strategic boundaries don't forget the values statement which articulates the desired behaviours...

For more check out the Qualityworld magazine:

http://www.thecqi.org/knowledge-hub/qualityworld/

Article in THE TIMES

2010-06-08T06:55:00.000-07:00

Have a look at my article that has just been published in THE TIMES. My 1400 word contribution discusses the performance consequences of lean and six sigma approaches. The points I am trying to make include the fact that these process improvement techniques can have massive pay offs but only if they are driven from a high-level strategic performance perspective

In my article, which focuses on the defence sector, highlights how powerful the approaches can be in generating effectiveness and efficiency gains – an important message during times of large budget deficits and a focus on cost cutting and waste elimination. What I found is that the US defence sector and in particular the army and navy seem to have implemented it very well. While in the UK there are many lean activities going on but the starting point is often the lowest hanging fruits and not the big cross-departmental strategic issues. It often targets the low hanging fruits instead of the big ticket items with the biggest savings potential.

A key difference between the US and UK is the outspoken support by senior management in the US who are pushing it and actually mandating it...top level commitment goes right to the top with the appointment of a chief performance officer by President Barak Obama...

Another common problem is that process improvement initiatives become institutionalised and end up as onerous admin processes where the focus is on e.g. getting a targeted number of people trained up in green or black belt certification ... and were trained green and black belt teams search for one low-hanging fruit after another, without ever moving to a more strategic level. The danger is that lean and six sigma become wasteful processes in their own right instead of common sense approaches to improving efficiency and effectiveness.

Have a look at my article and let me know what you think:

http://np.netpublicator.com/netpublication/n87976870

Using the Balanced Scorecard to Improve Quality

2010-06-07T11:51:00.000-07:00

See how implementing the Balanced Scorecard has helped the Chartered Quality Institute to better focus on its strategic priorities and to more effectively manage the business. This latest API case study is a great example of a Balanced Scorecard that includes:

A strategy map (with strategic themes and a finance perspective that runs parallel to the other 3 perspectives)

A heat map

Key Performance Questions

Key Performance Indicators

Aligned strategic initiatives

Aligned risk management

Aligned performance review meetings

Download it from our resources section:
http://www.ap-institute.com/resources_casestudies.asp

For me a great best-practice example, let me know what you think.

How can Balanced Scorecards help Public Sector Organisations to cope with the funding shortfalls?

2010-06-04T04:13:00.000-07:00

All of us have an interest in public services and the fact that they are delivered effectively and efficiently. In the end we are all consumers of government services and at the same time funders of the system.

An ever-growing number of leading government and public sector organisations are successfully using the balanced scorecard to drive their performance agenda, deliver better value, reduce inefficiencies and make real performance improvements.

'Public sector leaders juggle budgets to cope with unprecedented funding shortfalls'

‘Public sector expenditure under intense scrutiny'

‘Calls for greater performance accountability and transparency within the public sector'

Let’s face it, these headlines are nothing new. However, it is now clearer than ever, that public sector leaders will need to instil proven performance management disciplines within their organisations to cope with these growing demands from stakeholders and citizens.

I have just completed a report published by the Ark Group on Balanced Scorecards for the Public Sector. This has been written to provide public sector managers with a thorough understanding of how this powerful management tool can rapidly improve performance and efficiency within their own organisation.

Packed with real-life examples and following a step-by-step logic, it sets out a best-practice framework to enable you to build and deploy a balanced scorecard system within your organisation, revealing the necessary measures and actions required to help you:

Identify and communicate strategic priorities and key outcome deliverables;
Maximise your financial resources;
Drive accountability into your organisation;
Instil greater performance transparency; and
Create a strong learning and improvement culture.

My aim was to provide practical tools and templates within the report to ensure your performance information is collected, reported and discussed correctly leading to tangible performance improvements. I also highlight some of the key implementation challenges addressing cultural, structural and technological issues and advice on how to overcome them to ensure your implementation is a success.

If you follow this link you can now download a sample chapter, the executive summary and the table of content: http://www.ikmagazine.com/xq/asp/pubid.5463F878-C7B7-4BB1-ACB5-276AEAAA142D/qx/Publication.htm

How is social media changing the way we measure performance?

2010-06-02T03:15:00.000-07:00

Social media phenomena like tweeting, posting or blogging have transformed the way we communicate with each other. The big question is whether it is also changing the way companies measure their performance. And the answer is a resounding YES, but to what extent?

Applications like Facebook, MySpace, Twitter, YouTube, Blogger or LinkedIn have transformed internet users from a passive audience to active participants who take part, provide feedback, initiate discussions and share their opinions. This level of engagement can be used to measure many aspects of performance including customer satisfaction, employee engagement, brand perception, etc.

Let’s look at some examples:

If you don’t know Trip Advisor yet, then check it out www.tripadvisor.com. As a family we basically book any holiday based on the comments people leave on this powerful portal. With over 35 million traveller reviews and opinions it is a rich source of insights about what hotels and resorts are really like (and you get great insider tips before you even leave home).

What I find shocking is how so many hotels can still ignore the opinions people leave there because it is not only a free customer opinion survey but one where the results are free for everyone to see. If a hotel is serious about understanding what customers think then Trip Advisor is a fantastic source of information and insights.

I have worked with a number of hotel chains recently and in all cases have we made social media applications a central component of measuring and managing performance. Just think of the Sheraton Group who now mandates that hotel managers regularly read the feedback on Trip Advisor and comment on negative feedback (another powerful function). I don’t know about you but I am much more likely to book a hotel where managers have reacted to negative comments, apologised for the poor service and explained what they will do to make it better in the future. This gives me confidence that the management is actually interested in understanding the customer and improving service.

The other day I stayed in the Park Plaza hotel in Cardiff and was impressed by the way they have taken this on board. They now publish the Trip Advisor score on their own website. Brave on the one hand, but powerful reminder of the importance of delivering superior service on the other. Here is their site: http://www.parkplazacardiff.com/reviews/

Another great example comes from the German car giant BMW. They realised that using traditional mail-based surveys to collect customer feedback is very slow and response rates are low. Once they release a new car they want to know straight away what we think and don’t want to wait for weeks to receive back any hard-copy surveys. Now they don’t have to wait any more as they are using the social media sites to monitor what people think. Their experience shows that people use these sites to share their views straight away and what’s more, they do this by themselves without the need of a survey. BMW is now sponsoring some of these sites to ensure customers are getting the information, photos and videos they want and that the discussions are giving BMW the insights they are after.

Check out BMW’s facebook site: http://www.facebook.com/BMW a twitter blog: http://twitter.com/BMWBLOG or their LinkedIn profile: http://www.linkedin.com/companies/bmw

Just think of how your company can use social media to measure its performance. Many applications such as LinkedIn or Facebook have even got inbuilt survey facilities...

Do you know of other examples where companies are using social media applications to measure performance? Do you have other ideas of how they could or should do that?

I am writing a white paper on this topic and would love to hear your views. Let me know...

All the best,

Bernard

Are you prepared for the cuts?

2010-05-25T04:34:00.000-07:00

Government organisations across the world are asked to cut costs to deal with budget deficits. Intelligent organisations are using their performance frameworks to help them make the difficult decisions. A well designed performance framework articulates what is core to the organisation and what isn’t and it helps to facilitate a dialogue about what can be cut, outsourced or even developed into a income-generating service.

We have recently added a number of case studies outlining how government bodies have done exactly that. The most recent addition to our case study library is an up-dated case study on how Belfast City Council is using their performance management framework to manage the delivery of its strategy.

You can check out their corporate plan at: http://www.belfastcity.gov.uk/publications/CorporatePlan2009-2010.pdf

The full case study can be downloaded at: http://www.belfastcity.gov.uk/publications/CorporatePlan2009-2010.pdf

Hope this is useful,

Bernard

Mapping your way to success

2010-05-20T08:28:00.001-07:00

If you want to be successful in agreeing priorities and executing your strategy then map it! A lot of research has shown that in companies that have a meaningful strategy map people tend to understand the strategic priorities much better and are therefore much more likely to help deliver against what matters the most. In addition, companies that map their strategy tend to have fewer and more aligned strategic objectives and tend to collect more meaningful key performance indicators. Above all, those companies that have a strategy map perform better!

We have just added two new case studies to the API resources library that illustrate the power of mapping your strategy.

The first one comes from Audit Scotland, the nation's independent auditor of public bodies, who was able to distill the long stakeholder wish-list down to a simple and focused strategy map. Outlining the strategic priorities on just one page using simple language has completely transformed the way Audit Scotland is managing its performance to ensure external accountability and internal performance improvements. Check out their corporate plan which is completely designed around their strategy map: http://www.audit-scotland.gov.uk/docs/corp/2009/as_09-12_corporate_plan.pdf

The second case study comes from another regulator: the Regulation and Quality Improvement Authority (RQIA), which is the health and social care regulator for Northern Ireland. Check out their corporate strategy document, again, everything is based on their strategy map: http://www.rqia.org.uk/cms_resources/RQIA%20Corp%20Strat%20V1%202%2018%20May%202009.pdf

Both in-depth case studies are now available on the API website:

http://www.ap-institute.com/resources_casestudies.asp

Enjoy!

Bernard

Boycotting bad performance measurement?

2010-05-01T02:28:00.000-07:00

I have often highlighted the fact that bad measurement leads to bad and unintended consequences. This dark side of performance measurement has just led to a boycott of exams in schools. Members of the union of head teachers in England have just voted to boycott this year’s SATs (Statutory Assessment Tests). This testing regime was introduced by Government across all schools to measure learning progress o f year 6 pupils. Off course, measuring progress of kids in schools is important and we all want some assurance that schools are doing a good job. The problem is that the SATs results are used to measure both – children’s progress and school performance. In fact, the results will be used to produce school league tables with are published. The ranking of schools in league tables is important for the school’s reputations and parents will use these rankings to decide which schools to choose for their kids.

Using one measurement, in this case the SATs test, to measure both leaning progress in kids and teaching performance is schools is bad practice because it puts a lot of pressure on teachers to make sure the kids in their class pass these exams. This has led to a situation where teachers pressure kids and parents into a relentless practice routine to ensure kid do well in the exams. In some schools two third of class time is taken up ‘drilling’ kids by relentlessly practicing to pass these tests and sitting mock tests. This is crazy during a time when kids should be made to enjoy learning. Instead of focusing on learning, everyone focuses on passing these tests.

In many of my books I have explored the danger of mixing the purpose of measurements and how it can lead to unintended consequences. I very much agree with the head teacher’s union that it would be a good idea to rethink the way we run these tests in England. One suggestion and a practice already successfully done in other parts of the UK (Wales, Northern Ireland, Scotland) is to replace these tests with a much richer assessment of pupil’s progress by teachers.

I wish more people would be brave enough to boycott bad measurement and targets introduced by Governments across the world. Measures are often introduced for the right reasons but the way it executed is often amateurish. Let me know other bad measures we should boycott!!!

Managing performance at the highest level

2010-04-13T12:16:00.000-07:00

Often the responsibility for managing performance falls with functions such as finance, accounting, and quality or with dedicated performance analysts or mangers. However, unless board members are fully engaged in the activities of managing performance the role of performance management will be relegated to a back-office type function. Read how one organisation has successfully engaged the board to drive and improve performance.

Let me make it very clear, ensuring effective strategic performance delivery is THE responsibility of boards. Effective boards make sure that the appropriate performance frameworks are put in place and that they receive meaningful information with which to monitor the delivery of the strategic performance objectives. This sits in stark contrast to what I often see in practice where board members are bombarded with lower-level performance information that does not give them one smidgen of useful strategic insight. As a result, the discussions around the board table, which should be strategic, very quickly sidetrack into the minute operational detail. Somewhere board members shouldn’t spend any time at all.

Have a look at the latest API case study which shows how one leading organization has succeeded in creating an effective board that focuses on strategic decision making and performance improvement. The case study illustrates the vital role board members play in managing organisational performance and how to closely engage them in the processes and practices of performance management.

Read ‘The Role of Board Members in Strategy Execution: How an Effective Board helps to Drive Performance’: http://www.ap-institute.com/resources_casestudies.asp

Why Tesco is an 'Intelligent Company'...

2010-03-05T02:36:00.000-08:00

Tesco has become the second most powerful retailer on the planet. This has not happened by chance but through applying the principles of an intelligent company.

Tesco have identified two factors above all: making sure everyone in the company is actively engaged in trying to improve performance - all the time; and having the data and analytical skills to test ideas and turn insights into customer and business relevant actions.

Sir Terry Leahy, Tesco's Chief Executive Officer, puts it in simple terms: "never stop listening to your customers and giving them what they want". This Tesco philosophy is captured in the phrase 'Every Little Helps' and which is more than just a slogan: "Every Little Helps is behind everything we do. It's not just something we say, we really do mean it."

To guide their measurement and analytics activities, Tesco has adopted the Balanced Scorecard. The Tesco Balanced Scorecard, which they call the Corporate Steering Wheel, clearly outlines its strategic priorities. With the performance framework in place, any efforts to collect and analyse data can be linked back to the strategic objectives of the organisation. That way, Tesco doesn't waste valuable time analysing something that doesn’t really matter in the grander scheme of things.

Sir Terry Leahy believes that: "having objective across five perspectives allows Tesco to be balanced in its approach to performance...the Steering Wheel creates a shared language, a shared way of thinking and a common blue print for action".

If you want to read the full case study then you can download it from the resources library on the API website: http://www.ap-institute.com/resources_casestudies.asp

What is an 'Intelligent Company'?

2010-02-09T06:25:00.000-08:00

Today’s most successful companies are what I call 'Intelligent Companies'.
Intelligent Companies bring together tools such as Enterprise Performance Management, Business Intelligence, Analytics, Key Performance Indicators, Balanced Scorecards, Management Reporting and Strategic Decision Making to generate real competitive advantages. They continuously collect and use the best available data to inform their decision making.

However, as information and data volumes grow at explosive rates, the challenges of managing this information is turning into a losing battle for most companies and they end up drowning in data while thirsting for insights. This is made worse by the severe skills shortage in analytics, data presentation and communication.

In my new book 'The Intelligent Company: Five Steps to Success with Evidence-Based Management' I discuss five key steps to becoming an Intelligent Company.

Here they are:

Step 1: More intelligent strategies – by identifying strategic priorities and agreeing your real information needs.
Step 2: More intelligent data – by creating relevant and meaningful performance indicators as well as qualitative management information liked back to your strategic information needs.
Step 3: More intelligent insights – by using good evidence to test and prove ideas and by analysing the data to gain robust and reliable insights.
Step 4: More intelligent communication – by creating informative and engaging management information packs and dashboards that provide the essential information, packaged in a way that is targeted and easy-to-understand.
Step 5: More intelligent decision making – by fostering an evidence-based culture of turning information into actionable knowledge and real decisions.

3rd Annual Public Sector Performance Conference

2010-02-09T06:12:00.000-08:00

Hi there,

The 3rd Annual Public Sector Performance Conference is coming up shortly and followers of this blog are getting a special rate if you haven't yet booked. Just mention 'API' when you book and attend for just £99.00!!!

Following the two previous years’ successful conferences “What’s the Score in the Public sector: Rethinking the Way we Manage and Measure Performance” in 2008 and “Managing, Measuring and Improving Performance in the Public Sector” in 2009, we are delighted to announce the 2010 date for the UK’s most focused public sector performance event.

The whole of the public sector is under increasing pressure to deliver more for less - delivering and demonstrating better value and improving performance is at the core of this. In order to do so, organisations need to agree on strategic priorities, collect meaningful performance indicators, and manage what matters to achieve better results. The problem is that many performance measurement and performance reporting regimes currently in place are not delivering the full benefits. Instead of improved performance, the application of these tools often leads to frustration and even dysfunctional behaviours.

In many organisations performance management is causing fear, anxiety, a lot of additional work and often counter-productive behaviours. This conference is designed to open people’s eyes to the main pitfalls of incorrectly demonstrate better value so as to improve their own performance and to cascade that applied performance management tools and provide them with practical tools and guidance to overcome such pitfalls.

Some of the key benefits for delegates attending this conference are that they will learn about:

How to gain maximum benefits from performance management initiatives.
How to agree on strategic outcome priorities taking into account the views of key stakeholders.
Best practice examples and real life implementation experiences from leading organisations.
Implementing balanced scorecards and performance management frameworks in public sector organisations.
Identifying and mapping drivers of performance improvement.
Designing and using meaningful performance indicators and targets.
Best practice performance reporting to inform strategic decision making.
Creating a performance driven improvement culture across the organisation.
Evidence-based management in the public sector.
Avoiding dysfunctional consequences of performance management.
Findings from the latest research on the topic from across the world.
Aligning and cascading performance management across the organisation.

Hope to see you there,

Bernard

What is an "Intelligent Company'?

2010-01-28T03:49:00.000-08:00

Today’s most successful companies are what I call 'Intelligent Companies'. Intelligent Companies bring together tools such as Enterprise Performance Management, Business Intelligence, Analytics, Key Performance Indicators, Balanced Scorecards, Management Reporting and Strategic Decision Making to generate real competitive advantages. They continuously collect and use the best available data to inform their decision making.

However, as information and data volumes grow at explosive rates, the challenges of managing this information is turning into a losing battle for most companies and they end up drowning in data while thirsting for insights. This is made worse by the severe skills shortage in analytics, data presentation and communication.

In my new book 'The Intelligent Company: Five Steps to Success with Evidence-Based Management' I discuss five key steps to becoming an Intelligent Company. Here they are:

Step 1: More intelligent strategies – by identifying strategic priorities and agreeing your real information needs.

Step 2: More intelligent data – by creating relevant and meaningful performance indicators as well as qualitative management information liked back to your strategic information needs.

Step 3: More intelligent insights – by using good evidence to test and prove ideas and by analysing the data to gain robust and reliable insights.

Step 4: More intelligent communication – by creating informative and engaging management information packs and dashboards that provide the essential information, packaged in a way that is targeted and easy-to-understand.

Step 5: More intelligent decision making – by fostering an evidence-based culture of turning information into actionable knowledge and real decisions.

More on each of these steps soon...

Bernard