Frank Buytendijk Blog

Recently I attended my first live Rugby Union match, visiting my colleague and rugby fanatic Nigel Youell in the UK. I have to fully define the game as Rugby Union as I have learnt there is also Rugby League and there is considerable rivalry between the two. So, armed with the knowledge that the ball is usually kicked forward but can only be thrown backwards I travelled to the beautiful UK city of Bath. We were to watch Bath Rugby play London Wasps in the Guinness Premiership!

As the game progressed and I realised that it would take me many hours of watching to fully understand the rules but one aspect of the game stood out and made me think about how performance management is played out in many businesses. I was struck by the fact that while each player has a specific position and role in the team they all adopted the multiple positions and roles as required of them by the flow of the game. They can be anywhere on the pitch and can be defending or attacking and, can even adopt a very specific role usually undertaken by another player because that player was not in the position to execute his role.

How different performance management is structured, where people are supposed to have a single role and related set of responsibilities. What if you are in the position to make a difference, but it’s not entirely your role? Say ‘oops’, step back and let the ball go? But what more can we do in a traditional environment? We don’t have the information to act in the right way.

Performance Management should not be seen as a hierarchic exercise where information is spread on a ‘need to know’ basis. Let me withdraw that statement. In fact, let’s redefine ‘need to know’. Managers and professionals need not only to know what their contribution and role is, they need to know what the role of others is as well, so they can actively contribute.

I think it is important to separate person and role. People can assume multiple roles. In reality most people do. When visiting a party and discussion the company you work for, you assume a marketing role. When approving expenses, you assume a financial role. When hiring a person, you assume an HR role. Whenever you visit a customer, you assume the general role of representing your company. Am I suggesting everyone should have all information? I am not. We can’t be experts in everything. I am suggesting though that if you act in a certain capacity, you should have the right information available. You can group information around roles, but you shouldn’t group information around people. In database terms: role and people have a many-to-many relationship, not a one-to-many relationship.

As with business there are winners and losers and Nigel wanted me to make it clear that in this match his team, Bath Rugby, were the winners with the final score of 22-14!

While I am writing this, I am flying back from visiting Oracle Open World in Japan. I have spoken with many customers, and it strikes me that many of them have the same question. How have other Global organizations implemented BI and Performance Management? How have they overcome a certain problem? How can we close the gap that we have?

First of all, this assumes that there is a gap. Although there is certainly room for improvement - there always is - I didn't think the companies I was speaking with were doing a bad job at all. Not better or worse than elsewhere in the world at least. The recent EPM Index study we recently did in NA and EMEA showed a score of 5.13 out of 10. And if I could take a stab at the level of maturity in Japan, I would rate that in the same category. 5 means lots of opportunity to work on, but also half-way there already.

Second of all, and more serious, the line of reasoning assumes that best practices in the West can be copied in the East. I doubt that. Michael Porter repeatedly said that in his eyes most Japanese companies do not have a strategy. That is quite a statement. Maybe what he meant to say was that most Japanese companies do not fit in his framework? A good theory is characterized by the clarity of its boundaries. Perhaps strategy theory is not universal? What a surprise.

I think in adopting BI and performance management there are three things to consider: management style, implementation practices and software.

The dominant style in Japan is very different than in other areas around the globe. Decision-making processes are much more bottom-up, a.k.a emergent strategies. The role of top-management is to provide council and to guide the process. Compare this to the West, where strategy formulation is seen as the responsibility of top management and then rolled out to the rest of the organization. In the West, strategy is seen as the big picture. In the East, strategy is a process of continuous improvement. OF COURSE the Western style of performance management isn't adopted in Japan,

Honestly, I don't think software is the issue. It can be used in many different ways. I think the real issue is that the implementation best practices do not take different cultures and styles into account. What is needed is a way of describing different styles and culture, and then derive an implementation style from that. I have done some preliminary work in this space as part of my book "Performance Leadership", but by far not enough.

Do you have experience in this field or do you have any suggestions? Let me know.

A few weeks ago, I traveled with my family to Germany. We decided to fly. Due to the status I have on one of the airlines, I am allowed to make use of the business class line at security, also when flying economy. Although no one else was in line, the guy checking my ticket sent me back to the long line for economy class. My wife and children did not have that status. This while 4 security people, let me repeat this: four people, in the business class security people were just standing there, doing nothing, watching the overly crowded economy line. "the rules, sir". The rules, where would we be without the rules.

It reminded me about what I heard about Southwest Airlines. One of the most important performance indicators is "turnaround time", who fast planes can leave again after landing. Southwest realizes this and put NO strict rules and processes in place for the ground staff in place, other than the guidance how important it is. The company lets the ground staff deal with the situation at hand, as the staff sees fit. You can guess the result: excellent turnaround times at the gate.

Back to the airport where I was at. What would be the result if the security people would open up the business class line if there is availability:
- less queues, higher flow, higher customer satisfaction
- lower cost of security, because of better resource load balancing at the line
- more time for shopping at the airport, improving sales and profitability
- no negative impact on security, the procedure stays the same
- better job satisfaction for security people, because they are empowered to make a difference.

Where would we all be without these senseless rule? In a better place. Less rules, more performance. Performance is about people making the right decisions.

frank

We just published the fifth issue already of the Journal of Management Excellence, and you can download it here.

The theme is "creating value", like the theme of issue #4 as well. The topic has so many facets, it was impossible to deal with them all in a single issue. In fact, as creating value is the bottom line for Enterprise Performance Management, we could continue to fill the JME with the same theme for many issues to come.

The following numbers are important in reading JME#5: 2.4, 5.13 and 3.

2.4 is the number of times that world-class EPM companies outperform others in terms of equity market return. I wouldn't dare imply causality: if you adopt EPM, your return improves. However, the correlation is striking. There are many possible explanations. For example, EPM helps you take or maintain control and this improves return. Alternatively, a good return enables you to invest in EPM much more. The article from Tom Willman, from The Hackett Group, indicates that this explanation is less likely. A third explanation is simply having good management explains both the success with EPM as well as a higher return.

5.13 (on a scale of 1 to 10) is the score of Oracle's first EPM index. Steve Walker provides some commentary around the most important findings. Jim Franklin introduced the concept of uncertaintly management in JME#1, and now revisits the topic. Tony Politano describes how analysis chains can help create value. Ron Dimon of Business Foundation, has contributed a very detailed article on how to build the business case for creating value with EPM and Mark Conway provides an overview of industry insights, as he does in every issue.

What about the number 3, you ask? The number 3 is the number of articles that partners and industry experts contributed to this JME issue. Next to the outstanding contributions of The Hackett Group and Business Foundation, Wayne Eckerson, the director of research of TDWI, wrote a guest commentary on build versus buy, and how both can create value.

Cranfield University School of Management, Balanced Scorecard Collaborative, CapGemini, Deloitte, Decision Management Solutions, The Hackett Group, Business Foundation, TDWI.

This is an impressive list of contributors over the last five issues, and I'd like to see it grow even more. Interested in contributing? Let me know.

frank

On the 24th and 25th of june, the UK Oracle User Group is organizing a conference on business intelligence and enterprise performance management. The agenda is driven by the users, and features some extremely interesting case studies, such as Newmont Mining (Strategic Finance and Planning), Old Mutual (Financial Consolidation), BUPA Care Homes (OLAP), and many more. Furthermore there will be Roadmap Sessions, and lots of technology sessions with tips and tricks.

This event is probably the most comprehensive conference for Oracle BI and EPM users in Europe, and it is being held at Twickenham Stadium in the UK. More information here.