If you cannot measure it, you may be in trouble!

June 17, 2015

weights and measures‘If you can’t measure it, you can’t manage it’ is a refrain that managers often hear but do not fully appreciate until confronted with a major challenge such as the complexity of a business transformation programme.  The need to diagnose the problems, stop the rot and prescribe timely and effective treatment, often quickly overwhelms management that is more used to reactive management of day to day events.

Driving through the strategy should be the focus of all management.  Performance management enables managers to maximise and sustain corporate performance by measuring and managing the drivers of future profitability.  Those drivers are what a business should invest in now to sustain and improve performance. The start point must be to quickly establish the necessary disciplines and approaches for the design and implementation of an effective management information system.  Such systems must comprise not only the key performance indicators (KPI’s), but also the execution management skills and processes to use them effectively in achieving operational and strategic objectives.

Silo’d Confusion

An organisation’s efforts to develop effective management information systems are often hampered by confusion caused by factors that include a one-dimensional, simplistic view of the problems.  For example:

  • The finance view‘All we need to do is supplement our financial information with a range of non‑financial          measures.’
  • The IT view – ‘All we need is a data warehouse and interrogation software to exploit the operational data.’
  • The management view‘All we need are better managers and staff.’
  • The staff view‘All we need is a business strategy and effective management.’

All these views may be valid, but the inter-relationships and dependencies between them are not identified and so critical thinking is impossible.  The absence of a universally accepted discipline for management information, similar to that for accounting which underpins the development and integrity of financial information, means there is limitless scope for confusion and paralysis.

A disciplined and structured approach to developing a performance management system must address the execution management processes, training and personnel issues to make effective interventions and encourage appropriate behaviours.

The Performance Measurement Framework

Business managers inhabit a practical world of reacting to day to day operational issues.  They may not haveThe Performance Management Framework the time nor interest in relating the management theories and measurement concepts that underlie the design of a performance management system.

The Performance Measurement Framework model links business objectives to the interventions needed to manage their achievement and gives managers a key to relating the concepts with the practical steps they can immediately take to develop their own performance measures.

The framework model is structured as a sequence of provocations linking business objectives with performance measures.  The performance measures feed the performance management process to actively manage the business on timely actionable intelligence.  Each of the provocations is addressed by practical approaches and quality assured by the pre-determined design principles.

The design principles reflect the values and behaviours that an organisation wishes to embed in all aspects of its structure, processes and relationships.

The Performance Management Process

A performance measurement system is often described as a ‘dashboard’, similar to that of a car.  Taking the analogy further, the performance management process ensures that the driver is sitting in the driving seat, knows how to drive and where he is going!  As with a car, the driver must plan the route and fuel the car, monitor the journey and take control with appropriate actions to ensure a safe and timely arrival.  Managers use just such a cycle to ‘drive’ through the business strategy.PerfManProc

The Performance Management Process is one of the tools Blue-Plate uses to support the KeyneLink Strategy Execution Management approach, and enable managers to visualise and understand the component parts of the process.

This conceptual understanding is a prerequisite to equipping managers to design and implement a performance management process that is appropriate for their organisation.


Bloomington, Luxembourg and No Change in 800 years

May 17, 2013

May 2013 Newsletter

All change at the FSA

From April 1st the Financial Services Authority was no more, having been split between the Prudential Regulation Authority and the Financial Conduct Authority.  Read more about what has changed and will it work to prevent more PPI scandals at The New Regulators are No Joke

Foreign travel

Bloomington Indiana

I had the pleasure of attending a KeyneInsight (www.keyneinsight.com)  Strategy Execution Management workshop in Bloomington Indiana.  After negotiating trains, planes and automobiles in getting to Bloomington from the UK, much was learned from the experience of other Keynelink distributors including, the benefits to Keynelink clients of:

  • a complete audit trail and details of performance progress meetings held between a manager and their subordinates. Such information has been successfully used in defence of legal actions taken by disgruntled employees.
  • leadership and management development, for example.

–  the power of having visibility of whether and how the key strategic initiatives are being supported and progressed throughout the organisation.

–  promoting regular conversations between managers and their subordinates.

  • turnarounds – where Keynelink is a key enabler in supporting a successful turnaround

Luxembourg

Luxembourg is a less complex trip than Bloomington and resulted in an enthusiastic response from a Life Assurer for Keynelink to support their current performance management system in providing:

  • Transparent structure and process

– clear alignment with strategic objectives and values

– consistent process discipline

– comprehensive metrics to maintain alignment

  • System support and data repository

– dynamic, fully-operationalised role definitions

– audit trail of issues

  • support for development of excellent management practice
  • evidence for contentious actions

High School

A similarly enthusiastic local high school wants a speedy implementation of Keynelink to support the management of support staff in performance appraisal system, culture change and provide the Head and Senior Management Team with transparency on progress with the strategic initiatives and individual performance.

Every organisation has a Strategy Execution Management “system”

…most don’t work and look something like this…

SEM Process

 

What does yours look like?

Target Operating Models

A recent project generated some new thinking in applying private sector target operating model concepts to a consumer protection focused public sector regulator subject to major change.  The top 5 lessons learned included:

  1. The customer value proposition through which a commercial strategy is operationalised must be considered in terms of the regulatory lifecycle; being the types of interactions that the regulator will have with the regulated community and the consumer.
  2. Strategy encompasses not only the governing regulations but also more importantly the way in which the regulations are to be applied.  It is this regulatory approach which is operationalised through the design of the target operating model and the regulator’s risk appetite and available resources.
  3. Think process not silo’d functions.  This is no different from a commercial TOM but the challenge is in how any new powers and the regulatory approach will be supported in a seamless way across the organisation and its boundaries.
  4. The relationships with other members of the regulatory family must also be considered and coordinated.
  5. Complete focus on protecting the interests of the consumer while fairly balancing the costs and impact on the regulated community.

Rules for the Conduct of Life

In a ceremony dating back to the 13th century, new Freeman of the City of London are presented with a Freedom certificate and a small red book of Rules for the Conduct of Life. The rules are for the use of “such Freemen of London as take apprentices”. Rule XXVI states that

“Where you are not able to finish a business without the help of others, call in speedily such persons to your assistance as are fit to be employed in it. The more hands are employed, the more work is done; provided they are managed in such good order as not to be a hindrance to one another.”

Regards

Jeff Herman


Execution Management vs. Performance Management

February 17, 2013

by Kelly Nelsen, Ph.D.

Performance management generally refers to measuring past performance and making an adjustment or two in order to increase performance next time. In the workplace, you perform to some standard, and your boss measures your performance to see if it met the standard.  Based upon the results of that measurement, you adjust your performance (or the standard) as necessary in order to meet it the next time around.  At its essence, it’s nothing more than an employee appraisal process that the human resources department typically owns.

Execution management is a bit different.  Execution is the act of doing something, and when you manage execution, you’re focused on managing an act rather than a result. That’s not to say that execution management is or should be about micro-management – far from it.  But shouldn’t management be about leading, guiding, and motivating people to greatness rather than simply judging them at the end?

Shouldn’t management be about leading, guiding, and motivating people to greatness rather than simply judging them at the end?

The Way Sports Teams Do It

Organizations usually set goals at the beginning of the year and then look at them again at the end of the year to see if they were met. Based upon this annual review, adjustments are then made for the coming year. But what if a football coach managed its players this way? The coach would set a goal at the beginning of the season to win 15 out of 16 games, let’s say, but only at the end of the season would he look back and discover that they only won six. That would be one sure way of getting fired as a coach, wouldn’t it? Instead, the players are coached throughout the game, and the game itself is reviewed in detail at its conclusion. This way, players can make adjustments as they go. Shouldn’t organizations work that way, too? Shouldn’t they practice execution management the same way that sports teams do?

Driven by Strategy

It’s not enough to manage the execution of individuals in an organization; rather, individuals’ activities need to be driven by the organization’s strategy and goals. Just as the individual football players’ activities are driven by the team’s, management’s, and owner’s goals, so must individual employees’ activities be driven by higher-level goals and strategies.

Unlike performance management, execution management is owned by senior executives. It starts with defining the strategy and continues with the execution of it. While the purpose of performance management is to determine how well employees are performing for succession planning, training, merit raises, and the like, the purpose of execution management is to successfully carry out the strategic plan in order to realize the organization’s vision. Because strategic plans are identified at the highest levels in an organization, execution management is the ultimate responsibility of the executive team. Performance management, on the other hand, is typically the ultimate responsibility of Human Resources.

If you want a system that merely looks at past performance of employees to see if they deserve a raise or a bonus, a simple performance measurement system will do. But if you want to manage the successful execution of your strategic plan, take a look at Keyne Insight’s strategy execution management system at http://www.keyneinsight.com.

Kelly Nelsen, Ph.D., is the CEO of Keyne Insight


Build Businesses, not Hamburgers

March 21, 2010

 

Ray Kroc didn’t get rich selling McDonald’s hamburgers, he got rich selling franchises to other folks who got rich selling McDonald’s hamburgers.

Businesses that sell hamburgers have to be good at two very different things – making and selling hamburgers and building businesses that make and sell hamburgers. How often do we work with organisations that are good at making and selling things but not so good at building businesses?

Kroc found the secret to building the businesses and left it to the franchisees to make and sell the hamburgers. They didn’t have to be good at building their businesses because the franchise showed them exactly how to do it.

A franchise has a system. Without the system inherent in the franchise, neither Kroc nor his franchisees would have gotten rich.

Organizations need a culture of discipline – this means discipline in thought followed by discipline in execution – and both functions need systems for them to work.

Discipline in thought is most often represented by some form of business plan. Almost every organisation has one. But what about the discipline in execution? What about a system to make sure the plan is executed as the CEO thinks it should be executed?

And there’s the rub. While there are many planning systems around, until recently there was no such thing as a “strategy execution system”. This is a system that helps your clients build the business as well as making and selling the hamburgers. If you don’t have the execution system, you are playing Russian roulette with the results.

In recent years several “strategy execution systems” have appeared in the marketplace. Most of them are little more than automated personnel appraisal systems. They focus on employee competencies, not on corporate initiatives. This can be useful, but competencies are not enough – the CEO needs a way to focus on the organization’s strategic initiatives, not just on its employee competencies.

One strategy execution system we like (and we use in our practice), focuses explicitly on corporate initiatives, not on employee competencies. This is KeyneLink® http://www.keyneinsight.com.

KeyneLink is inexpensive because it is web-based, low risk because it is implemented in small bites and is implemented with experienced consultant/partners who know their clients’ business and their own.

KeyneLink helps the CEO to create the strategic initiatives, clarify and communicate them throughout the organization and make sure they are achieved in a way neither you nor he has ever seen before. If there is a more important job for the CEO to do, I’d like to know what it is.

It won’t help much with the hamburgers but it will help the CEO to build the business.

published with kind permission of Chris Jones – partner StrategyLink Consulting www.strategylinkconsulting.com


We forgot to manage the management

February 25, 2010

Click on link below for article by Mick James, the UK’s leading journalist on the consulting industry.  Mick expounds some thought provoking views on management along with a reference to execution management and Keynelink.

This article was originally published in Top-Consultant (www.top-consultant.com)

We forgot to manage the management


BlueNotes- our newsletters

February 25, 2010

Click on the links below to download our newsletters

BlueNotes-Spring2010 – Solvency II, School Building Lesson, Do Accountants Need Coaching?

BlueNote-Spring09 – Credit Crunch Edition

BlueNotes-2007 – Designing the future, stakeholder management

BlueNotes- 2006 – So you want to sleep at night


Strategy Execution Management – turning ideas into action

January 27, 2010

It is a sad fact that most strategies fail to get fully executed despite the recognition and attention paid to change management in facilitating the transition from good ideas into action.

“Our problem is not about the strategy itself, but our execution of it.” Tony Hayward CEO BP (10/2007-BP sets out its Agenda to Close Performance Gap with Rivals)

“The change will not be in our fundamental strategy – we think that strategy is sound – but in our execution.” Benjamin Rosen, Chairman Compaq, 1999.

A McKinsey study in 2007 “How to improve strategic planning” identified five ideas to improve the strategic-planning process, which comprised:

  • Start with the issues, anticipate the big challenges and emergent trends rather than a focus on data driven processes such as budgets and financial forecasts
  • Bring together the right people, that is those who are the most knowledgeable and influential, able to stimulate and challenge accepted thinking with honest open discussions about difficult issues
  • Adapt planning cycles to the needs of each business, get away from a time consuming annual process to a planning cycle that fits the needs of the business which may be only every two to three years.
  • Implement a strategic-performance management system, that assigns accountability for initiatives and make their progress more transparent.
  • Integrate human-resources systems into the strategic plan, by tying the evaluation and compensation of managers to the progress of new initiatives.

The development of an organisation’s strategy is often a tense, intense and exciting process, an opportunity to vent frustrations, put cards on the table and tell it how it is.  Rationally, a strategic review may be undertaken because of competitive and financial pressures and the whole panoply of business guru strategic models can be deployed along with the input from market research, workshops and facilitation from consultants and subject matter experts.  Awaydays, metaphors of burning platforms, project codewords and the utmost secrecy all add to the buzz and excitement. The CEO and Board may set out the aspiration to become an agile learning organization, capable of adapting to changing circumstances and customer demands.  Seemingly, the hard and exhausting intellectual work has now been completed, but the difficult practical work in executing the strategy and realizing its benefits must now begin as the strategy is unveiled for conversion into plans, KPIs and communication programmes.

Bridging the air gap between strategic plans and execution requires practicable frameworks and toolsets to minimise the risk of strategic failure.  Such a framework has recently been described in Kaplan and Nortons’ recent book, “The Execution Premium – linking strategy to operations for competitive advantage”.  However, although the framework describes the work that is required to implement the strategy, it does not provide a comprehensive management toolset to support it.  No doubt, different tools and approaches can be utilised for different stages of the framework.  One of the few toolsets that is available is KeyneLinkTM a strategy-driven execution management system that integrates an organisation’s strategy, vision and values with the daily activities of its people.  KeyneLinkTMprovides a systemic approach tomanaging an organisation in a way that the McKinsey study identified in the need for a strategic performance management system and that is capable of integrating the HR systems into the strategic plan. KeyneLinkTM is an approach supported by a web-based system that links an individual’s goals and objectives to the strategy.   Progress in the execution of the strategy is managed on a regular basis.  The whole point about KeyneLinkTM is to facilitate regular communication between managers and their subordinates with a focus on explicitly cascading strategic alignment down through an organisation.  This systemic approach beats leaving strategy execution to the vagaries of differing corporate cultures and management styles that bedevil large and even small organisations.  Shouting a strategy from the rooftops doesn’t make it happen!

Jeff Herman