Aligning Organisational Activity to Strategic Targets? Using Balanced Scorecards?
Enterprises are increasingly focused on Strategic Performance Management. In most large and diverse organizations ensuring there is a consistent alignment between day to day activities and Strategic objectives is a challenge. The list of methodologies and variants to measure the alignment of operational activity to strategic objectives is endless; among the most frequently referenced are Activity Based Costing, Control Charts, Strategy Maps, Six Sigma (lean or otherwise), Total Quality Management, Value Based Management, The Performance Prism, The Balanced Scorecard and many others. All have robust documentation and text books outlining the ideal implementation and coaching exercises to train the individual and the organization on how to arrive at that ideal.
Fundamentally all of these efforts are designed to address a Governance requirement. The requirement to set and guide the direction of the enterprise, to define expectations, to assign authority and to verify performance.
All of these methodologies address a common set of challenges: a data challenge, a process challenge and a people challenge.
DATA CHALLENGE:
The data challenge is ensuring there is a complete, objective and accurate body of evidence capturing the enterprise's performance against targets.
PROCESS CHALLENGE
The Process challenge is around ensuring that evidence is collected reliably, consistently, stands as a record over time, can be aggregated, subjected to comparisons or contrasts, and incorporates all the required elements, that it is hard numeric data along with softer customer\organizational satisfaction, or quality information and an assessment of issues, risks, value etc.
PEOPLE CHALLENGE
The people challenge is to overcome the natural organizational resistance and entropy that comes with manual data collection, numerical rigour, and oversight driven by metrics.
These challenges are very real and taken together are a significant inhibitor of Strategic Performance Governance. It is with good reason the subject is one that organizations spend a lot of energy and money on. The solution is in some ways a relatively simple one. Fundamentally it requires an investment in organizational capability. The leading enterprises in every industry sector, and, perhaps even more so, those aspiring to a leadership position, are constantly looking at ways to improve the capability of their people and processes. They understand that organizational capability is a constantly rising curve and if they do not continue to invest they will lose ground. They recognize that the investment is directly related to business value and the return is very material to the bottom line of the business.
That investment does not imply that a complete rewrite, or replacement, of current IT, Business Intelligence, or other data management systems is required.
There is a tools based element to the investment. It does mean selecting a tool set which supports addressing the Data and Process challenges, and, in doing so, it should empower employees by releasing their effort for analysis, insight and decision making.
The tool, application or platform will ideally be light-weight, easy to implement and use. It will be accessible from any location and be easily updated, changed and adapted as the business evolves and the appropriate data requirements evolve, mature and change with the strategic imperatives of the enterprise. It should have the capability of being integrated with the IT infrastructure and transactional data management systems of the enterprise. But integration is not the end goal. It is a nice to have in terms of reduction or removal of manual, people dependent, processes, but the focus should be first on understanding what information is needed to help the business owners make the best decisions and be flexible in changing those as required. Integration can follow.
The application most commonly used for this purpose today is the Spread sheet. The spread sheet is a powerful business tool with wonderful capabilities. But using spread sheets to support the strategic performance governance needs of the enterprise is not investing in the capability of either the people or processes involved.
The data, process and people challenges involved demand a richer solution: software delivered as a service to address the ease of use, ease of change, ease of access requirement and the default objective to be cost effective. A software solution that improves the capability of the organization in strategic governance: and constantly assesses, and reinforces the alignment of operational and service performance with the strategic direction of the business.
It would be heresy to suggest that with the right tool set and the right investment in people to drive organizational capability that the strategic performance method chosen is not that critical a decision. But having selected the appropriate methodology the decision to invest in the organization is already made, unless the toolset in there to support the decision it will not deliver on expectations.
That software service should:
1. Have the capability to capture and present the Vision, Destination or Strategy statement against which progress will be set and performance measured.
2. Make it possible to map out the various perspectives, dimensions or parameters within which strategic and objectives are identified.
3. Allow for specific Activity and Outcome objectives to be captured under each parameter in a logical hierarchy along with the appropriate measure for the performance objective, be it count, ratio, or a binary measure and in turn to set a target for those measures.
4. Be able to assign to individuals responsibility for entering actual scoring data against individual measures and then calculate performance against target and report status.
5. Drive the workflow around the timing of data entry, alerts, and reminders and at all times there give visibility on any missing data, i.e. accountability will be clear.
6. Ensure access is secure, role based and individuals will see only what the organization says they should
7. Enable rich reporting at an aggregate or individual metric level through dashboards, and export to standard applications such as Excel or Power Point.
8. Ensure that individual objectives, their targets, and the associated metrics, are recorded over time and can be reviewed and reported at a very granular level. Issues or risks around that objectives and steps in resolution or mitigation are recorded.
9. Allow flexibility to determine whether certain data is treated as collaborative and therefore may be shared across divisions, regions or indeed 3rd parties.
Please contact info@serviceframe.com for more information on software solutions for strategic performance governance.