Ten Mistakes to Avoid When Attempting Business Performance Improvement
(Originally published by TDWI) By Maureen Clarry
(This article is available for download, as a PDF document.)
The latest acronym to take corporate America by storm is BPM: Business Performance Management. A March 2003 TDWI report defines BPM as “a series of business processes and applications that enable the execution of business strategy.” The report’s author, Wayne Eckerson, notes that the prospects for BPM are bright, primarily because business management today is far from an exact science.
In exploring the cause of such widespread room for improvement, Eckerson explains, “The main problem is that there is a huge gap between strategy and execution. Executives spend days or weeks devising well crafted strategies and then throw them ‘over the wall’ to the rest of the company, hoping and praying that their vision will bear fruit. Usually, nothing much happens.”
Which begs the question: Why?
As the Balanced Scorecard gains in prominence, more companies are discovering the answer to that question. What they’re finding is the critical success factor for aligning initiatives - including business intelligence projects - with overall corporate strategy. This alignment, it turns out, reaches to the heart of every corporation: the individual employee.
Such alignment of corporate strategy must ultimately be accomplished one person at a time. Each and every employee requires the ongoing attention and guidance of their manager, plus input from fellow employees, customers, prospects and partners, in understanding three interrelated concepts: 1) their personal responsibilities; 2) the overall corporate strategy; and, 3) where they (and the results they’re expected to generate) fit into that strategy.
This pamphlet will outline some of the most common pitfalls associated with accomplishing effective BPM, insight that can be used to improve the performance of the individuals who are central to executing business intelligence.
Mistake #1: Assuming training is the ‘silver bullet’
A common misconception amongst managers is that enough training can solve any problem. Even the American Society for Training and Development (ASTD) says that training is not the silver bullet. Rather, the ASTD recognizes that training and skills development comprise just one part of the picture. Many other factors apply, such as motivation, accountability, culture, technology, strategy, process, information, team orientation and other dynamics.
Managers must be careful not to overlook these factors when considering whether or not to engage an employee in additional training. The question should be asked whether the company is spending more in training than it is in selecting and hiring appropriate candidates in the first place and/or creating the right environment for success.
The Denison Organizational Culture Survey, developed by Dr. Dan Denison from the University of Michigan, provides additional clues. Based on 15 years of research on over 1,000 organizations and 40,000 individuals, the survey uses 60 items that correlate culture to bottom-line business performance. The four cultural traits are Mission, Involvement, Consistency, and Adaptability. According to the Denison model, training comprises but one of 12 management practices associated with the four cultural categories (capability development falls under Involvement). Training for training’s sake should be replaced with professional development targeted toward developing specific BI or related competencies that will yield business results.
Mistake #2: Focusing on tasks instead of results
A common mistake in trying to improve employee performance occurs when managers focus on tasks, not results. In such scenarios, employees quickly lose sight of what they’re accountable for at end of day. They get wrapped up in what they’re doing, which inevitably results in misalignment between their activities and the corporate strategy.
This is a big factor in job satisfaction - people need to feel like they contribute. They need to feel as though the work they do is worthwhile, that it helps the company achieve its overall mission. Absent an understanding - let alone an appreciation - of that mission, employees will never be truly satisfied, which means they’ll never realize their full potential.
Managers should forever guard against the tendency for micro-management, which nobody appreciates. People are happiest with their work when they are challenged just enough. Allowing employees some latitude in determining how results should be achieved usually generates positive results. Quashing independent thought hurts the creativity and acumen of the organization. Successful enterprises encourage employees to think strategically as well as tactically. Discouraging such thoughtfulness deprives the organization of valuable assets: new ideas. Tell your employees where to go, not so much how to get there.
This phenomenon of task-focus versus result-focus is not the exclusive property of IT or business intelligence organizations. In many conversations we have with business professionals and senior executives, we ask them about the outcomes of their activities. In response, they talk about what they do, their day-to-day tasks. When we press them on how their outcomes map back to the corporation’s overarching goals, they tend to have difficulty articulating an answer. So both business and IT have the same problem, and both can benefit from results-oriented thinking.
Mistake #3: Ignoring the impact of organizational culture
Especially in the world of IT, employees can often navigate technological or analytical challenges much more easily than cultural ones. An unproductive culture can adversely impact the entire organization, striking at the most critical of all processes: human performance.
This importance of cultural impact has been outlined in detail by Denison, who defines organizational culture as “the underlying beliefs, values, and assumptions held by members of an organization, and the practices and behaviors that exemplify and reinforce them.” Denison defines 12 key management practices in every culture that impact business performance: strategic direction, goals and objectives, vision, organizational learning, customer focus, creating change, team orientation, capability development, empowerment, core values, agreement, and coordination/integration.
As that definition implies, each organization’s culture is both unique and highly complex. This complexity is especially difficult to unravel because so many aspects of an organization’s culture are invisible, such as core values, attitudes or beliefs. These are abstractions that must be viewed through a highly sophisticated filter, such as that which the Denison model provides.
Gauging and guiding culture is therefore an ongoing process, analogous to hitting a rapidly moving target. Perhaps due to this complexity, many organizations simply throw up their hands and hope for the best, or go the opposite route of dictating work styles and methods to the point of controlling culture excessively. Neither extreme is likely to produce desired results. However, our experience in executing business intelligence initiatives indicates that focusing on these key management practices can have a significant positive impact on business performance.
Mistake #4: Minimizing the importance of business alignment
Even senior executives sometimes have difficulty explaining what they’re trying to accomplish. This creates a dilemma for IT, which must be aligned with overarching business goals if the company wants a good chance of success. Typically, when senior management can’t clearly articulate its vision , IT attempts to align with the business anyway.
Deadlines don’t wait for decisions, and frustration frequently compels people to do something just for the sake of doing something in time. Obviously, such decisions are sub-optimal. In fact, of 200 IT executives surveyed by Deloitte Consulting and IDG Research Services, 96% recognize the importance of aligning IT and business strategy, but only 10% rated themselves “extremely successful” in alignment efforts.
Consider this example: A BI team holds meetings to gather requirements for a new project, an array of OLAP cubes. The end users describe some functionality they want. When the BI team asks why those features are desired, management doesn’t explain, or at least fails to articulate clearly. The cubes are then built and deployed, but the applications are abandoned by users, amounting to a major waste of time, energy and resources. This is a casualty of minimizing the importance of business alignment.
Relationships are a two-way street. Both business and IT can default to an “us versus them” mindset when relationships falter. Senior managers take the position that IT is responsible for understanding what the business needs. Meanwhile, IT points a finger to cryptic needs from the business. Regardless of who is more at fault, the reality is that the enterprise loses when relationships fail.
ASTD points to healthy relationships as the most important aspect of any successful business. “The essence of positive relationships is in the strength of the connections between the entities, and these connections require significant attention in order to be obtained, nourished, and sustained over time. So, while the solution sounds simple, it’s clear that failure is in the execution.”
The Balanced Scorecard approach emphasizes the importance of aligning specific BI solutions with critical business processes. This is a brass-tacks method for aligning BI initiatives with real business needs. But even when such a finely focused perspective is taken, relationships are still critical. If management isn’t clear about its vision or plan, IT will founder in delivering BI solutions that serve the business well.
Mistake #5: Replacing component parts
Roughly 150 years ago in 1855, the general superintendent of the Erie Railroad, Daniel C. McCallum, created one of the first official organizational charts, or “org charts” as they’re called today. McCallum was coping with the difficulty of operating a railway that spanned several hundred miles, so he set out to devise a system for managing such a large-scale operation.
The answer, McCallum determined, was to compartmentalize the company into geographical regions, each with a superintendent of its own. Each superintendent was responsible for his particular region, and each was to report to headquarters on a regular basis. The org chart McCallum created featured clearly drawn lines of authority that connected each superintendent to his subordinates and to headquarters. Thus it was clear who reported to whom throughout the entire organization.
Today, similar hierarchy charts are used for a whole host of purposes, often mechanical, such as a diagram for the parts of an engine: one part consists of many sub-parts, each of which can have smaller component parts. This type of diagram is extremely useful for outlining all the various components of a machine. Having such a diagram facilitates both the creation of such machines and their maintenance.
But when these charts are used to represent human beings, a disconnect occurs. There is a mindset that has prevailed for the last 150 years to see the objects depicted in that chart as mechanical components, not as people. And, if our explanations are mechanical, so too are our solutions: fix, replace, rotate, remove. It’s easy to forget that the boxes on the page are not as simple as the components of a machine. People are complex!
Mistakes are often made by over-simplifying the process of moving someone around within an org chart, or taking them out altogether. Instead of improving the relationships between the “components,” much time and energy is spent on rearranging the parts (restructuring) without significant positive change. Bear in mind that changes to the structure of an organization can have far-reaching, often unexpected, effects on the organizational “system,” effects that are beyond the anticipated impact of restructuring the “mechanical” components. Business performance improvement should focus on the relationships between the component parts and not just the parts in isolation.
Mistake #6: Looking exclusively outside for answers
Bringing consultants or “best practices” into a corporation can yield very positive results for improving overall performance. But too much reliance on answers from the outside can pose as many problems as it solves. Managers who predominantly look outside the organization for answers risk making any or all of three significant mistakes: 1) missing out on good answers that someone within the company could have provided; 2) bringing in bad ideas from consultants who don’t know the business well enough; and, 3) offending internal workers, possibly to the point that they get frustrated and leave.
The people who comprise an organization generally know the most about that organization. Outside consultants can add value by pointing out issues that employees may have overlooked, or by bringing in completely new perspectives. But suggestions made by such consultants may be similar to suggestions already on the books. And employee morale will inevitably falter if internal ideas are not appreciated, or are only rarely, if ever, implemented. Remember that culture affects all aspects of a business, and low morale is not conducive for a productive corporate culture.
The craze for “best practices” is also dangerous. First and foremost, consider this question: Is there really such a thing as a “best” practice? Isn’t it just the case that there are many “very good” practices? The term “best” is a strong one indeed, so strong that its use borders on the silver-bullet mentality. Remember that many such “best practices” are not only specific to industry, but company, employee and even particular circumstance. Are there “very good” practices within your own organization that could be promoted to a broader group of people to improve business performance?
Mistake #7: Missing motivation
Decades ago, employees would often work for the same company their entire career. Regardless of their role within an organization, people would stay on board for upwards of 30 years, sometimes longer. If that were one end of a pendulum, we’re clearly on the other side these days - employees usually stay no longer than three years in the modern world, a stark contrast to days gone by.
Whether this movement away from loyalty is the chicken or egg with respect to motivation is an open question. What’s clear is that lack of proper motivation certainly doesn’t help. The Denison survey places heavy emphasis on the importance of proper motivation, both positive and negative. According to the Denison model, successful organizations are those in which: “Individuals have the authority, initiative and ability to manage their own work. This creates a sense of ownership and responsibility toward the organization.”
This sense of ownership is tied directly to motivation. When people feel as though they belong, and that their efforts are both valuable and appreciated, they are more likely to be motivated to do well. Obviously, promotions and other accolades play a significant role as well. But so does the fear of punishment, specifically of being fired. Successful companies reward good workers and deal with bad workers appropriately. The key is clear and appropriate consequences for what the employee does or does not provide.
Mistake #8: Settling for “soft” results
In working with a wide range of companies over the years, we’ve asked thousands of IT professionals and other executives to articulate the value they expect from their BI teams. Some of the generic answers we’ve heard include metrics such as “the company seems to be doing better” or “we have better information” or “we’re making more informed decisions.” Such answers always beg the question: What does that mean?
Answers such as those above represent “soft” results. The problem with such soft results is that they cannot be qualified objectively. This is a dangerous mindset, because it provides no valuable information about the “hard” results of BI initiatives. Such hard results would include an increase of sales by 10% in a certain market, or a decrease of 20% in product returns, or an increase in 20% of overall customer satisfaction.
On the other hand, managers must consider the fact that such percentage-based metrics can be rather abstract and may not add value if considered too acutely. For example, it might turn out that an increase of 10% in sales for a particular product yields a 5% decrease in net profit. The business result of the BI initiative needs to be quantified and understood.
Mistake #9: Assuming team members are the same
Related to Mistake #1, a common misstep made by managers is the belief anyone can do any job well with enough training, motivation and technology. Such an assumption presumes that all people are the same, that individuals are not unique. Quite to the contrary, human beings are decidedly singular. Every person has a distinct set of strengths as well as weaknesses. Just as leopards can’t change their spots, people are inextricably tied to their nature.
In their book, Now, Discover Your Strengths, authors Marcus Buckingham and Donald O. Clifton outline the importance of recognizing the ways in which employees are different. They talk about something they call the strengths revolution, noting: “The great organization must not only accommodate the fact that each employee is different, it must capitalize on these differences. It must watch for clues to each employee’s natural talents and then position and develop each employee so that his or her talents are transformed into bona fide strengths.”
When organizations play to the strengths of their employees, good things happen. The Gallup Organization asked nearly 200,000 employees working in nearly 8,000 companies the following question: At work do you have the opportunity to do what you do best every day? Buckingham and Clinton then compared the responses to the overall performance of the applicable business units and discovered some startling information:
“When employees answered ‘strongly agree’ to this question, they were 50 percent more likely to work in business units with lower employee turnover, 38 percent more likely to work in more productive business units, and 44 percent more likely to work in business units with higher customer satisfaction rates.” Those are solid metrics that point to the significance of capitalizing on the strengths of employees.
Mistake #10: Focusing on poor performance
The corollary to the importance of strengths is the lack of importance related to weaknesses. In their book, Buckingham and Clinton lay out two fundamental errors that most organizations exhibit with respect to employee performance: 1) Each person can learn to be competent in almost anything (see Mistakes #1 and #9); and, 2) each person’s greatest room for growth is in his or her areas of greatest weakness.
Anyone who has been honest with themselves long enough has likely determined that their weaknesses will always be the same. People who see the Big Picture will almost always falter if forced to focus on minutia. Those who are exceptionally detail-oriented may not ever see the Big Picture clearly. These are facts of life. An old Chinese proverb says, “Don’t push the river.” In modern times, we say, “Go with the flow,” but the message is the same: some things in life don’t change easily, if at all.
By focusing too much attention on improving such weaknesses, managers are trying to push the river. They’re trying to fit square pegs into round holes. The authors continue: “[Managers] become expert in those areas where their employees struggle, delicately renaming these ‘skill gaps’ or ‘areas of opportunity,’ and then pack them off to training classes so that the weaknesses can be fixed… But this isn’t development; it’s damage control. And by itself damage control is a poor strategy for elevating either the employee or the organization to world-class performance.”
Of course, a little bit of training to help someone manage a mild weakness can certainly yield positive results. But remember that the best way to improve a company’s performance while also increasing employee satisfaction is to play to the strengths of your workers. When you’ve got the right people in the right jobs with the right strengths focused on the right results and working in the right environment with the right motivation… well, the organization will surely improve its performance.
Maureen Clarry has been on the faculty of The Data Warehousing Institute since 1998 and teaches regularly on organizational and leadership issues related to business intelligence. Maureen is the CEO / President of CONNECT: The Knowledge Network, a consulting firm that specializes in IT people and organizations. CONNECT was recognized as the 2000 South Metro Denver Small Business of the Year, and has been listed in the Top 100 Women Owned Businesses and the Top 250 Privately Owned Businesses in Colorado. Maureen also participates on the Data Warehousing Advisory Board for The Daniels College of Business at the University of Denver and was recognized by the Denver Business Journal as one of Denver’s Top Women Business Leaders in 2004.