Earlier today, I spoke with a colleague who has been wrestling with a group of internal customers who seem to be in a perpetual state of “resisting change”.

You know those types… the kind of people who defy the most logical solutions and what appear to us to be the most obvious of necessary process or organizational changes. Oh, those endless conversations about the most granular of insignificant details.Walking away and wondering if my organization will ever “get it”. To add insult to injury, those days are often accompanied by conversations with others who appear to have found that holy grail. The grass always does always appear a lot “greener on the other side”.

But today, my friend was given some very valuable (perhaps career saving) advice. As he wrestled with this dilemma, one of his partners shared a good analogy. He pointed to, of all sports- golf, where its not uncommon for a player to do everything “right” and just not have the “breaks” fall his way. While this has happened to almost every golfer I know, what’s even more amazing is how often this happens to professional tour players. When you have some time, take a look at the tour results- wins, top finishes, earnings, and player statistics. What you’ll find is that while there are 2 or 3 people every year that appear to perform flawlessly week in and week out, they are still few and far between. Most players practice hours on end, only to win one or two events in a particular year. Even the “top guns” go many strokes in between what they would call a perfect shot. Few, if any, ever claim to have a perfect round.

No, golf is a game of “grinding”. Hundreds, if not thousands of shots waiting for that perfect swing. And boy does it feel good when it happens. Golf is a game of doing the “right things” over and over again, even when inspiration and motivation are lacking. Good players know that strength is gained in the “grind”, and it is the process of “grinding” through the misery that ironically produces the best shots.

Changing corporate culture is much the same way. While you will spend hours and hours doing the “right things”, most of the time, it won’t feel like you’ve gained anything. You’ll question yourself, your employees, your leadership, and your culture. Until one day, you’ll hit that perfect shot. Someone in a meeting will utter something that will let you know the culture has begun to shift. Just like the well struck golf ball after months of “grinding it out”.

To my friend and colleague, I say great advice. Hang in there and keep “grinding”. Cultures take a long time to change, but there is nothing sweeter than seeing it occur in action, which makes the long “grinding” phases well worth the wait.

A few weeks back, I had an opportunity to view some of the emerging performance management tools in the marketplace, and in particular, where they saw themselves headed. That experience caused me to reflect a little bit on these “new” performance management tools, and what really differentiates them as “best of breed”.

There are literally tons of related tools and systems out there, many of which have historically evolved as part of an Enterprise Reporting System. More often than not, these tools were largely driven by the financial part of the organization, and hence were built upon a financial reporting foundation. That, in and of itself is not so bad, but all too often these systems left gaping holes in the areas most important to operations and line management.

Enter the new breed of performance management systems.

The tools in this class of PM systems (PerformanceSoft, Cyndrus ADS, and PilotWorks for example) have gone well beyond the financial reporting game, and have really delivered a far more powerful and universal solution- one that supports the entire organization’s performance reporting needs. It is not my intent here to endorse one or the other (although I have my opinions), but rather point to some distinguishing characteristics that make these tools unique, beyond simply their “universal” application.

The, first and most important of these features is found in the tools’ foundation itself -the Performance Management Architecture. Most of these systems require management to start with their strategic plan, and align around it. The plan, and its corresponding objectives form the basis for everything else that follows. Everything else “cascades” from it, and is linked directly to it. Nothing is measured or tracked unless it has a direct feed to one or more of the organization’s top objectives.

The second distinguishing characteristic is what I call the “connectedness” of the system. Some might refer to this as “drill down” capability. In essence, what this means is that the user can, at any point in the system, probe deeper into what is driving a particular strength or weakness of a performance indicator or measure. For example, they can define what comprises a particular metric, what inputs are most responsible for current performance, which initiatives are being deployed to strengthen it, and how those initiatives are progressing. Each of these “levels” can be accessed through any of the others, producing a rich tapestry of “connected” information in terms of performance drivers and inputs. This puts the executive in a great position to lead, being able to “virtually” move up, down, and across the organization on demand…enabling her to really understand and manage the most critical of performance drivers.

The third differentiating feature of these systems is the flexibility and adaptability each of them possess. There are two aspects to this flexibility. One relates to how the data is fed into the system. In most ERP environments, the data feeds are “hard wired” , and often require programming to make any significant changes to those inputs. With these new performance management systems, however, inputs can be easily added, deleted, or manipulated directly from an administrative panel, often without a significant amount of external programming. With the advent of “web services” and other data publishing protocols, these features will become increasingly important to system administrators and users.

The other aspect of flexibility relates to the level at which the organization can deploy the technology. Not every organization has the appetite for “complete” drilldown capability, nor is it really necessary. For one organization, getting down to an individual turbine blade on a particular aircraft might be important to one of its strategic objectives, whereas another organization is comfortable just reporting at the level of regional operating budget. In each case, the system is flexible enough to be deployed at whatever level makes sense today, but adapted as internal needs and/or process changes arise.

Taken together, these features- the strategic architecture, the connectedness of these systems, and their flexibility and adaptability- help create an environment in which the organization focuses on doing the “right things right”. Every initiative, project, and metric are PUT TO THE TEST of whether they support the overarching objectives of the business. And with that level of focus, the organization can achieve levels of alignment never before thought possible.

So as you look at your internal metrics and performance indicators, ask yourself do you really have in place the “METRICS THAT MATTER”. Implementation of systems like these can really instill the discipline needed to realign and sustain your performance improvement initiatives, often at far lower costs that their ERP counterparts. If nothing more, take a good hard look at how these systems work. Even if you don’t purchase or implement, the evaluation process will give you a much needed perspective into where your performance management process should, and could be headed.

Welcome back to the grind. I hope all of you had a nice Memorial Day weekend. Weekends like this do wonders for “recharging the old battery” and reconnecting with family and friends. And if you’re anything like me, weekends like this are also good for doing a little introspection on how the first half of the year went (ok, we’re not quite at the halfway point, but we’re close enough)…the challenges we faced, how we dealt with them, and a staging of priorities for the balance of the year.

It’s in that spirit that I thought I’d spend a little time on an issue that I know many of you have been wrestling with recently. Many of you have shared some rather challenging experiences in defining and executing your role organizationally as “service provider”. Not that we all don’t understand the role of a service provider, but in the context of endless restructurings and reorganizations, many of you have had to deal with redefining your relationships, both with your executive leadership, and the line organizations which many of you are responsible for supporting. And while this has been an age old problem, it seems achieving that balance is getting trickier than ever.

Many performance management organizations report administratively to a “staff executive” (HR, Finance, Strategic Planning, are among the most common). But while these executives may serve as our primary customer, we cannot effectively do our jobs unless we win the support “line management”. In the end, these are our real customers. And while its easy to get caught up in the daily grind of producing Board Reports, Executive Committee Briefings, and Corporate Performance Reviews, we must not lose sight of who the real beneficiaries of our services are. They are the real connection between what we do and the ultimate shareholder value that gets produced.

So as you think about your own YTD “report card” for 2005, here are a few things to consider:

1. What kind of relationship have you established with your internal customers? Is it one of cooperation and partnering, or is it more of the “corporate watchdog”? One of the biggest pitfalls I see performance managers fall into is misinterpreting the charter and authority they are entrusted with. Often, performance managers will look to their staff executives to reinforce the plans they’ve put into place. What do you do if the line organizations won’t “”play ball? Be careful of falling into this trap. Before you look for more “backing” from your boss, try to inventory your relationship with the line organizations. Sometimes, the solution lies simply in how you VIEW the relationship. Do you see them as working for you, or do you exist to serve them? Simple but big distinction.

2. Are you a provider of “projects” or do you strive to “enable” your customers with the requisite tools and capabilities? I know many of you spend a LOT of time producing reports, presenting them, and gleaning insights FOR your customers. That’s OK, but that, in and of itself won’t produce actionable value. In fact, I would argue in favor of producing fewer deliverables, and a heck of a lot more emphasis on coaching and teaming with them on what these reports mean for their bottom line.

3. Key to being able to deliver on #2, is a clear understanding of what keeps your customer awake at night. What drives her success? What is the biggest driver of his P&L? What factors most impact their career/ personal success? If you don’t know, ask. If you can position your initiatives in this context, you’ll instantly produce a lot more buy in and alignment. Sometimes, its just a matter of reprioritizing what you do first, in the context of what will most impact their success.

4. How do you evaluate YOUR success? I’ve talked to some really good performance managers who view their ultimate success as getting a PM PROCESS in place, rather than a long checklist of completed projects. One performance manager once told me that his success would be having such a good process in place, that he would ultimately work himself out of a job. Scary for most of us, until we look at the value that gets created, both organizationally, and with you personally. Trust me, if you create that much value, and God forbid your organization doesn’t value it, there will be many organizations waiting for a shot at hiring you.

5. Have you spent a day in your “customer’s shoes” lately ? When was the last time you got out of the corporate HQ and really saw “first hand” the activities you are responsible for measuring? I’m not only talking about the “young gun” MBA types, but many of us who have spent a little too much too much time on the office.

A client once told me that the best test to find out whether you know your customer, is the degree to which you can name his/her customers and their needs (i.e. one level removed).
How well do you know your customer’s customers???

6. How often do you ask “SO WHAT”? Take your last report or presentation, go to your conclusion page and ask, from your customer’s standpoint- “SO WHAT?” If you get stuck on that one, its back to the drawing board, because that’s what the ops folks are asking every time you put something new in front of them.

Of course, there are many questions like these that will help you reconnect with your internal customers. But my real purpose in posing some of the above questions to us is to get us back (I say back, because if your worth your salt as a performance management professional, I know many of us get this intellectually, and have practiced it in the past) in the mindset of your customers. We all know what makes our boss tick. But remember your boss (CEO, CFO, VP Planning) are not going to get your recommendations and ideas implemented.

So as you wrap up this holiday weekend, do some good introspection on your internal customers and THEIR business. It’ll make tons of difference in how the rest of the year goes.

The “Buts” of Performance Management. This is one of my better puns. I know, that doesn’t say much for my other’s, yet I still think it’s pretty good. So I’ll stick with it at the risk of frustrating my readers for the next few minutes. Please bear with me.

One of the biggest challenges performance management professionals face is the neverending excuses that they hear from their internal clients. You’ve all heard them, “That’s interesting, …BUT we don’t track that information, …BUT that doesn’t apply to us,…BUT we’re too different,…BUT our culture just isn’t ready for something that radical, BUT… You get the picture.

About once a month, I’m asked by a client of mine who is being bombarded with these kind of BUT’s (or is that spelled with 2 “T’s”?- sorry I couldn’t resist!) how they should respond. So I figured now would be a good time to begin addressing this little dilemma, not by reacting to these “concerns” individually (perhaps I’ll do a series of columns on each concern at a later date), but rather by addressing what I believe is the root cause of most all of these concerns.

And that is that people inherently do not like change. It’s one of the oldest but persistent cancers in today’s business environment. Given the magnitude of change that has occurred, particularly over the last decade, it’s quite amazing how prevalent these arguments still are. But the fact is, people still resist change at every turn. Change goes against our most fundamental human desire to put “order” around “chaos”. And for many, “change” = “chaos”.

Tom Peters wrote a book in the late ’80’s called “Thriving on Chaos”. It was one of my all time favorite books, right up there in my personal top 10. Ironically, in that book, Tom was actually not advocating companies learn to live with chaos at all, but rather to view this apparent chaos in a different light. Successful companies, he concluded, were companies that learned to live in a perpetual state of change. To embrace it, not fight it. It is a principle that I believe crosses over into every aspect of business and life.

In fact, some of the most centered and serene people I know are those people who live with more change on a day to day basis that most of us could ever imagine living with. People who dealt with long term illnesses, death of young children, or countless other personal tragedies that would spiral many of us into the ultimate crisis state. But many of these people who have learned to deal with change effectively see these events as part of life’s plan. Some even view them as opportunities for personal growth. What we see as pain, they see as one of life’s major turning points. Maybe you’ve never seen one of these people in in action, but I have. When you see it, its not only one of the most beautiful things you’ll ever experience, but it will often put your own set of life changes into perspective instantly. Sorry to digress, but I think that little detour will be helpful in driving home the point.

Sometimes, it just comes down to a “glass half full” interpretation of things. For example, if your asked a question that involves collecting some performance data, and you don’t have it readily available, you have two courses of action. One, you could rationalize that its just too damned difficult to get and your not interested in getting it….so why not fight it. Essentially you’re saying, “that’d be interesting, BUT we don’t track that data, so we can’t go forward with this “. The other interpretation is “That’d be interesting, and while we don’t track that data now, maybe that should be telling us something! Maybe we should start tracking it!”. In fact, I’ve worked with many companies in which the PROCESS of gathering performance data they didn’t already track, actually created more insight than the purpose for which the data was ultimately needed. You see, with the latter interpretation, you get a 2-fer. You get value from the result, but you also get value (often MORE value) from the process of getting to the result.

Since most of you are on the receiving end of the “buts” (jeez, this is really getting bad), its not only a matter of changing your perspective, its also a matter of changing the perspective of your client’s. And while it may often appear to be a unattainable goal or un-winnable battle, it’s your persistence that will make the difference. Many performance managers will avoid such conflicts and accept a much slower pace of change than would otherwise be possible. But having gone down both paths, I’ve found that going ‘against the current’ more often than going with it, while almost always generating significant pain, will win you the culture you ultimately desire. In these cases, YOU are the catalyst for change. And in most cases, the culture will follow. Maybe not tomorrow, or next week, but it will follow.

One last thought on “buts” (last pun, I promise). I once received a very sage piece of advice, when a colleague suggested that every time I was inclined to say “BUT”, to replace it with the word AND. I wont go into all of his logic here, but I guarantee you, if you do this for a week of so, it will change your outlook significantly. I encourage you to use that little trick, as it can be rather infectious on both your staff and that of your internal customers

Every now and then, you’ll get a reading on a key metric that is just too good to be true, or too bad to be real. When you do, its time to do some challenging of that data before you draw conclusions and “run with it”. Most often you’ll find something that created the anomaly. Even if your initial impressions were if fact accurate, what’s the harm of being a few days off on the reporting timetable in the interest of data integrity? In the end, a small price to pay.

We’re all taught in school to double check our work. Remember reverse engineering your math and see if you get the same answer? Remember how many times you caught that stupid mistake? Remember checking and rechecking that spreadsheet just because something didn’t feel quite right? Remember how good it felt when the world finally made sense?

For every error we catch because something didn’t feel quite right, there are those errors that are not caught because we’re not looking for them. Remember the last time you accidentally bumped into that spreadsheet error “by accident” 5 minutes before that key presentation? Not quite as good a feeling?

So what makes us so diligent at validating our work on some data but “cutting corners” on others? One reason is that it’s human nature to have hypotheses about the performance of our business. Assumptions about what certain initiatives should produce. And when they do, it’s human nature to accept it and move on. Think about that IT manager that completes an enterprise system implementation, and sees immediate results in efficiency. It’s only normal to accept it quickly as truth, and move on. We all have a burning desire to be right, even if the data is just a little too good to be true.

A good friend of mine is an equity trader who trades on technical signals and observations (i.e. he works purely off of chart breakouts and breakdowns). I find it fascinating how he is able to keep such a level head, no matter how good or bad a day he appears to have. You see, most investors measure their success on a “mark to market” basis- essentially judging their success on the increase or decrease in the value of their portfolio at each market close. Most traders are either really enthusiatic, really disgusted, or neutral at the end of each day. However, my friend has an uncanny ability to always stay neutral. He knows that if he has a 10% gain in his mark to market numbers, it is likely an anomaly. He knows the data and performance patterns so well, that if and when such a condition occurs, he knows that there is something well beyond his trading savvy that has likely driven it. His first order of business is to make sure his calculations and assumptions are correct- that the extraordinary gain or loss did in fact occur. If so, he accepts the windfall or extraordinary loss, knowing that the anlomoly will likely be corrected in the future by an offsetting experience that will bring his portfolio back to reality. Of course, there may be times where he has changed something in his methodology that has yielded the improvement. But its only after challenging his initial data and initial impressions that he will ever draw that kind of conclusion.

So my message for today is to avoid “kneejerk” reactions to performance data, even if, on the surface, it appears easily explainable. Validate it, challenge it, and stress test your observations. You’ll build a stronger reputation of data integrity, and your successes and “wins” will no doubt be sweeter.