Deafening Silence — Failing to communicate in times of chaos…

Posted on November 9, 2011 by Bob Champagne

Climate chaos wreaks havoc again…

Once again, the Champagne family has fallen victim to climate change in the Northeast, or at least two unfortunate weather incidents, whichever your personal/political inclinations require. First came hurricane Irene, and then, last week, the early fall snowstorm. Fortunately for me, I only suffered two days without power, as I was traveling on business for the week. Unfortunately for my family, they were asked to endure almost a week without power, as the outages in the Northeast lingered and local utilities struggled to get customers back in service. But, as of last night, the lights have come back on and life has gotten more or less back to normal.

As I wrote a few weeks back in my “Eye of the Storm” post, nearly every customer understands the nature of uncertainty and can recognize what are, and what are not, predictable/preventable and unpredictable/unpreventable circumstances. Hurricanes and early-season blizzards certainly fall into the latter category. But let’s face it, while we all get angry and frustrated, we are also able to temper, at least somewhat, our emotional responses when we recognize that such events are beyond anyone’s control. There are, however, aspects of such situations that ARE within our control. And failing to deal with these in the face of unfortunate events…no matter how controllable or predictable…can leave us with a feeling of legitimate anger and frustration. Such was the case with the extended power outages this past week.

Crisis management — it’s all about eliminating uncertainty…

I’ve talked a lot in recent months about sources of satisfaction, and, perhaps more importantly, dissatisfaction. But I keep coming back to “fear and uncertainty” as the biggest driver in today’s world, and perhaps the most critical in times of crisis, whether it be natural disasters, political upheaval, or simple technological failure (three whole days of no Blackberry service?). And while we may view much of this as being “out of our control,” as CCO’s, our response in terms of customer communication is ALL within our control.

How to #FAIL

So imagine the frustration of customers when they experience the following (all of which are real examples my family encountered during the recent storm event):

– A website with detailed outage map showing the number of affected customers in each town, and a link (which turned out to be just “bait”) to outage status updates. The status update reported that 95% of customers would be restored within five days. It wasn’t until you clicked a few more towns on the map (assuming you did) that you realized this was a “general” update and not specific to anything. Moral of the story — if you know nothing definitive about the situation (which they clearly didn’t because they were still assessing damage), then admit as much and state, instead, when you DO expect to have meaningful information to share. Lame (and possibly misleading) attempts to suggest that you’re providing legitimate and specific updates when you are not is easily seen through.

– The company’s use of social media during the peak parts of the outage was virtually non-existent. Less than ten Twitter messages during the first 24 hours of the outage, conveying insightful information like “We know there’s an outage”, “This was a really big storm”, and “Stay away from live power lines” could have been administered by my 95 year old grandmother, in terms of content provided (she apparently knew as much as they did) and technological savvy (she may very well know more than they do about how to leverage social media). IRONICALLY, my wife learned that our power was restored by a FRIEND via FACEBOOK!!! And when the information from the company did start coming out, it was hitting their feed well after the updates had already unfolded. And instead of displaying the feed prominently on their website, they buried it behind the “Follow us on Twitter” button (if you personally didn’t go track their Twitter page, you were “SOL,” as they say). In their defense, I suspect there may have been just one single employee responsible for managing all of these updates, but that’s a subject for another post. The company clearly spent tens of millions on the recovery effort. How much effort did they expend on communications and messaging throughout the crisis? Feels like very little.

Now THIS was a useful message!!!!

– A 500+ word letter from the CEO of the company explaining to us in lengthy, florid prose pretty much the same thing — This was a big storm, it was unprecedented, we are trying our best, and reasserting the general commitment of 95% by x date…which means NOTHING to an individual customer. To add insult to injury, we had to listen to the CEO pontificate about how this was the most challenging thing he’s experienced in his career, and how proud he is of his staff, and how concerned he is about his puppy who is out in the cold (OK, the latter is an embellishment of what was really said, but you get the idea). Spare me the lecture on what you can’t do and tell me what you can!!!

– An outage center (automated phone line) that asks (begs) you to report the outage and risky situations, but offers NOTHING else during the automated call, not even the most general, non-specific, non-committal statements, which, admittedly, would have frustrated me…but let’s at least be consistent. All that told me was that they cared a lot about what I could do for them in terms of providing information, but very little about what they could do for me. Heck, it would have been nice if they’d at least asked me to tell them if I’d seen repair work in my area. This might have suggested that they had some interest in learning about the status of restoration (even if they didn’t know themselves).

This entire ordeal, which plays out every time there’s a natural disaster or big crisis event (be it flight delays, hurricanes, or war zones), is becoming an interesting one. We are witnessing a sea change (or maybe it’s a teachable moment) in how we can and should deal with such situations. And it’s becoming clearer that customers (not companies) will probably be the best sources of information during these events. Social media offers a great conduit into that feedback and has proven time and again to be the best medium to solicit and report real-time feedback. The process has clearly changed, perhaps unbeknownst to the company. That, to me, is not only the emerging solution given today’s technology, but the most obvious.

How about we beat the incumbent at his own game?

What is not so obvious is the degree to which companies that we have entrusted to be the “custodians” of information — companies whose primary role is to service customers — remain so clueless as to the most effective ways of providing that service. They appear to be, at best, blind to, and, at worst, simply resistant to using these new channels and changing their internal processes to accommodate them. They are in the best position to aggregate customer information from the variety of channels available, merge it with what they know operationally, and report relevant and meaningful information in real time. Oh and, by the way, imagine the customer engagement you’ll achieve along the way!!! — the ultimate in crowd-sourcing for customer service. But, sadly, this doesn’t happen, and probably isn’t even on the radar screens of most firms. Instead, the more likely scenario is that they will be bypassed completely by some more agile and responsive third party (or perhaps an unseen competitor) that sees in this challenge an opportunity to leverage information and create a unique and refreshing new solution to an age-old problem.

COULDN'T SOMEONE PLAY THE ROLE OF AGGREGATOR OF UPDATE AND STATUS INFO, AND THEN DISTRIBUTE IT TO THE MASSES USING BOTH SOCMEDIA AND CONVENTIONAL CHANNELS????

History has shown us that customers react favorably and swiftly to this sort of innovation, by shifting their loyalty and their dollars to those who demonstrate a willingness and ability to solve problems. All of which leaves me wondering how it is that the company I’ve entrusted to solve these problems for years could be so utterly incapable of recognizing the possibilities and seizing upon the solutions that have been staring them in the face all along.

I recognize that this is a tough assessment and a somewhat emotion-driven “rant” at an industry I’ve spent considerable time advising over the years. And, make no mistake, there are some awesome utilities out there that will step up to the challenge with these and other creative solutions. But, at the same time, there are many who prefer not to rock the boat, to play by the old rules rather than invent new ones. And it’s these organizations I would like to see upstaged quickly by a more innovative and competitive force. Not to wax too lyrical here, but in the stormy waters of competition, your boat is rocking whether you want it to or not!

Fear and uncertainty — Make it go away with clearer, more relevant, and timely communication. You’ll overcome the barriers that stand between you and a base of engaged, satisfied, and loyal customers.

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

Service In the Eye of the Storm…

Posted on September 15, 2011 by Bob Champagne

Stuff Happens…

We’ve all been there. The cancelled flight. The lengthy power outage. The inconvenient disruption in internet communications. Higher than normal dropped cell calls. You’d think that whoever is calling the shots on the weather patterns lately would know the magnitude of chaos they are creating in our lives. It’s enough to drive you nuts!

God grant me the serenity to accept the things I cannot change…

Hurricane Irene, though relatively tame to a gulf coast native like myself, once again forced me to reflect on how storms like this can disrupt life’s little conveniences. On the one hand, it’s quite amazing how stressed and freaked out we (including yours truly) get with what are, in the end, minor inconveniences–many of which would be regarded as luxuries elsewhere on the planet.

Let’s face it, we’re all human, and while we get as frustrated as the next person when inconvenienced, we all are capable of realizing and accepting that certain events simply fall into the category of “S**T HAPPENS”. While nobody likes to wait on hold for two hours to talk to an airline, most of us “bite our tongue” when talking to the agent because we know they are probably as stressed, if not more so, than we are because of what they’ve had to endure during the time we were on hold.

…and the wisdom to identify idiocy!

On the other hand, it is equally amazing, given the advances in service capabilities and technology, that we are unable to avoid, or at least help customers to tolerate, the downstream impact of these events. Consider the following examples from last weekend’s flight mess caused by multiple airport closures in the Northeast.

Text message informing a passenger of a canceled flight fifteen minutes after the last alternate departure
Text message instructing the passenger to CALL the airline for additional information, exponentially amplifying an already uncontrollable workload/call volume
Call-in number with an automatic message that says essentially, “we have too many incoming calls, call back later.” Really? A six-billion-dollar Fortune 100 company in 2011 with a message like THIS?
Call queues (for airlines who, under normal circumstances, pride themselves on differentiating between “tiers” of frequent fliers”) that suddenly lose all such distinctions in the midst of a crisis–with hold times from two to three hours throughout the weekend
A website containing little if any useful information on the situation at hand, self-help suggestions for what I could do in the meantime, or anything else that might have alleviated the stress
Complete absence of any visible “behind the scenes” or back office process to re-book flights automatically (my reservation was essentially cancelled leaving me to re-book myself with no apparent prioritization for my loyalty status
A workforce that, despite all their effort and hard work, (and I do mean hard work because they had 200 reps working what I estimate to be at least 300,000-500,000 displaced passengers), did what???

Crises are the real MOTs…

There has been a lot of talk in recent years about “Moments of Truth” (“MOTs”) when it comes to service interactions. We often think about MOTs from a transaction standpoint, e.g.,when a customer calls to connect service, ask a billing question, get updated about a service interruption, or simply to complain about an inconvenience. For me, though, the real MOT is what happens in a true moment of chaos or crisis–when the customer’s daily life is truly interrupted, i.e., when they actually expect things to suck. It’s at that moment, when natural optimists become pessimists, that one of three things happens:

Customers’ bad expectations are realized, either creating or reinforcing a perception that when unforeseen events occur, things will inevitably become hopeless, i.e., a feeling of general resignation.
Lowered expectations become their worst fears…and you become recognized as the company that falls apart rather than shining in the face of adversity.
They are completely “WOWED” by the significant, yet counter-intuitive, responses they see from you at a moment when they have every expectation in the book for not doing so.

For most of us, it’s typically the first experience, and we move on with our lives, disappointed but not surprised. We remain only marginally engaged, and perhaps, when the next opportunity presents itself to switch to another supplier, that new supplier may have the proverbial “edge”. But for companies who really understand these dynamics and strive for true loyalty, they know the power of the third outcome above, and the value that small, but memorable, responses can have in these real MOTs.

What if…

…I had received a text message telling me that an adverse weather situation was unfolding and that by responding “helpme” to their text, they would search for available options and contact me to see if I wanted to initiate any of these two or three alternative plans? What if the message I heard when I called (instead of “We’re busy. Call back later.”) had directed me to a website that contained actual useful information (even if nothing more than “We’re at the mercy of the weather and the airport, and we won’t know anything until tomorrow at 2 p.m.”)? What if instead of my reservation being cancelled, they had proactively re-booked me on another flight? And what if (perhaps for only their million-mile customers) they had actually offered me some REAL solutions, like, for example, flying on a different airline or going through an unconventional (perhaps even inconvenient and uneconomic) routing.

Insanity=

Doing the same thing over and over again, and expecting a different result…

We all understand crises and uncontrollable events. We all know that we cannot blame an airline or a power company for things like earthquakes, weather, some mechanical failures, and the like. And we know, as well, how inappropriate it is to blame the people who are doing their best in a bad situation. But I would argue that in a time and era where margins are thin and everyone is looking for new ways to differentiate themselves…and particularly in a time when customers have been conditioned to expect the WORST from us…that is the perfect time to step up and offer creative and inspiring solutions.

Some of these may be BIG things–the kind of heroics you hear about in commercials, performances that border on the uneconomic and, perhaps, unrealistic–solutions that would drive a company to the poorhouse if they were truly institutionalized (Can anyone forget the FEDEX driver who couldn’t get the drop box open, so he lifted the entire multi-hundred-pound box into the back of his truck?). But I would contend that it’s the little things that mean the most–the things that show you’ve had the FORESIGHT to understand how a customer is truly affected in a crisis. ANTICIPATE your customers’ most likely state of mind in these situations, and develop small solutions that can, in fact, be INSTITUTIONALIZED.

-b

Beyond KPI’s : Measuring the “execution” of your plan…

Posted on August 5, 2011 by Bob Champagne

Simple scorekeeping isn’t enough…

I am always amazed at the number of organizations that equate Performance Management with measuring only business results and a handful of supporting KPI’s, and calling it quits. Performance Management is much more than that, and I would argue that if that is the extent of your PM program, you have a pretty good chance of doing more harm than good.

I guess we’ve all gotten caught up with the notion of keeping things simple–seeing the “forest through the trees” if you will. And there is some merit to that type of thinking. After all, it’s difficult to manage at the strategic level when the organization measures too many seemingly irrelevant things. And there is no shortage of “experts” in the field preaching about the importance of limiting the number of KPI’s and “optimal” numbers of business metrics. To some extent, I agree with their argument that a highly focused set of KPI’s is essential to a good PM program. But it doesn’t stop there.

If you’re a regular golfer like me, you certainly track your scores over time. After all, you can’t get better if you don’t track your results. This is the business equivalent of your annual P&L and quarterly earnings trends.

Good KPI’s also tell us about the “drivers” of your success…

But if you play often enough, and aspire to get better, you’ll undoubtedly do more than that. You’ll begin to track things like “% of fairways hit”, “number of greens in regulation”, “average putts per hole”, “up and downs”, etc. Every sport has its key statistics, just like every business has its Key Performance Indicators (KPI’s). In fact, many golfers now track these statistics on their “Sky Caddies” or mobile phones in real time, just like most businesses now track their KPI’s on a myriad of desktop and mobile applications that are available for that purpose.

But for most golfers, and for many businesses, that is where their PM stops. Sure, we all do things to get better and “manage our performance” over time. In golf, we practice and practice more. We spend hours at the driving range hitting balls. We read countless magazines, watch instructional videos, and pay others to “fix” our swings. In business, we train and coach our staffs, improve our work environments, redesign our processes, and invest in new equipment and technology in pursuit of getting better. But in terms of tracking our progress, many of us still revert to the same limited suite of KPI’s to tell us whether we’re improving or not.

Are good KPI’s enough?

A few weeks back, I read Bob Rotella’s new book called “the 15th club”. Bob is a renowned sports psychologist who has coached many of today’s tour professionals–not on the mechanical elements of their game, but on the mental aspect required for peak performance. I’ve referenced his work in some of my past posts, like “progress over perfection,” because of the strong parallels I see between his teachings and corporate performance management.

One of the key points Bob makes in his latest book is the difference between how good golfers and bad golfers think about their shots, and what they spend their time measuring and tracking. As any golfer (beginner or professional) knows, “thinking” about a shot, both before and after its execution is inevitable. It’s WHAT you focus on that’s important.

When most of us hit a good or bad shot, we think about its impact on our round. Maybe we ponder the effect the shot will have on our statistics. We “shank” a ball into the trees and translate that into hitting one fewer fairway. We miss a long putt and worry about the impact it will have on our putting average. It’s hard not to look at each failure through the lens of the impact it will have on our overall results. It’s only natural. People around us will tell us to “shake it off” and stay positive. Well, the fact is that human emotions don’t easily allow for that. More often than not, we retain that thinking, allowing it to work itself into future shots and future rounds. One bad shot leads to more. It’s how good golfers get into slumps. Most golfers who play regularly know how to strike a golf ball (they’ve done it hundreds of times), yet it’s not uncommon to see some really ugly shots repeat themselves several times during a round, and for that ugliness to then continue into future rounds.

Measuring HOW you execute is often just as important as the results…

Rotella doesn’t preach the mantra of just “shaking it off”. Instead, he proposes new things to focus on and measure. His premise is that even the pros only hit a few “perfect shots” per round. After all, golf (and life) is not a game of perfection. The key is recovering after a bad shot and finding creative ways to score amidst the imperfection. After a bad shot, he suggests exploring the things that are essential to a good shot. Did I go though my pre-shot routine? Did I choose my target well? Did I visualize the trajectory I wanted? Did I finish my swing? If I did, and the shot did not execute well, then accept it and move on. Sure, there are times where the fundamentals may be broken, but that’s for your practice time, not in the middle of a round. In competition, you work with what you have, the strategy you select, and focus on whether you executed that strategy or not.

More often than not, measuring the things that are essential to good execution is as important as measuring the execution itself. In fact, thinking about the outcome DURING execution can actually be counter productive. It’s why most pro golfers try to not spend too much time looking at their stats or even the leader-board during the round.

Measuring critical behaviors and practices…

In business, it’s just as important to measure the parts of a process or activity as it is to measure the outcomes. In fact, good companies often measure the presence or absence of specific instances of certain behaviors essential to success.

When it comes to safety performance, good companies have gone beyond simple reporting of lost time and “recordable” events, and even beyond things like “near misses” (all valuable KPI’s). In addition, they look at the presence or absence of safe behaviors and practices. Good call centers go beyond measuring transaction times and satisfaction levels and now look at whether the rep demonstrated certain behaviors that are linked to a successful resolution of an inquiry. If your plan is a good one, and you understand how specific practices and behaviors drive your results, then measuring those behaviors is often as important than the result itself.

Good companies trust their strategies, processes and policies to produce the outcomes they desire and measure their effectiveness at adhering to those activities. If they don’t produce the specific business outcome, then they will undoubtedly go back to the drawing board and evaluate whether the plan was a good one and redesign if necessary. But they won’t do this in the middle of execution just as good golfers don’t do it in the middle of competition.

This may sound a little like I am opposing the very flexibility that is needed for managing in real time, and enabling in-situ course corrections. But that’s not my intent. In fact, what I’m saying is that you should have a set of execution measures and ways of thinking that will help you focus on the right things during execution rather than doing that by the “seat of your pants” and relying on a distant set of KPI’s to navigate that process.

A good performance management system starts with the right goals, objectives, and KPI’s. But these KPI’s will not help you manage the execution of your strategy and focusing on them DURING execution will often cause more harm than good. Instead, measure the behaviors and actions that were part of your strategy even if specific day-to-day outcomes don’t pan out exactly like you envisioned. Only then will you be able to consistently execute and determine if your plan is working, and whether or not it needs retooling.

-b

Data, Dashboards, and Debt Deals…

Posted on July 25, 2011 by Bob Champagne

Bear with me, folks! Today I’m going to take a little departure from my regular discussion of business performance, and talk a little bit about the manner in which data and indicators are used (or misused) in the debate we are having now with respect to US economic policy and direction. As is often the case, the same principles that are critical to business performance management can be just as valuable in our public policy debates. So I think the departure is both timely and relevant.

Today, the President and Speaker of the House Boehner… Blah…Blah…Blah….(Yawn!)”

If you’re anything like me, these “debt talks” of late have become nauseatingly irritating. No matter which side of the political aisle you occupy or favor, it’s hard for anyone to see this as more than a glorified adult schoolyard brawl. It is certainly not rare these days for our elected officials to engage in such a political circus, but this one has taken on a new level of insanity.

What we have here is a public debate about financial and economic policy that is occurring devoid of any meaningful facts or analysis. I’m not saying that the facts are not there, but they have most certainly been kept out of the public debate, only to be replaced by the rhetoric and soundbites of political hacks. And that’s a recipe for a solution that will at best be a meaningless and impotent compromise , and at worst, a precipitator of market panic and economic chaos.

Needed: Basic Facts (AND a Common Language)…

Many of the conversations I witness on this topic, regardless of whether it’s at the family barbecue, the water cooler, or various financial and academic circles, seem to turn a blind eye to the basic facts necessary to contribute in any meaningful way to the debate. Ignorance? Perhaps. Intellectual laziness? Maybe. Pure emotional politics? Probably.

Sure, we see lots of numbers thrown around, but most of them either lack sufficient context, or are deliberately telling only a fraction of the story. And even those facts need a translation guide to determine what they really mean. Does a tax increase mean a raise in the tax rate, or simply continuing with a previous tax cut? Does spending mean decreasing a future forecast, or a cut to the actual baseline? Without some real digging and filtering of the noise, it’s virtually impossible for the average person to have an educated opinion about any of this. Given how “muddy” the information has become, it shouldn’t surprise anyone that this has taken on a purely emotional level of debate.

Any good debate that has a prayer of resolution, whether in business or public policy, starts with a basic understanding by all parties of a key set of “accepted” facts, understood in the same basic context. That type of “common language” allows the debate to hinge on differences in principle and philosophy, which can be argued toward some resolution (or acceptance of a path forward). Without that common language, the vast majority of the dialogue becomes noise, tied up in debates about the validity and relevance of the data amidst the corresponding rhetoric that accompanies both.

Creating a Common Starting Point…

Years ago, and for a brief moment, an eccentric presidential candidate with an irritatingly noisy voice attempted to change the debate by introducing some semblance of simple, fact-based information into the political debase using very basic illustrations. It came in the form of hand-drawn posters that were later imitated by nearly all Sunday morning talk show hosts and other political commentators. Who can forget those “white boards” presenting analysis of the conflicting vote counts in subsequent election results?

Lately, however, the attractiveness of utilizing SIMPLE factual information to inform these debates has clearly waned. I’m not sure what the main culprit of this is–whether it’s pure information overload, or the shortening of our collective attention spans to be able to process it, but the truth is that simple facts themselves are no longer informing our public debate.

Sure, there have been some attempts to inform the debate through unbiased factual information. For example, the national debt clock presents many key statistics that are pertinent to the debate. And back in 2008, David Walker, former head of the GAO presented, as part of his ” Fiscal Wake Up Tour “ one of the best unbiased visualizations of our collective financial health I’ve ever seen.

Much of what Mr. Walker presented in this undisputed picture of our economic health in 2008 (most of which is still relevant today) would be invaluable as a context and starting point for the conversations our politicians are having at the moment. Instead, we now operate in a world where we launch straight into policy debates without any shared or accepted fact base and no common language.

Stepping up the quality of our debate (in government and business)

Here are 5 suggestions for getting our debates better informed and more relevant:

Respect the audience– Too many of our leaders refrain from using unfiltered data to drive dialogue within their organizations, largely because they view it as too complex or advanced for the audience to effectively process or comprehend. While your audience may not operate in the same business or intellectual circles as you, most have a capacity to detect BS and see through overtly biased narratives.
Keep it simple– In some cases, the data needed to inform the debate is in fact complex (particularly in areas like the current debt discussions). In such cases, it’s the leader’s responsibility to simplify it. The above presentation from David Walker is an excellent example.
Make it visible– Make the information easily accessible and visible. Repetition and visualization are usually the keys.
Create a common language– be clear on what the information you present means, and the context within which it operates. Context is as critical as the validity of the data itself. Creating understanding and alignment around both are essential in focusing the dialogue toward a productive end.
Limit the “noise”/ rhetoric- Commentary is ok, and often valuable. But when the narrative departs from the factual information presented, and becomes visibly biased, it becomes mere rhetoric and quickly begins losing credibility.

Maybe I’m being a bit of a Pollyanna, but I believe we could have avoided much of this political mess if those at the core of the debate were aware of the basic facts and context surrounding it, and transparent enough with the data to allow them to defend their REAL positions.

These lessons are as critical in managing the performance of a business as they are in managing the performance and direction of our public policy. Hopefully, we can all learn from this current debacle, and start our future debates on more solid footing.

-b

A CPO’s Declaration of Independence

Posted on July 4, 2011 by Bob Champagne

At its core, the word “independence” means being free of outside control or influence.

We celebrate independence from many things: from the oppressive control of people and governments, to simply becoming independent from our once protective or “controlling” environments. Every 4th of July, we in the United States celebrate our national independence from prior years of British control, and its declaration of that freedom in a charter that would define the very freedoms and liberties we in the US enjoy today. Most often, when we celebrate “independence,” whether it is as a nation or as individuals, we are celebrating a moment in time, or a phase when that independence is either declared, demonstrated or both.

But there is another type of independence we should also celebrate, i.e., the act of distancing oneself from the (isolated, blind, and often inappropriate) influence of another person or organization’s actions. It is more of a “state” that an organization exists within, and one that defines the boundaries of its existence, than it is a single event or moment in time. Such is the case with most corporate oversight and regulatory functions that have emerged in recent years.

As an aspiring young auditor over 20 years ago, I remember this type of independence being drilled into my head more than any other directive in my early career. It’s a principle that has shaped both external auditing as a discipline since its inception over a century ago, and one that has defined internal auditing now for decades. It is also a principle that today defines most common forms of regulatory and oversight functions, particularly when issues like safety and security are involved. But these functions, while sometimes viewed as oppressive in their own right, were initially set up to prevent inherent conflicts of interest that arise in the absence of “common sense” checks and balances.

While many would call these functions a “necessary evil,” their independence and objectivity gives us comfort that someone else is watching–someone who does not necessarily have an “axe to grind” or a “dog in the race.” And if positioned correctly, this independence can also be a powerful enabler for the business by providing outside and unfiltered information and perspectives that are not easily observed by day-to-day operating management. Learning how to create that balance is critical to any function performing in that type of advisory or oversight capacity.

Today, the role of the Corporate Performance Manager, or Chief Performance Officer (CPO) as some companies have positioned it, is one in which the concept of independence and objectivity is becoming increasingly critical. Just as auditors have had to weather the perception of being the “bad guy,” so it is as well for the CPO. In fact, many companies that have deferred making the decision to have a Corporate PM function, have done so to avoid creating another oppressive layer of control, and avoid the animosity that might get created between operating and corporate management. But it is these organizations who sacrifice a very significant benefit that a Corporate PM function can deliver. I would submit that it is not the presence of independent advisory or oversight functions that create these problems, but rather the way they are set up, chartered and managed that does so.

So how does this sense of “balance” get created?

Here are some common traits of successful Corporate Performance Management functions that have been able to use the principles of independence and objectivity in a way that enables more collaborative success, while providing the healthy oversight and control that is desired by the firm’s Board, Officers and Shareholders:

Organizational Independence and Visibility- Just as most Audit functions have a corporate responsibility to the CEO and Board of Directors, so it is the case with most successful corporate PM organizations. By the very nature of their reporting relationship to the CEO (or equivalent), they eliminate the very conflict of interest with specific business functions that can compromise more integrated and synergistic solutions from occurring.
Strategically Balanced– Their charter is driven by the Firm’s Balanced Scorecard, rather than limited subsets of operating metrics that may yield more limited operational successes at the expense of the more balanced set of business outcomes desired by shareholders
Non-Threatening- While their ultimate customer is the CEO, they view operating executives as a key enabler of, and partners in, their collective success. They do this by addressing issues and performance gaps in a way that makes the operating unit become successful in the eyes of the Firm’s C-Suite and Board, rather than their own visible value add.
Removing Barriers- One way they become viewed as genuine partners with operating management is that they use their corporate visibility and influence to break down barriers (like corporate politics, access to information, and cultural roadblocks) and unlock value that has often eluded operating management.
Inclusive and collaborative– Good PM functions are inclusive, not only with respect to their approach, but also in their delivery tactics. They often staff their departments with people from the operating units themselves (using short term and rotational assignments), increasing their operating credibility and ultimately developing real PM champions across the business.
Facilitative– These functions are far more facilitative in their approach, rarely performing direct roles in developing conclusions and implementation. While results are often the same as those they might have developed themselves, playing a background role and “leading” the operating staff to the right answers ultimately strengthens operating ownership for the conclusions and changes that ultimately emerge.
Share the Joy– Good PM organizations are often generous in giving credit for operating changes directly to operating executives. While they are successful at tracking corporate value delivered by the PM process, the credit for the implemented changes is often given directly to those who implement it.

The "bad cop" perception that is often ascribed to corporate oversight functions will never get eliminated completely, and will continue to be a factor as Corporate PM groups proliferate across the industry. By its very nature, there will always be times where their responsibility to the CEO and Board will result in the development of recommendations or the presentation of information that benefits the collective whole, rather than the specific interests of a particular business unit. But more often than not, the type of synergistic value we are looking for can make heroes out of operating executives while still benefiting the collective Enterprise.

So on this Independence Day, let’s remember that we can still preserve the independence and objectivity our profession requires, while being a strong force that liberates and frees our operating executives to reach their goals and ultimate potential.

Category Archives: Performance Management