Closing the Intelligence Gap - Gary Cokins on Performance Management

I recently attended a conference in New York City hosted by CFO Conferences titled Leveraging Analytics to Turn Data into Insight. I believe it was an eye opener for many of the accountants attending. Why? Accountants take pride in their number crunching skills and their ability to analyze financial income statements, balance sheets, and budget variances. But the conference speakers highlighted the type of analytics that focused on non-financial data rather than the accounting reports that in reality translate operational activities into the language of money – currency such as dollars or Euros. A key takeaway was the CFO function should expand its role beyond toiling with compliance and regulatory reporting – counting the beans – to analyzing what best actions grow the beans. Accenture’s Jeanne G. Harris, co-author of the recently published book Analytics at Work, was the kick-off speaker. Her message was that the stakes have never been higher for managers to make better decisions by choosing from abundant and available data. She provided case studies describing companies that successfully leverage their data to out-think, out-smart, and out-execute their competitors. High-performing enterprises are building their strategies around data-driven insights that generate results from the power of analytics of all flavors, such as segmentation and regression analysis. For example, the business model for Netflix, the DVD movie rental company, is basically based on an algorithm that suggests to its customers next rental choices based on each customer’s rental patterns and others similar in preferences to them. One of the more inspiring presentations was from futurist Thornton May, Executive Director of The IT Leadership Academy and author of The New Know: Innovation Powered By Analytics. Thornton’s message emphasized a shift toward applying predictive analytics. He observed that in today’s environment, finance and operational executives need a working knowledge of not only what just happened but also on what will happen next. To get this knowledge requires real-time, insightful data – specifically from analytics. He noted however that identifying and harnessing the right analytics is a struggle within any organization given the vast amounts of information available, the different disparate technologies in place, and the conflicting departments who own the data. The presentation from David Axson, a management consultant, reinforced the need for predictive analytics. His message was that increased volatility is now the new normal. Examples of volatility include consumer preferences, foreign currency exchange rates, and commodity prices, just to name a few. Trends can develop quickly such as oil dependence, emergence of country economies (e.g., India and Brazil), and instantaneous Internet-based global communications. Unanticipated shocks can come from occurrences like the Asian tsunami, H1N1 flu, or the current global credit crisis. This means that traditional practices like detailed annual budgets and five year plans can quickly become obsolete. Axson observed that a shift must be toward more agility, speed, frequency, and visibility in reporting of all information, not just managerial accounting information. More importantly, the reporting must more quickly lead users to gain insight, inferences, and conclusions. Therefore, rather than the accounting department annually producing detailed line-item expense budgets each month, the shift is toward rolling financial forecasts with less detail and more summarized spending as the planning horizon stretches into the future. The sources to calculate the levels of resource capacity and spending come from a variety of other forecasts, such as demographics and sales plans. Predictive analytics are needed for each data source, and they are all eventually aggregated in the financial projections. Risk management cannot be left out of the equations. The potential magnitude of an unplanned and undesirable event and its likelihood of occurrence dictate how much risk mitigation insurance-like projects are needed. These too now are increasingly included in financial projections. Although CFOs are already pressured with compliance reporting, such as Sarbannes-Oxley, the main theme of the conference was to motivate them. Who could be better in an organization to promote the use of analytics? It can be the finance function. They are the numbers people.

Human brain researchers have determined that the more that is on one’s mind, then the more likely one will make an emotional decision rather than a rational one. Could this provide an explanation why so many decisions by managers and employees continue to seem irrational?

As background, the brain researchers conducted an experiment asking people to memorize a series of numbers in sequence ranging from two to seven numbers. After given their numbers all the individuals had to do was walk down the hall to a room and write the numbers down. But there was a catch. As the subjects walked down the hall another researcher interrupted them and offered a gift for participating of either a piece of chocolate cake or an attractive bowl of fruit. The results were surprising (and very statistically significant). Those with the least numbers to memorize chose the fruit whereas those with more numbers chose the cake. Why is this?

The brain researchers have observed that the human brain has two parts: a rational deliberate section and an emotional one. The competition between the two is fierce. When the mind load is light, as with those people tasked to memorize only two numbers, their judicious mind ruled the healthy fruit was more appropriate than the high calorie cake. In contrast, when the brain is more filled with items, emotion wins over reason. More about this research is 3/4ths into an with an interview on NPR's Fresh Air with John Lehrer, author of How We Decide.

Let’s put this finding into the context of today’s work world. How many managers are constantly juggling many priorities? All of them. You are too. For example, should I first reply to that e-mail, edit and finalize that paper due, phone that colleague, read that blog or twitter, or analyze that report?

When one has these types of “to-do” items, as a decision is thrust upon them, it is not surprising the choice is an emotional one? As examples, our largest customer just requested a special service. Should we charge them for it? Our most unreliable supplier just missed another due date. Should we replace them with another supplier?

You could debate each of those decisions either way. But if your mind is distracted with a dozen other priorities and no time to debate, it is conceivable the emotional brain section might overrule the rational one. Decisions deserve analysis. The margin for error is thinner these days, and what we deal with daily is more complex than a decade ago. The tools for business analytics have now become available for even the casual user. Read my article Why Will Business Analytics Be the Next Competitive Edge? If organizations delay becoming a culture for analytics and metrics then the quality of their decisions will jeopardized

I spend a lot of time investigating and writing about just exactly what enterprise performance management is and how to define it. I am concluding there is no exact way to summarize it. Everyone has a different spin on it.

What I do like is that in the last couple of years most everyone writing about this subject has realized that earlier definitions have been far too narrow. It is no longer described as some vague sort of CFO financial initiative about dashboard measures and better budgeting. It is so much broader. I recently read an article authored by I4cp, a human resources management research firm, that swings to the other extreme and includes just about everything covered in a MBA university curriculum. The article is titled Ten Critical Performance Issues for 2010. My initial reaction is that this article covers so much that we lose focus that the topic is mainly the integration of performance management methodologies with each one imbedded with analytics of all flavors. But I do like the five domains referenced in the article: leadership, talent, strategy, market focus and culture.

The article reports on a survey of how critical and important each domain is plus how effective organizations judge themselves at applying them. All five domains are important, but I always lean to strategy alignment and execution as the cornerstone or linchpin domain that draws in the other four. A quote in the article reinforces this in the subheading “Focus on strategy execution.” It says:

It isn't enough to formulate great plans. You've got to execute on them, and that requires getting everyone on the same page. Sounds easy, but most managers know it's tough to do well. Four out of five respondents said strategy execution and alignment are important, but less than a third said their firms are very effective at it. That's disturbing, and companies need to get a lot better in 2010 if they want to prosper.

We can debate definitions until we are blue in the face, but unless organizations progress with integrating the systems to realize the benefits of enterprise performance management, then they cannot optimize their performance. It is not just monitoring the dials on a scorecard or dashboard, but on moving the dials!

The beginning of the New Year saw laws in the USA making texting while driving a car illegal. Some laws also ban cell phone calls. Legislators are realizing that the distraction from texting and cell phone calls while driving is dangerous and are now considered as comparable to driving while intoxicated with alcohol. Maybe we should take these new laws as a signal to modifying our work lives as well.

To many who read this I will likely come across an out-dated old fogie who is out of touch with the digital and Internet age. But first hear my case before you dismiss me as irrational.

I have been productive in my career due to, I believe, my ability to contemplate and focus without interruption. I continue to be amazed by what some describe as the addiction to “always be on-line.” When R.I.M.’s BlackBerry system failed for several hours, the news media was quick to write stories about people who impulsively kept unsuccessfully accessing their e-mail. (See Bereft of BlackBerry, the Untethered Make Do.)

Almost everywhere one goes, people are heads down clicking and scrolling to an illuminated screen on their smart phone. When they awake, people access the Internet before brushing their teeth. When one’s plane arrives at the gate, what do many passengers immediately do? How critical can it be to receive or read a message a few hours or a day after the message was sent?

There are other signs that our society may be excessively pre-occupied and driven to distraction with being connected. An example is a recent news article titled To Deal with Obsession, Some Unfriend Facebook. It describes how some youth are making a pact to resist the frequent lure of the login. They realize they are obsessed with being and staying connected in real-time or near-time, and their grades and once normal life is suffering.

I realize we are in unchartered territory when it comes to instant messages and social media, such as Linkedin or Facebook. Isn’t there a downside to losing our personal time to think or do other productive things? When one is captive to messages, often from people we do not or hardly know, what is the impact to ourselves? How important is a Tweet that someone is now washing their clothes?

Research has revealed that in reality it is impossible to truly multi-task. The research, which I wrote about in article Can Performance Management Multitask, But the Human Brain Can’t?, cites that a human can only focus on one thing at a time, and any interruptions slows productivity.

Note to self. I may be offending some readers with my line of reasoning. If I interact less, then I may not bore others, I maintain my planning ability, I don’t have a false sense of my importance, road travelers are safer, and strangers next to me don’t have to endure my conversation.

Why is this relevant to enterprise performance management and devising better business analytics? Improvement requires ideas and innovation. Realizing those ideas can be then be stretched out over time. They are not instantaneous. Solitude is a virtue and essential to gather one’s thoughts and perspective.

I suggest we lighten up. Think more. Be more creative.

I am inspired by the article by David Fisher, Director of the Defense Department's Business Transformation Agency, titled Performance Management is a Team Sport. He describes how his organization shifted its emphasis from traditional individual performance appraisals to a method that aligns organizational core mission goals with objective outcome-based metrics and their targets.

The article’s title provides an obvious signal that Fisher places importance on teams. Fisher is not alone. A New York Times article title On Passion and Playing in Traffic interviews Joseph J. Plumeri, chairman and CEO of the insurance broker Willis Group Holdings. Plumeri describes how his leadership style has evolved from being a command-and-control manager to one where the key is making everyone feel like they are making a contribution. He values collaboration and debate.

Plumeri further describes that he spends roughly 30 percent of his time directly communicating with individuals in his organization. He says, “A two minute phone call or a handwritten note. I can’t tell you how important that stuff is. E-mails are easy but sometimes they get in the way of really feeling how somebody feels about your effort.”

When asked what is his best career advice, Plumeri answers, “Everything I have done I’ve done because I went out and played in traffic and something happened.” I have heard this referred to as NIHITO for nothing important happens in the office. I too believe you just have to get out there. Too often our work lives are in an echo-chamber.

Returning to David Fisher, I was thrilled to see confirmation that a culture for metrics is key for driving change and improvements. If you can’t measure it, then you can’t manage and improve it. Fisher strikes me as the type of manager that race track people call a thoroughbred racehorse as a deep closer. Other types are called starters (that quickly take the lead) and stalkers (that stay close to the front runners). I expand on this in my blog, How Are Racehorses and Performance Management Implementers Similar? I like Fisher’s style because as a deep closer he apparently takes a risk by lying low and being patient but understands that the finish line is at the end of the race – not in the middle of it.

Performance management is about completing its full vision – not just pieces. Good implementers like Fisher understand that this is a process, not just an event.

One of the common phrases bantered about in the USA’s debate about health care reform involves “bending the cost curve.” The phrase refers to concerns that any legislated solution must address reducing the continual increase of the USA’s health care delivery costs.

What are the issues with “bending the cost curve” for commercial and public sector organizations? One cost reduction approach that has always bothered me is the meat-axe approach of laying off employees – sometimes indiscriminately with shave-the-ice-cube percent department job cuts. I previously discussed this in my blog More Spocky, Less Rocky.

Some insights to a better solution might be gained by reading a blog by Purestone Partners consultant Michael Ensley and its subsequent comments. Ensley’s blog is titled Predictive Analytics, Business Intelligence, and Strategy Management. In the blog and discussion Ensley states, “Queries answer questions, analytics creates questions.” IT analyst James Taylor added a comment, “In fact, analytics can answer more questions, more complex questions and more interesting questions. Analytics can raise interesting questions but it has at least as much power to answer them.”

What Ensley and Taylor are discussing are the limitations of business intelligence (BI) and how analytics can enhance BI. Taylor is an advocate of predictive analytics describing its benefit as “turning uncertainty into usable probabilities.” Ensley’s message is that BI and analytics both need a context, typically missing, to know the “priority and purpose” of these tools. He describes this context, for opportunity or problem solving, as best communicated by strategy management (e.g., using strategy maps and scorecard/dashboard performance measures derived from them).

I agree with both of them. Just having lots of data and access to it all is not enough. Analysts and decision makers need additional help on how to more quickly and effectively leverage data, to convert it into meaningful information, and to gain higher certainty that gives greater confidence to take actions.

The death of Paul A. Samuelson, the first America Nobel Laureate in economics, is a sad but expected loss. He was 94. In receiving the Nobel Prize in 1970, Samuelson was credited with converting the field of economics from one that ponders theory about behaviors unintelligible to the common person to one that solves problems. This is economics that answers questions about cause and effect with mathematical precision and logic.

Samuelson developed the tools and equations that changed his field. He was also a leader who at the Massachusetts Institute of Technology recruited a premier collection of economists, many of who were also awarded the Nobel Prize in economics including Lawrence R. Klein, Paul Krugman, Franco Modigliani, and Joseph E. Stiglitz.

I was personally affected by him, as I imagine many of you were, by using his widely used textbook, “Economics,” first published in 1948. What was arguably a more important contribution from Samuelson was his breakthrough Ph.D. thesis, “The Foundation of Economic Analysis,” that taught professional economists how to understand their jobs by using quantitative analysis.

Why should we honor this man? On a global basis, we should appreciate that he advocated the ideas pioneered by John Maynard Keynes, the British economist who in the 1930s developed the theory that economic cycles need a boost from government spending or tax cuts to more quickly balance themselves. Samuelson supported these ideas that explain when government intervention is required, not solely relying on the assumption that private markets are self-balancing.

But a more important reason to honor Samuelson is his contribution of applying analytics. During his early career, mathematics had already been employed by social scientists, but Samuelson brought analytics into the mainstream of economic thinking by revealing how to derive reliable theoretical predictions from simple mathematical assumptions.

Why is this relevant to enterprise performance management? It is because the relentless application of analytics gets to the heart of getting the elusive improvement from each of the performance management methodologies – whether it be the correlation of key performance indicators (KPIs) in a strategy map to micro-segmentation analysis to determine which types of customers to grow, to retain, and to require – and the optimal amount of spending for each customer micro-segment.

Enterprise performance management is not just about monitoring dashboard dial needles – it is about moving them. Analytics provides the thrust.

The more you study, the more you learn. The more you learn, the more you forget. The more you forget, the less you learn. So why study? The less you study, the less you learn. The less you learn, the less you forget. The less you forget, the more you learn. So why study?


I recall laughing when I first heard this contradictory prose from my university days, but I had no choice but to ignore it and do the opposite. I was an industrial engineer then at Cornell University competing with top notch high school honors students. There was no option but to study hard.


Why is this relevant to our job and career today? Like many of you, I went to college and took classes and received grades. But when I left my scholastic education, which is formal and supervised, I then began my experiential education working in organizations. This is no different than you, and we all now know that the experiential education is much more behavioral and emotional than in the academic world doing your homework and raising your hand in class to show off to a professor that you know the correct answer.


The experiential education is unstructured and somewhat random. It comes at you. There is no course syllabus. You just start accumulating knowledge and wisdom through all the interactions emanating from your assigned tasks or projects plus the colleagues, customers, and partners you work with.


With the experiential education your direct line manager is like the professor. Ever work for a lousy one? Real life doesn’t happen in the same way as with your scholastic education. In a university information comes directly to you via lectures and textbooks, and then you get tested and measured. With experiential education you are continuously tested, but you never really see it happen or how it happens. Others, who may have a profound influence promoting or impeding your career progress, are always judging you.


What does this have to do with enterprise performance management? Plenty. The success for how its various methodologies get communicated and implemented is highly governed by managers and employee teams. If there is a culture for learning, metrics, and discovery, that will be a good start. If not, these social issues are barriers that will need to be overcome.

Silent films peaked in 1928. The shift to “talkies” – where a soundtrack was added to movies – was quick, and not all the directors and actors who were successful during the silent film era made the transition. Is this now happening to the careers of managers who cannot make the transition from traditional to progressive performance management methodologies?


Let’s back up for a little history class in film history. The French Lumiere brothers, Auguste and Louis, are credited as first film makers in the1890s. From its origins, the cinema was silent with no recorded soundtrack. Film was accompanied by a single instrument, usually a piano, or a small orchestra. D.W. Griffith was the most prominent pioneer of American films. Griffith’s Birth of a Nation made in 1915 and launching the career of Lillian Gish is considered the first breakthrough full length motion picture.


In 1927 the film The Jazz Singer changed everything. Stage star Al Jolsen’s singing voice blared from the soundtrack. The movie was so popular that entire film industry hastened to bring sound to movies. But the changeover destroyed several successful careers and built a multitude of others. Exaggerated pantomime performers appeared laughably outdated, and performers with thick accents weak voices faltered before a microphone. D.W. Griffith and other important and successful silent film directors failed to transition.


By 1932, the shift to sound was nearly complete, and concurrently it accelerated the Hollywood studio system with companies like Metro-Goldwyn-Meyer (MGM), Paramount, and Twentieth-Century Fox. Studio moguls signed contracts with actors, directors, and cinema photographers who were employed like factory workers assigned to a new project as soon as one was completed.


What is the parallel to what is now happening as organizations adopt progressive performance management methodologies like strategy maps, the balanced scorecard, customer profitability analysis based on activity based costing, and rolling financial budgets? Will the careers of managers wed to 1980s management methods (e.g., management by objectives (MBOs), standard product cost accounting, and fixed contract-like annual budgets) be replaced by a new breed of managers who get it – who understand the power of performance management methodologies? Are there any D.W. Griffiths working with your organization?

Writing a blog about enterprise performance management involves lots of typing for me.

Presenting a talk about it involves my speaking.

Want to hear and see me describe it in a short 8 minute recorded interview with a journalist? Just click on the hypertext phrase in the prior sentence. Warning: I no longer have the dark and full head of hair that I had when I was younger.

Do I talk like I write?

Let’s get a bit wild and imagine way out into the future about how a truly futuristic enterprise performance management (PM) framework might operate. (If you are impatient to read my blog on this, then go directly to the bottom and click on the link to the video. After viewing, hopefully then read this blog.)

Before we let our imaginations take off, we first need to agree on what an enterprise performance management framework is. I will stick with my long-established definition that PM is much broader than its typical description as a CFO initiative of better financial reporting with a bunch of dashboard dials. (As proof I have remained consistent, an in-depth description of PM is in my March, 2005 Corporate Performance Management – Myth or Reality?)

“Performance Management is the integration of multiple methodologies with each embedded with business analytics, such as segmentation analysis, and especially predictive analytics … to achieve the strategy and to make better decisions.”

A key part of this PM definition is the last words – to make better decisions. Ultimately we all need to understand and accept that good execution of an executive team’s strategy and its plans are the consequence of thousands of daily decisions made by employees at all levels in an organization. Today employees base these decisions on the limited information they have and often with their own self-interest or self-interest of the so-called silo department or process they work in. There can be conflict when decisions are not the best based because (1) the employee is unsure if they have the authority to make a type of decision, and (2) employee actions are not aligned with the strategic objectives formulated and constantly adjusted by the executive team.

A powerful lever for strategy execution is clarifying decision rights. As organizations grow in size, the approval process gets complex and foggy. Employees become unsure where one person’s accountability begins and another’s ends. Work-arounds then subvert formal hierarchical reporting relationships. Clarifying who has what decision-making authority and empowering decentralized decisions lower into the organization brings mission-critical agility .

Now to the future. As decision making becomes more decentralized and is delegated deep down to every individual employee, how can technology be harnessed to aid employees to quickly perform research and make the increasing need to make speedy decisions? Will they go their hand-held smart phone that is increasingly becoming computer-like? Maybe, but it is clumsy to do a Google search with a smart phone and tough on the eyesight as well. And each employee’s smart phone may not be tailored with rule-based decision making tailored to your organization and constantly changing conditions.

Watch this 8 minute Sixth Sense video of Patti Maes, a researcher of a Massachusetts Institute of Technology laboratory. (Think Tom Cruise in the movie “Minority Report.”) The video demonstrates examples for consumers. Shift your thinking to how employees could apply the same future technology for enterprise performance management.

I have examples I can think of. What are yours?

This week I attended the 12th annual Balanced Scorecard Collaborative (now called Palladium) Americas Summit conference. This conference attracts relatively more advanced and mature organizations who have implemented strategy maps and the balanced scorecard (BSC) concepts developed by Dr. Robert S. Kaplan and Dr. David P. Norton.

I consider this conference as an early predictor of what “new waves” and emerging trends may progress in the broader Performance Management community. For example, at this conference in 2007 I detected a shift for organizations to pay more attention to strategic projects and initiatives derived from the objectives in their strategy map – and then adequately fund them. This is now better known as StratEx for “strategic expenses” in performance based budgeting.

At this year’s conference I observed three areas receiving increased emphasis and attention to past years.

In Dr. Norton’s opening keynote speech he observed that a barrier slowing the progress in fully adopting the BSC methodology is what he calls “fragmentation.” This is the lack of coordination between and amongst various performance management methodologies (e.g., CRM, Six Sigma quality) and actions. His recommended solution is an “integrated technology platform” with software automation. That is, he viewed that moving from spreadsheets and PowerPoint to commercial BSC software solutions was essential to institutionalize and sustain an organization’s BSC.

The keynote speaker Howard Dresner, a popular IT analyst and business advisor, described the need to create a “performance-driven culture.” He pointed out that at this point in time BSC is well over 15 years old, and its underlying methodologies are proven. (Many of the conference’s case study presentations served as evidence of BSC’s success.) The barrier holding back progress with the vast majority of organizations is cultural including resistance to change and the absence of a “visionary leader.” Howard has developed a survey diagnostic that organizations can assess their culture’s readiness for applying BSC.

Professor Kaplan’s keynote presentation was titled, “Leveraging data and Results to Drive Operations.” A highlight of his message was his describing how business intelligence (BI) and analytics (e.g., micro-segmentation, regression analysis for correlation, predictive analytics) are growing as key contributors to completing the last stages of the Kaplan and Norton Execution Premium Process (EPP) described in their most recent book. Those latter stages address optimizing decisions with analytics.

To summarize, these are the three shifts in BSC messaging I observed:
- Institutionalize BSC with software automation
- Create a culture for alignment of strategy to operations with metrics
- Apply business analytics to optimize

I suggest you revisit some of my prior blogs (and stay tuned for my future ones) to read how I agree with these emerging messages.

There seems to be a growing interest in applying analytics to sports. One example is the popularity of the 2003 book Moneyball that describes the depth of analytics that general managers like Billy Beane of the Oakland Athletics apply to selecting the best players, plus batter and pitcher tactics based on the conditions of the team scores, inning, number of outs, and runners on base. I expand on this trend in an article titled Baseball + Analytics = Improved Performance. Why might this interest be?

Perhaps it is because people are so stressed with their hectic workday and family responsibilities that taking interest in sports events is a great release of tension. (Of course there are the gamblers, but they are a subset.) Can we detect from this trend of sports analytics the application of analytics in business?

One of my co-workers at SAS, Retha Keyser, recently shared with me an astute observation on how managers mature in applying progressive managerial methods. She noted that roughly 50 years ago, CEOs hired accountants to do the financial analysis of a company, because this was too complex for them to fully grasp. Today, all CEOs and mainstream businesspeople know what price-earnings (PE) ratios and cash flow statements are and that they are essential to interpreting a business’ financial health. They would not survive or get the job without this knowledge.

Retha then recognized that 20 years ago, CEOs of companies did not have computers on their desks. They did not have the time or skill to operate these complex machines and applications, so they had their secretaries and other staff do this for them. Today you will become obsolete if you don’t at least personally possess multiple electronic devices such as laptops, mobile phones, BlackBerrys and PDAs to have the information you need at your fingertips.

There are hundreds of examples of applying analytics to sports. One I recall is the IT analyst Steve Miller’s solution to debunking a conjecture of his son’s friends that a certain university had low academic standards and thus fielded better athletes. Steve's article Yuletide Lite Plus a Few Graphs describes his solution.

You cannot manage what you cannot measure. Raw data leads to information. Information can then be analyzed for decision making. Competency with analytics will surely provide a competitive edge for organizations that these skills with workers at all levels.

Text analytics may be the next wave of computer analysis. In contrast to quantitative analytics, text analytics broadens mining raw source data beyond numbers to include words, phrases and sentences – alpha characters.

The potential of text analytics’ applications and benefits are endless. They range from marketers more quickly, potentially in near real-time, detecting consumer trends to applications improving fraud detection. However, like any new digital frontier there are both promises and perils.

A New York Times article, When 2+2 Equals a Privacy Question, revealed some of the potential risks to personal privacy. The article presents an example where Netflix, the movie DVD rental company, provided a data set to researchers containing 480,000 of their customers’ movie preferences. The initial purpose was to seek improvements to its recommendation software. The customers’ identification had been removed from the data. However, researchers from the University of Texas were able to re-identify individual customer names by correlating the presumably anonymous data with digital trails left on blogs, Twitter, Facebook, chat rooms, and cinema websites like Imdb.com. (A Netflix spokesperson disputed the findings by claiming the data sets had been altered, but that is a different discussion for another time.)

When an example like this is applied to electronic medical or criminal records, the implications become more serious. Individuals may not want that kind of information revealed to motivated third parties like potential employers that can possibly cause social, professional and financial damage to an individual. (As full disclosure, my employer SAS offers text analytics solutions, and I impressed with the awareness and concerns that my co-workers have about this topic.)

Re-identification of presumably de-identified data shifts the discussion of text analytics into the realm of privacy and ethics. It is my hope that society comes to grips with ways to manage these risks. Analytics can be so much fun. Examples abound, not only with marketers anticipating trends and improving targeted messages and offers to customers and prospects; but also, for example, with sports enthusiasts who seek to resolve debates about “best” athletes or teams.

I confess. Despite my perception of myself as a tough guy – co-captain of my university football team – my eyes misted at the end of the 1998 Tom Hanks and Meg Ryan movie, You’ve Got Mail. In the film, Hanks’ new big box Barnes and Noble-like book store in NYC’s Manhattan had put Meg Ryan’s small West Side children’s book store out of business.

During the movie, Hanks anonymously exchanges AOL e-mails with Ryan as a new friend and gradually an admirer. Despite her resentment of the known Hanks for his callous business style, she came to like him for his helpful advice during constant coincidental meetings in neighborhood stores, paralleling similar advice of the anonymous e-mailer – also from the same Hanks. At the movie’s conclusion when the two anonymous e-mailers agree to meet in Central Park, to Ryan’s surprise Hanks appears as the anonymous e-mailer at the agreed location. At first she is confused why he’s there too. Then she realizes Hanks is both the adversary she had come to admire and the anonymous e-mailer. They’d already fallen in love. Hanks approaches Ryan and says, “Don’t cry, Shopgirl (her AOL ID). Don’t cry.” Ryan replies, “I wanted it to be you. I wanted it to be you so badly.” They embrace. End of movie.

What does this have to do with Performance Management? You might be surprised by the number and frequency of unsolicited e-mails I receive with questions of all sorts from individuals ranging from university students to internal project champions to executives. I feel like I have pen-pals you established relationships with as a kid during Summer camp.

A common theme of questions inquire about how to get buy-in and support to pursue a Performance Management methodology quest, like to construct strategy maps, balanced scorecards, customer profitability and value management analysis, or driver-based budgeting and rolling financial forecasts. These solutions are not compulsory or the law, like Sarbannes-Oxley, but are optional. So persuasion is needed.

Like Hanks and Ryan in the movie, I am clueless who these people writing me are, except perhaps for a few clues. My answer, however, never wavers. To overcome the natural and expected resistance to change of co-workers, having the vision of a solution and practical steps (e.g., a pilot project) to implement it is not enough. One must raise a level of discomfort and dissatisfaction with the status quo to motivate people. That is, one must stimulate sufficient anxiety with continuing operations as-is and perpetuating making decisions on inadequate or flawed data, to overcome defiance and opposition by managers and employees to try something new – and needed for improvement.

It is not easy to be self-critical of your own organization. Further, it is a challenge to identify a coalition of co-workers who feel as compelled as you that adopting Performance Management methodologies is needed. But it must be done. You will need to decide if you are just a follower or a leader. “Don’t cry.” Pursue what you know is needed to make a difference.