Closing the Intelligence Gap - Gary Cokins on Performance Management

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.