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Enterprise Performance Management
November 2011
 
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Have you sometimes been told that you need to be more productive? You need to work harder? You need to be more efficient?

Most people, when they hear these words, think that they need to speed up their work. "The management thinks we are too slow."

Efficiency and productivity are in most cases not linked to the speed of work. In fact, efficiency and productivity comes from the following:

  • Making sure what you contribute towards fulfilling your company's strategy. (Justified by strategy - adding value)
  • What you do - do it right. (Right quality)
  • What you do - do it the right way. (Right process)
  • Prioritizing initiatives and choosing which ones to do first, second, and which ones to never do. (Project management)
  • Making sure what you do can be justified economically. (Financial management)
  • Making sure that you have the needed skills to perform the job. (HR management)
  • Making sure that what you do is within the acceptable levels of risk. (Risk management)

None of the seven check points on the list above ask you to "run faster". Hence, the key to productivity and efficiency is actually in making better decisions on key issues like quality, process, projects, financials, HR and risk.

In a world where the speed of business is increasing, it is important to not just speed up the "hamster wheel", but to speed up the thinking process and ask these fundamental questions. And if you are honest you will experience increasing efficiency and productivity in you and in your company.

 

Author : Tor Inge Vasshus
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Balanced Scorecard Forum
December 3 - 7, 2011
Saudi Arabia

   
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Enterprise Performance Management
October 2011
 
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I have now worked 16 years with software systems for Strategy Management/ Performance Management. In my earlier days I worked as a practitioner, but in the last 11 years my role has been that of a CEO of a software company developing Strategy Management solution.

Over these last years I have received hundreds of "Request for Proposal" from various customers. Many of the RFP documents have good questions, but very few of them really focus on a problem that I am seeing in common among most businesses today - Deviations or abnormality in structures.

If you are asked about your business, you will most probably say it is very structured. All data, goals etc. can be rolled up and down perfectly would be your answer. But if you look more closely you will find instances where there are deviations. Apparently this is what is causing problems for many businesses while using Strategy/performance management software packages today.

Let me give you some examples:

"This indicator is going to be used for all departments – except one department"

"All limits indicating red, yellow and green should follow this rule – except for this department"

"All numbers should be aggregated up to total group – except for this unit"

"All indicators should have initiatives attached to them – except for these KPI’s"

"All Initiatives should have this specific info attached – except these kind of initiatives"

"All indicators should have a monthly follow up frequency – except this which is a half year"

This list goes on and on!

Here is what causes challenges/ problems in the software implementation process. When these abnormalities come up, the normal reaction of the software vendor is "our system is not made for that exception – but we can fix it". It is as though the software vendor is very surprised every time these issues come up and from that point onwards the cost starts to spike. Every exception is dealt with but at a high cost element.

So the next time you are looking for a Strategy management software/ performance management software – ask the vendor for how exceptions are dealt with. If they don’t have a good answer – then go on to the next vendor.

Author : Tor Inge Vasshus
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CPA Congress
Strength through experience

October 17 - November 4, 2011
Melbourne
November 14 - 17
Perth

Palladium 2011 Americas Summit
November 9 - 10, 2011
San Diego, USA

   
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September 2011
 
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Many companies are using their performance management system to control and punish people/ divisions which do not meet their set targets.

Seldom do I hear about celebrating good results. Sales people are probably the ones who get to celebrate for they are likely to have a "gong gong" arrangement to announce when they have won a new contract. But why are we not implementing a more positive approach of defining "celebration rules" as a part of the company's performance management system? You should go ahead and define which events or what results entitle to an official celebration.

I know for sure how much recognition means to me and others and celebration is a way to award recognition. Let your performance management system contain the celebration rules.

One example of how such a rule could be set up is like this:
If target is achieved –› send an email to the local baker and order a cake for delivery –› send out invitations to people responsible for the achievement of the target

We need to start focusing more on partying, celebrating & recognizing, because I think this is what drives performance. Recognizing facilitates a positive performance culture.

Good luck – and remember too much cake is not healthy!

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Balanced Scorecard: Measuring, Managing and Improving what Matters
October 11, 2011
London

CPA Congress
Strength Through Experience

October 17 – November 4, 2011
Melbourne, Australia

   
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August 2011
 
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Many times in the past years, I have been asked the question - "What is the derivable value from successfully executing strategy?" We know there is potentially a huge value from successfully implementing strategy, but only recently I came across research data that quantifies this value.

According to a research published in The Harvard Business Review, "Companies realize only 40 to 60 percent of their strategies' potential value".

I think Jeroen De Flander puts it very nicely when he describes the "lost value".

Knowing that your organization loses between 40 and 60 percent of its strategic potential on the execution highway between the city "strategy" and the city "performance", is an interesting fact but doesn't really help solve your problem.

That is why I am happy to see that universities around the world have started focusing on the Strategy Execution process.

Good luck realising your company's full potential.

Author : Tor Inge Vasshus

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Mastering Strategy Execution
September 19-20, 2011
Boston, MA

Improving Business Analysis and Bottom-line Performance
September 11-13, 2011
Dallas,Texas

   
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July 2011
 
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I have seen how many companies start with ‘data’ as their Holy Grail. “What is the data we have that can give us information?” This is an important question but not the most important question you can raise.

Others start with the question “What are the critical success factors that we need to manage?” This is yet another important question but still not the most important question you can raise.

You should start at the top and ask “What is our strategy?”, “Where are we moving as a company?”, and “What are our strategic objectives?”

Before you have fully arrived at answers to these questions, you should raise other questions regarding data or KPIs or initiatives.

To underline how important this is, I would like to say this: If I had choose between a Scorecard with only strategic objectives (no KPIs) and a Scorecard with only KPIs (no objectives), then I would choose the one with objectives.

This is because objectives are what tells you the direction. They tell you what is important and I think that many scorecard projects underestimate the value of good objectives.

Once you have established Objectives, you can build it out with Initiatives and at eventually go on to define the KPIs.

So the best way to begin is to start elaborating on your company’s strategic objectives. Don’t stop before you have clearly decided on some good objectives that reflect what your company wants to achieve.

So my view on this is that Strategic objectives are the vital part – the Kings and the Queens of a Scorecard project, while KPIs are mere subordinates to these Objectives.

Author : Tor Inge Vasshus

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The Business Process and Performance Management Seminar
August 03, 2011
Makati, Philippines

Strategy Execution Summit 2011
August 17 - 19, 2011
São Paulo, Brazil

Balanced Scorecards Colombia
22 - 23 Agosto, 2011, Hotel Casa Dann Carlton,
Bogotá, Colombia

   
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April 2011
 
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  I have visited several companies in the past and many of them have asked me about how to make their performance management system one that reflects strategy. They all wanted to go from a KPI / operational focus, to a more strategic focus and asked for help. My advice was to not even think about what they had in their current Performance Management system. Even if they had good data that was hard to collect, they must just leave it all for a while when structuring a Strategic Balanced Scorecard. This process of “emptying your brain of your beloved KPI’s” is hard for many. Here are my steps on how to connect strategy to your performance management system:

  1. You need to have a strategy to implement – show me your strategy
  2. You need to translate your strategy / structure it
     a. Establish your strategic objectives
     b. Establish your strategy map
     c.Connect your initiatives
  3. At the end you see if any of the KPI’s you had in your performance management system can function as an expression of strategic
      objective achievement or not

Your Strategic objectives decides/ tells you which KPI’s you should use, for the KPI’s should indicate if you can achieve your objectives or not. That is the purpose of the KPI’s in a Strategy focused Performance Management system (Balanced Scorecard).

Some of the KPI’s that you have left out after this process probably represents interesting aspects of performance, but they are not strategically relevant. They might still be important. You can use these KPI’s as additional performance information – but not on the front page of your most important objectives and strategic KPI’s.

So you might find yourself with a lot of extra KPI’s that you haven’t been able to put into this structure. What should you do with the left over KPI’s? Probably send them “down the elevator”. To the KPI grave yard. It’s a quiet, empty place. smiley
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Performance Management Conference
Building a culture of continuous improvement

30 June, 2011,
Location - London

Balanced Scorecard bootcamp
July 11 - 15, 2011
Pretoria, GP ZA

   
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April 2011
 
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  I don't know if you have tried to run on a treadmill. It can be quite scary. There are Youtube video's that demonstrate how not to do it. But that is not my point. Let's say you are asked to run a half marathon on the treadmill. 21 kilometers is a long distance you might say, and it is for me too. I am an old runner, and the way I managed to psyche myself to run those 21 kilometers was not by focusing on the remaining distance. I celebrated each kilometer that I passed. Once I got to the 16th kilometer I started hearing people cheering me and this encouragement in the form of applause carried me through the last 5 kilometers to the finishing point.

The same applies to businesses. Big Hairy Audacious Goals (BHAG) are not achievable without splitting them up into minor goals and setting milestones along the journey. Believe me, you need a lot of milestones in your journey. These milestones will help your organization to verify if you are actually moving towards the target. Milestones are also important to keep up your faith and motivate yourself to continue. Here comes the best advice of all – party and celebrate each milestone achievement! This will help you to not only keep the faith up, but also heighten the sprit within your organization. Come on, let's party more!!!

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Structuring Management to drive efficiency
June 7-11, 2011
Location - London
The Balanced Scorecard: Achieving Performance Excellence
July 24 - 28, 2011
Location - Singapore

   
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April 2011
 
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  Research indicates that 60% of corporations don’t link resource allocation (budgets) to their Strategic Plan. I am wondering how companies manage to execute strategy when strategic planning and resource allocation processes are not linked. To me it looks like the company is on "auto pilot" and does not respond to new strategic directions very well.

I have been following the work by Kaplan and Norton lately where they talk about a specific resource allocation category – namely Stratex – Strategy Expenditures.  Strategy Expenditures are resources allocated to “move your company towards your strategic goals”. This is an investment program that you do in order to successfully implement your strategy. By naming Stratex you know that these are funds that are not connected to your day to day business, but it is specifically connected to fulfilling your strategy.

I challenge companies that I meet to do one exercise – connect their projects to strategic objectives. In doing this they can see how their projects fits with the strategy.

If you work in the finance department with budgets and money – come down from your money mountain and start engaging in Strategy Execution.

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Mastering the New Rules in Business Innovation
May 20, 2011
Location - New Zealand

Structuring Management to drive efficiency
June 7-11, 2011
Location - London

   
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February 2011
 
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  I attended last year’s Global Leadership Summit. It was a great conference which gave me a lot of insights into management which can be practiced in my own company.

Bill Hybel lead a session called “From here to there". This session was actually what strategy is all about - taking a company from its current destination to a new destination over a given period of time. Bill said that the most critical part of that journey was not at the start - what he called "here" (starting point) nor was it the “there" point (strategic destination) but it was the journey between "here" and "there". That specific period is the most vulnerable and critical part of the journey. He gave this great piece of advice for practice during this vital part of the journey.

"Every person's vision bucket leaks!" He underlined that it was important for the management to anticipate how the vision bucket can leak. Managers need to fill the vision bucket during this journey. Not once, but over and over again! This has to be done in order to keep up the faith and reach the strategic destination successfully.

I am happy if the people in my organization tell me, "our vision level is at a low level, please call for strategy meetings and refill our buckets". If you don't have these kind of sensors in your organization to warn you when to fill the vision bucket, then you better call for a new strategy meeting and paint the organization's vision as a clear picture for everyone's benefit.

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Balanced Scorecard Forum
March 26 - 31, 2011
Location - Dubai, UAE

The Eleventh Annual Government Performance Summit
April 4 - 6, 2011
Location - Washington, DC
   
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January 2011
 
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  On my way to India I watched a movie called "The social network". It was a movie on how Facebook was invented. I was inspired by one of the founders - Mark Zuckerburg and his dedication to develop the technical and content side of Facebook.

The film also showed how Sean Parker, the founder of Napster joined in. Although the film gave us a very bad impression of him, I see him as one of the main guys behind Facebook’s success as a commercial company. He was able to attract investors to invest in Facebook, employ people and "make things happen".

These kinds of people who are able to execute a company’s strategy with such high energy are so valuable for a company’s success.

I don’t think it was Facebook’s strategy that made them a successful company, but the ability to execute their strategy. This is also supported by research which indicates that it is not the strategy itself that is the most important factor (although it is important), but how you manage to execute that strategy. This cannot be copied - it has to be performed by highly energetic and inspired people. So don’t keep your strategies a secret but find the right people who can help you execute it.

As a last note to this cartoon blog I would like to say that I was inspired by Sean Parker’s character and would like to have more of these go-getters in my organization. So if there are any energetic strategy executers out there looking for a job - Corporater might be the place for you.

Author : Tor Inge Vasshus

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Kaplan-Norton Balanced Scorecard Certification Boot Camp
January 23-27 , 2011
Location - The Address Dubai Mall, Dubai

Balanced Scorecard Boot Camp
January 24, 2011
Location - Orlando, FL

Performance improvement through innovation and strategy management
February 07, 2011
Location - Milano, Italy
   
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