Thursday, March 17, 2011

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New posts on Customer Performance Metrics, Managing Performance for Social Media, Target Setting Best Practices and more...

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Monday, February 21, 2011

Building Sustainability Into Your EPM Program

Click here to view our latest article on making your Performance Management Program Sustainable, plus several new articles published daily:

Wednesday, February 09, 2011

10 Fresh New Posts on Performance Management

10 New Posts on Performance Management available now at

Friday, January 21, 2011

PM Perspectives just got better...

Just a quick note to let our readers know that we have recently moved our blog to . This site offers us more flexibility in making timely posts, and also makes it easier for you to subscribe to our weekly updates. We have also added a link to relevant twitter posts that we think you'll find valuable. Hope to see ya'll on WordPress. Enjoy!!!


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

Tuesday, January 18, 2011

Once again, AAPL shows us how its done...

I'll keep this post short, as I know most of you are probably tired of hearing more news about Apple and the speculation surrounding its future leadership issues (i.e. the future of Mr. Jobs).

As both a small personal shareholder and a recent Apple convert (full disclosure), I took a few minutes today to listen in on the AAPL's quarterly earnings call. While some of it was sheer curiosity about the leadership issues and speculation, I was more curious as to how they would narrate their performance over the past quarter, and their ability to stick to the results message amidst the obvious distractions.

My opinion- home run! Sure, its easy to succeed on a call like that when some of your products and markets are growing at 50-100% year on year. But this call had a lot of potential to get derailed, not only by the leadership risks and concerns, but also by an analyst community who is so good at casting doubt and throwing darts wherever they can. Even the friendliest of wall street analysts can put a damper on good news.

Sometimes, we get so caught up in the management of the day to day business that we fail to see the importance of the stakeholder communications aspect of our activities and role. Yet it is THAT phase of performance management where the value of our efforts actually gets produced, and failing to tell the "performance story" can be just as damaging as failing to achieve the results. Today, that story was told to perfection.

Don't neglect the stakeholder communication aspect of your EPM processes, as it is probably the most valuable of all activities and has the potential to make or break your efforts!

The link to the audio of the call is no longer available (the archive should be up within a week or so). I'll try and post it when it goes back up.


Saturday, January 15, 2011

Is Your Scorecard Getting Stale?

Around this time of year, it is not uncommon to see clients challenging and refining the metrics that they will use to evaluate performance as the year progresses. Actually, it is quite a timely and productive exercise to go through, as many of us have just come out of our year-end planning cycles where a number of our goals and objectives may have been modified from previous planning cycles. And while one might argue that metrics should be an outgrowth of the planning cycle itself, we all know how often those processes get short circuited. So doing a quick inventory of our business metrics is always a healthy practice to get into.

In talking with one of my clients last week, we got into a fairly lengthy discussion about the value of having measures that don't change very often. In his view, certain measures at his company were in fact "getting stale" and were hard to do anything meaningful with from a motivational or incentive standpoint because they really lacked any interesting "movement" from a reporting standpoint. Was he doing harm by keeping them on his scorecard? Was it time to bring some more "interesting" or "challenging" metrics to the table?

Anytime I get a question like this, I try and go back to asking how well their metrics line up with "where value is created" within their business...a sometimes obvious and trite, but often very valuable question. Going through a challenge like this can reveal a lot about where changes might be necessary. A few things to consider along these lines:

- Most of the time, the measure itself is not what has gotten "stale", but rather the target against which you judge success. I had a client recently tell me that his target for a particular metric was to "improve" or "get better" year on year. Quite frankly, I believe this is a clear recipe for lackluster improvement. Most sports teams that have achieved greatness (consistently) usually started with some pretty bold and specific turnaround or improvement aspirations. Resetting the bar with a healthy dose of ambition can really bring life back into what might appear to be a stale set of business metrics.

- Sometimes, its not the measure or the target that is the problem, but rather how the measure is positioned. Simple metrics such as safety incidents, outage statistics, etc... can look stale especially since success is evaluated based on the "absence" of something happening. Simply changing the way the metric is positioned, however, can have a huge impact on visibility and motivational value. Repositioning these metrics into things like "days since last incident", "near misses", "time between failures" can turn a sleepy metric into something that grabs more attention.

- Some measures, however are meant to fade into the background over time. From time to time, we add metrics to the scorecard because of a problem that needs fixing. A good example of this is in corporate services functions where things like "help desk response times", "recruiting cycle times", etc. have become the centerpieces of their metric reporting. In fact, most of these areas have gone so "cycle time happy" that, while I'm not sure anything is getting done, I am certain its getting done FAST! Sure, these metrics were born because at some point in the past, I'm sure cycle times in the associated areas were really, really bad!!! But at some point, you need to acknowledge when a gap has been closed and put a metric into what I'll call "maintenance mode". It might not have to "go away" altogether, but perhaps it should fade into the background a bit so that a new source of value can gain visibility and be exploited. A good example of this is how many call centers have decreased the importance of things like speed of answer and abandon rates, and have put more emphasis on the role reps can play in shifting customer behaviors and service channels utilized.

- and yes, there are times, where the metrics we use are simply crappy metrics, and while they may have made sense at the beginning, they either no longer motivate the right behaviors, or worse, incentivize the wrong ones. Don't be afraid to trash some metrics periodically so that you don't end up creating layers of dead weight in your scorecard and Performance Management activities.

So if you are one of those managers in the throws of self reflection, happy hunting. Just make sure you go through the process a little more deliberately and methodically so that you don't end up throwing the proverbial "baby out with the bathwater" (which incidentally is a metaphor that I hope is not based any real history!!!).



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

Thursday, December 30, 2010

2010 EPM Year in Review

2010 - EPM (Enterprise Performance Management) Year in Review

As is my tradition in the final days of the year, and in anticipation of the one to come, I provide below some of the more significant trends we've observed through our Performance Management related work with clients and colleagues in 2010, and some thoughts on what we see as the major forces, issues and trends that are likely to shape the year ahead.

Certainly no one will argue that the most dominant force, regardless of industry, continues to be the economy. No single factor has impacted the C-Suite and Performance Management Executives more than the economy in terms of its stifling impact on corporate growth and the state of paralysis it has created in our ability to plan for and manage the inevitable yet unpredictable growth that lies ahead.

By definition, EPM (Enterprise Performance Management), or CPM (Corporate Performance Management) as it is sometimes referred, is all about linking strategy and KPI’s, to the management and improvement initiatives that occur in the daily operation of the business. We accomplish this through effective measurement of performance, analysis of identified gaps, deployment of course corrections, and changes to business processes and operating protocols. This activity is challenging even in times of stable growth and "normal" operating conditions. But in times of unpredictability and chaos, which is what most of us find ourselves in today, it most certainly adds a level of complexity (and stress) that would challenge the best of us.

The wise among us would say that these are the exact times to refocus ourselves on the things we CAN control versus those we can’t, and perhaps, more importantly, to understand the difference between the two. Recognizing and acknowledging that difference requires understanding the business well enough to make such a call.

However, as Performance Managers, what we often find is that if we understand the business and its drivers well enough, we can actually identify ways of controlling what appears initially to be uncontrollable. Such is the case with good Performance Management Systems. They help us understand the business at the level of depth and granularity necessary in proactively managing change amidst the levels of risk and uncertainty we all find ourselves in today.

In my view, it was that transition in practice and philosophy that characterized the EPM discipline in 2010. Most of the improvements I've witnessed over the past twelve months were about how to make EPM within our organizations more flexible, dynamic, and better able to improve the manageable and change the changeable, while often managing and influencing what appeared to be unpredictable. To this end, we've seen changes in everything from the scope and focus of our EPM organizations to the manner in which we track, measure, and manage our performance. We've seen changes in how we define value, and when and how we declare victory. We've also become more keenly aware of the weaknesses and shortfalls of our EPM programs--from our ability to capture and track the right data, to the systems we use to report and analyze “mission-critical” information.

As in past years, there was no shortage of success stories. And, of course, none of us experienced these successes without our fair share of failures and setbacks.

Below are what I believe to be the most significant factors characterizing EPM successes and failures in 2010. These are:

  • Clarity around the role of EPM as a discipline within the business
  • Better “line of sight” linkage between strategy, KPI’s and business improvements
  • More focus on “value capture” and bottom line results
  • A shift toward (more holistic) “profitability management”
  • Consolidation (for the better) among technology vendors
  • Standardization in the data environment (within companies/ across industry)
  • Investments in EPM skill building and cultural transformation

Some of the above are strategic in nature, while others are more tactical and operationally focused. But I believe they all have relevance on how EPM will move forward into 2011 and beyond. I offer these, and the expanded discussion of each below, for your reflection, and as a beacon for how we can all navigate the challenges that lie ahead in the coming years.

More clarity around the discipline of EPM/CPM

In 2010, many of us were able to build more clarity around the role, charter, and delivery systems for EPM within our organizations. While this might not have been as "clean" a process, or ended up as structured as we might have liked, most of our organizations now see our role as more established, and with a clearer sense of purpose than they were in years prior.

In previous years, the relationship between Corporate IT and groups responsible for Enterprise Performance Management has always contained some friction, mostly around the management of the data required for effective performance reporting (i.e. data warehouses, and the more recent Business Intelligence (BI) solutions). Many companies have also struggled with the interface between EPM and other corporate governance/ support functions (Corporate Performance, Operations Analysis, Strategic Planning, and even areas like Auditing, Risk Management and Capital Planning) where roles and boundaries are sometimes hazy at best. In the past, these conflicts in role clarity often forced EP Managers to either relegate their role to basic metric tracking, or risk continuing amidst the confusing roles and frequent “turf battles” that had come to define our relationship with these stakeholders in past years.

Howard Dresner (the individual who first coined the term Business Intelligence (BI)) actually defines EPM as "BI with a Purpose." For me, that is a good summary of what began to take place in 2010 within many of our EPM organizations. In 2010, EPM began to find its identity amidst what was clearly a state of role confusion. Rather than battling over whether the company needed a Performance Management solution or a BI solution, one simply became a way of leveraging the other (i.e., while both disciplines utilize operational data, EPM is a discipline and set of processes for driving the effective management of performance, while good BI enables a data environment that makes all that possible). The same case can be made for each of the other disciplines mentioned above. They all use performance data to differing degrees and for different purposes. 2010 identified and clarified many of these distinctions, bringing a great deal of that into focus. And for EPM managers, that was a welcome change, providing a clear mission and charter for it to rally around.

2011 will hopefully build upon that clarity. But EPM managers need to continue their vigilance, adding new dimensions of value to what they’ve created for the business, while carefully nurturing their stakeholder relationships so that the role clarity achieved thus far evolves into lasting internal partnerships. The more EPM can deliver a clear and distinct "value add" from its efforts, and make clear the impact it has on P&L, the more visible and vital (and less redundant) the company's investment in EPM will be perceived.

Better "line of sight" linkages (between strategy, KPIs, and business improvement initiatives)

2010 saw a marked improvement in the ability of EP Managers to show visible "line of sight" linkages between the activity of metric tracking and their impact on operational business improvement initiatives. For many, this journey has been painful, and some have found the boundaries previously referenced even harder to discern, as their EPM groups were sometimes forced (out of necessity) into directly driving the very operational changes that, in the end, are actually operational accountabilities!

But on balance, 2010 saw mostly positive developments in how companies manage the “downward” linkages between KPI’s, business metrics, and the operational improvements underway in their organizations. That often required a clear process for identifying gaps in key measurements, and quickly deploying business improvements (using a variety of improvement methods (e.g., LEAN, TQM, Kaizen, Six Sigma). EPM groups that have been able to demonstrate these kinds of linkages, and show examples of how they can work, have achieved something big, and should be proud of it. Soon, they will be able to step back into more facilitative roles, allowing the operating groups to take back the baton and continue propagating these changes within their respective Business Units.

The same however, cannot be said for the "upward" linkage between KPIs and Corporate Strategy. More often than not, the very successes we have had operationally have only highlighted areas where business strategies themselves have either not been defined or lack sufficient clarity. Over 70 percent of the organizations with whom we have worked in 2010 have expressed major concerns in this arena.

Just as EPM groups have successfully facilitated a "line of sight" linkage between measurement and operating improvements, many will need to apply the same facilitative role to marrying their company's strategy with the underlying measures and KPIs of the business. In some cases, where Company and Business Unit strategies do, in fact, exist, this will simply mean identifying the key gaps and weaknesses so that business strategy is clear, compelling and integrated into the KPI’s that are routinely tracked. In other cases, it will mean introducing some basic strategic thinking and frameworks (e.g., Porter models, options theory, etc.) to executive teams (particularly those who spend most of their time in the operational space) in order to kick-start or revisit the strategic planning process, and actually develop what may be the Company’s “first REAL strategy. And for some, it may only mean serving as a catalyst to force a better integration between existing strategy and the company's KPI framework. But in all cases, this is likely to be a major challenge, as it will require a much stronger partnership between EPM and the highest level executives and strategic planning support groups (Planning, Finance, Risk Management, etc.) within the organization. Building that “upward linkage” linkage will be essential to completing the type of full "line of sight" visibility required of a successful and sustainable EPM environment.

More focus on "value capture" and "bottom line results"

Starting in 2009, and into 2010, we saw a much more deliberate focus on what some would call "finishing the race". All too often, we have seen measures tracked and reported for the purpose of compliance or satisfying the optics of performance measurement. But for "best practice" EPM organizations, success is not only defined by the presence of a scorecard or dashboard, but also by being able to generate hard and sustainable results in terms of savings, service level improvements, or other (more substantive) sources of business value. We've seen numerous companies who have made the progression from not tracking downstream value at all, to being able to assign clear, single-point accountability for the full lifecycle of a particular KPI or critical business metric. This means not only owning the measure and the reporting of it, but also the accountability for meeting targets, closing critical gaps and being responsible for delivering downstream improvements and incremental value to the bottom line. Often, this requires a robust framework for identifying and managing these accountabilities, and an overall philosophy of "commitment management" that is embraced culturally by the company. There are many tools that have emerged in this arena, from the creation of "value registers" to formal "commitment tracking" protocols for executive and operating management.

2011 will hopefully see a continuation of this trend, bringing true clarity to how EPM organizations should be measuring themselves as service providers. Back to the first observation, there is no better answer to clarifying the identity and value delivered by an EPM function than being able to generate and consistently deliver on a robust pipeline of value improvements to the business.

Shift toward (more holistic) “profitability management”

While the focus on "value capture" has had significant impact on the identity of EPM and to the bottom line directly, many EPM executives have realized that success needs to go beyond conventional sources of value. For most, that definition of value over the past few years has translated directly to cost savings and productivity gains—essentially addressing the question "what and how much have you saved for me lately?" But if nothing else, the economic recoveries that followed past downturns have showed us the flaws and negative consequences associated with this kind of singular focus on cost savings. (a.k.a.—the "death by a thousand cuts" solution) Plain and simple, it works for a while, but quickly becomes a debilitating force when the business inevitably returns to periods of rapid and dynamic growth.

Striking an appropriate balance between conventional cost savings, and other (perhaps less obvious) sources of business value will become a critical success factor for companies in the years ahead. Some companies have begun this transition by actually changing how value is actually defined within the business. For these organizations, value is seen through the much wider lens of what actually drives profitability, and from what sources. Conventional thinking asks where we can add value by cutting the direct cost of goods sold, driving increases in operational outputs and labor productivity. More innovative and holistic thinking, on the other hand, delves well beyond direct operating costs and begins to tap into the savings embedded in corporate overheads (IT, HR, Supply chain, etc.), value that is locked up in our supplier and business partner relationships, and even value that may reside in customer behavior and day-to-day interaction with the company (i.e., those areas that were historically regarded as uncontrollable or may have been considered “off limits”).

We believe this expanded focus on profitability (versus simple operating costs and productivity) will have significant impact on what we measure in 2011, as well as how we define and claim value on the back end of our process. EPM can and should play a major role in LEADING this transformation, using its data and measurement frameworks to reveal new profitability drivers to the organization, and, in turn, growing the active pipeline of value improvements ( a new corporate asset) for the business.

Technology focus/ vendor consolidation

A few years ago, the landscape of supporting technologies was characterized by a plethora of vendors, each touting its own unique (and often proprietary) version of a performance management “system”. In fact, the domains within which they all operated were blurry even for those companies and the external (independent) research organizations who tracked their capabilities on a regular basis. Were these BI vendors? Dashboard providers? Visualization tools? Reporting engines? All of the above? There was a time in the not-too-distant past when the number of quasi-credible players for a company looking for performance management software would have stretched well into the hundreds.

Today, the landscape looks very different. Not only are the “credible” PM technologies fewer in number, the clarity of the domains within which they play has increased significantly for all involved (Who are the real EPM vendors versus those who are simply pieces of the puzzle?) In early 2010, Gartner published its Magic Quadrant analysis which did a good job at illustrating the consolidation that began a few years ago when each of the major IT solution providers acquired various BI and other performance management/ reporting related niche players in what turned out to be the start of a major industry consolidation.

With the exception of the very small one-off solution providers, the credible list of EPM technologies (which I define as robust (features and capabilities), easily integrated (open versus closed systems), and scalable) can now be counted on one hand. That’s good news for those who have waited until 2011 to pull the trigger on their EPM technology purchase/ upgrade, as the job of vendor selection has gotten much easier, and the cost of deployment much smaller.

In 2011, we expect a significant increase in the set of capabilities and innovations each of these players bring to the table, with the biggest of these being integration (within and between other applications such as risk management, asset management, capital planning, portfolio management, and HR), automation (less manual data manipulation and conditioning, better leveraging of BI tools), and the portability/ flexibility of reporting mediums (e.g. mobile versus desktop reporting).

Standardization of the data environment itself

Key to some of the above changes will be improvements in how data at all levels are collected, synthesized, and reported. Some would say this all started years ago with increases in regulatory oversight and the application of clear reporting standards (everything from basic GAAP to SOx in the financial realm, to industry-specific reporting such as FERC and NERC in the Utilities sector), many of which have made reporting transparency a way of life. But for others closer to the world of financial reporting, those forces will likely pale in comparison to what is coming in the era of International Financial Reporting Standards (IFRS), where moving to a global standard for transparency and reporting will prove far more complex and daunting.

2011 should see the acceleration of these factors on the EPM radar screen. Changes will no doubt emerge in terms of how data must be collected and reported, so “tuning into” these changes now will allow you to get ahead of the curve and be in a position to influence this transition within your organization (rather than reacting from the sidelines on what emerges from within IT and Accounting, two of the most impacted functions within your organization). As with most such changes, the implementation is never straightforward, so staying ahead of the curve may even create opportunities to drive positive change in the overall data environment within which you operate and rely on. Use it to your advantage.

EPM skill building/ cultural improvements

As performance managers, we always talk about the importance of skill building and driving culture change. But with the exception of those companies who are heavy invested in one of today's major quality/ business improvement platforms (Lean, Six Sigma, et al), investment in a true performance driven culture has fallen woefully short of what is necessary in a successful EPM environment. In fact, many companies who have made significant investments in the above referenced platforms have actually lost ground in recent years as these initiatives became viewed as “passing fads” that merely generated lots of “lip service”. The bottom line is that there exists a broad spectrum of experiences in this space, from those who have invested heavily to those who have invested little to nothing.

What continued to concern us in 2010 was the number of organizations who had invested heavily in the EPM discipline (by building a support structure, acquiring dashboard technology, etc.), yet appeared to be moving backwards, largely because they had not made the corresponding investment in EPM awareness and leadership skills that are required at even the most basic stakeholder levels. Many of these organizations had limited their investments to tactical skill building like diagnostic and analysis techniques (typical of operational driven cultures) rather than the broader suite of skills demonstrated by leading EPM organizations.

Performance Management is a major investment in business infrastructure and governance, and to implement it without an aggressive, yet targeted approach to EPM skills at all levels of management (Performance Leadership, Reporting, Analysis, Commitment Management, Managing Change, --to name a few) will guarantee some major failures along the way.

The good news is that this is an area many have determined to be a priority, and many of those who have underinvested in the past intend on making up significant ground in the coming years. But by the same token, most companies have not adequately defined where these investments should be made and what specific skills should be focused on, and hence lack a credible “learning” program that can really accelerate its EPM success. The starting point for all of this is doing a solid inventory of EPM learning within your organization (defining the required skills and competencies, and understanding where you stand on each), and then building a comprehensive plan to introduce and reinforce these new behaviors into your business. As organizations, we know how to bring new skills into the business, having introduced effective learning programs in everything from technical skills to safety, diversity, and basic operating management skills and behaviors. Integrating EPM skills into these programs, consciously and deliberately, should be a major focus of EPM in the coming year.


So with that, we will put another volume of "EPM-year in review" on the shelf, hoping that it will be useful to you as you refine your strategies, plans, and tactics for the new year.

With any luck, 2011 will mark the long anticipated turnaround in the global economy, as well as the deployment of new EPM practices, tools and approaches that will help us navigate the new growth and ambition that will come with it. But let's not lose sight of what enabled us to navigate through the challenges of 2010 amidst the unprecedented levels of uncertainty that surrounded all of us. Risk and unpredictability will always be present, whether visible to us, or merely lurking in the background. Being able to manage within that environment will continue to differentiate the best among us in the years ahead.

My sincerest best wishes for all of you over the Holiday season, and for a happy, prosperous and successful 2011!


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