I have just been reading Robert Peston’s book Who Runs Britain? I recognised many parallels with Who Runs Business? With the Internet expanding the voice of shareholders across blogs, news sites and forums, is logical decision making being crowded out by shareholder pandering to silence the hounds.

Just how much time is spent in business fluffing a shield around reality to reduce it to a something more readily digestible to the shareholder. Have we gone too far in giving the shareholder more power than the CEO and his/her executive team?

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Traditional command and control leadership models are outdated, and are evolving towards a more collaborative and process-oriented culture. The same culture that is underpinning the evolution of the Cloud. BI tools provide the market transparency to identify ‘triggers’ and evidence-based decision making support needed to ensure more appropriate and timely decision making, and the Cloud is providing the rapid adaptability needed to deploy new tools needed for the rapid deployment of new strategies.

Businesses are continuously being forced to revisit three critical strategic questions:

1. What business are we really in?
2. What triggering signals should we be measuring?
3. Do we have the business tools to plan investments and operational activities with the lowest possible risk and enable us to react quickly to the triggering signals?

And yet transformational system must also incorporate the vital elements of control – visibility, compliance and governance.

As businesses realize that importance of the information value chain to their needed agility, capturing the collective wisdom of their organizations and markets is a core business capability. Yet for many, their enterprise systems are not capable of supporting business intelligence systems.

The value of BI relies on intelligence being captured and automatically applied at key decision points. Operational BI is the key driver to optimizing business processes that enable the best possible response to customer needs, often before a customer is even aware of that need. In turn, that drives the productivity of the business.

Operational decisions today must be based on real-time insight, often the result of analysis of a complex set of events, any one of which is capable of altering an existing decision making model. Thus, decisions have become fluid, and are only ‘true’ for moments in time.

Before the latest advanced business intelligence tools, business leaders were reliant on information systems built on transactional data models. In many cases, due to the lesser speed and complexity of business, this provided adequate decision support. Not so today.

 Business today must have the ability to rapidly change processes and react to events without delay and with minimal resources. With the web driving vast change in the blink of an eye, change, adaptability and visibility are now key drivers to business success.

The typical suite of business applications – ERP (Enterprise Resource Planning), SCM (Supply Chain Management), CRM (Customer Relationship Management), HRM (Human Resources Management), PLM (Product Lifecycle Management), MRO (Maintenance,

Repair and Operations), MES (Manufacturing Execution Systems), have proven solid infrastructures to run global organizations, but are inadequate in design and processing capability to perform the real time analytics needed to support these business drivers. Nor, are the infrastructures that support them capable of supporting the needs of BI tools.

Thus, just as business drivers have changed, so too must IT drivers to support the business. One of the major constraints of implementing and deploying BI databases,  applications and tools has been the lack of capability to readily extract data from numerous disparate data sources, aggregate it and format it to support real time analytics.

Cloud computing changes that!. Whilst cloud doesn’t deal with the data issues, the virtualization inherent in cloud architectures makes a significant contribution. Accessing transactional records are a simple query, requiring little in the way of processing power. However, the large complex queries common to analytics requires bursts of processing power necessitating instant scalability.

New sets of metrics [Key Performance Indicators] must extend beyond the enterprise walls to capture social and market drivers not previously in existence, adding further complexity to the data streams that must support business decisions.

As business leaders make new kinds of strategic and operational decisions, CIO’s in turn are faced with the new challenges to change and adapt corporate technology at the same pace.

The disconnect between the agility needed by the business and the agility inherent in enterprise platforms has been a major constraint in business success and growth. Cloud computing provides that agility faster and easier than ever envisaged even a few years ago. This has elevated IT out of the basement and into the boardroom as a competitive differentiator that will determine which companies are the winners emerging from the current recession. The economic climate, coupled with this new technology capability offers a seldom seen environment for previously struggling companies to take leadership roles in their industries, leap-frogging over less agile incumbents.

One trailing constraint continues to cause me some concern, executives who still struggle with new technology, many using more than the basic functions of desktop applications. Coupled with the poor representation of CIO’s in board membership, and the problem is obvious. How can business leaders give directions to their CIO’s when they no longer fully comprehend the environment in which they are operating and the resources that will keep them competitive. We have moved beyond the era where cost reductions will significantly impact business competitiveness. Today it is about building deeper customer relationships to drive more revenue at higher profit margins. An entirely possible goal to meet – with the right technology. Without it, it just won’t happen, or at least it won’t happen fast enough to make a difference. CEO’s and COO’s are tasked with embarking on their own journey of discovery to move beyond the parameters of resource allocations, and into one that is driven by process and predictive insight. The Cloud will help to remove the complexity of technology and enable business leaders to think more in terms of strategic output than servers and desktop systems.

As the business and IT move closer together we can expect to see new terms such as process oriented clouds, intelligent clouds, functional clouds etc beginning to emerge as bundling of computing capability, application suites and data needs are created. This will emulate the industry vertical bundling of software packages to provide complete plug and play solutions, but in the cloud it will be play and pay.

I for one, who has worked alone in the trench between IT and the business for many years am looking forward to the new B-IT collaborative model – where sales, distribution, innovation, financial, logistics, talent and manufacturing processes will be based on infrastructure which exists in a virtual context. Where applications and data will connect to others through heterogeneous structured and non-structured environments.

Cloud provides an ideal point of connection between both individuals and processes that require rapid online connections to other processes without invasive techniques. It is a place where business people can iteratively describe what issues they are tackling and speak a common language with their IT counterparts in a setting which can deliver the constant innovation, without having to wait for complex and slow development techniques.

The above is an excerpt from my upcoming book “Getting to Cloud – The Essential Guide to Decisions About Cloud Computing” – by Gail La Grouw

A KPI is a key measure that is linked directly to a strategic outcome. With a fast moving market, strategies can change significantly more often than just ten years ago. This means that KPI must also change and be monitored using a transparent performance management system. The key in selecting and filtering KPI are the decisions that the organization makes, and which of those decisions are most critical at any one time.

There are effectively three kinds of decisions made in any organization:

1. Strategic decisions – these are the small group of ‘big’ decisions, made by the small executive group, that involve big investments, with significant outcomes. For instance, developing a new product line to attract a new market or acquiring a competitor.
2. Tactical decisions – those decisions made by a larger, but still contained group of managers that determine exactly how the strategic decision will be put into play, in terms of approach and offering. For instance, a product manager making decisions around a pricing schedule and launch bonuses relating to the new product line.
3. Operational decisions – the business decisions made by many people, on a daily basis, that have a smaller business impact when measured independently, but when aggregated with multiple operational decisions add up to a lot of value. For instance, a sales person may offer an additional discount to add leverage to a significant account to sign up to the new product.

Using the above example, the new product group, the executives will be making strategic decisions around meeting EBIT targets, the product manager will have KPI focused around profitability and portfolio contribution to EBIT, and the sales person will be tracking to sales targets related to account revenue and profit. If this discount was offered to his entire account portfolio, the impact on profitability and EBIT contribution could be significant, and could drive decreased performance to KPI up through operational and strategic levels. And this is where the critical missing component comes in.

KPI’s must have business rules attached. Business rules help to define how performance to a KPI must be implemented, and will in this case restrict the offering of additional discounts to drive revenue at the expense of profit. Implementing KPI without business rules definition is a common occurrence in businesses, and accounts for many instances of targets not being met. This is the reason that The Logical Organization focuses very much on decision making when defining its business intelligence strategy.

We start making judgement decisions from the day we are born, taking in all the environmental, comfort and influence factors around us. We get comfortable with this style of decision making, and oftentimes overlook just what and who is influencing our decision making.
Every person has their own filters, biases and personal agendas – it’s human nature and for most, a subconscious participation in decision making. With less time for making decisions today, and even less time to make and correct mistakes, leaders need to use more reliable frameworks fo making complex decisions. Regardless of the tools one uses, not all decisions will have perfect outcomes. But leaders can certainly tip the odds to their favor using tools such as Business Intelligence Analytics.

Since leaders are judged largely by the quality of the decisions they make, it makes sense to use all the data and tools available today to drive that quality higher. Decision quality is measured by speed, considerations of all drivers and stakeholders, and the impact of the outcome on the strategic goals of the business. And, just as important today, decisions need to be transparent for the protection of both the business and the leader.

If you are still making decisions based on judgement, you are tempting fate in ways that have repercussions on not only the business, but also yourself and your family. The best decision any leader can make right now is to protect all stakeholders by implementing a sound analytical application from which reliable, relevant and real time information can be accessed and applied to problem solving and opportunity conversion. Logic driven decisions support evidence based management. Not only will your decisions be smarter – they will be auditable.

Check out the article and comments and let me know your views – I like to know what you think?  The Rise of the Chief Performance Officer

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1. Ignore It,
2. Accept Defeat, or
3. Take Control

And the way to take control is to put the customer back into the center of your business

“Act on every lead, Win every deal, Keep every customer.”

It is easy for businesses to seek complex solutions to simple problems, and whilst the magnitude of the problem today is significant, the best response is quite simple. If your business does not have the tools to tell you how well you are performing in each of these three key areas, how do you expect to perform better than your competitors. BI is about collecting data on a continuous basis so you can convert it hour by hour into usable, actionable information. If you can not see the change in state of your business in real time, you are going to find it very difficult to make the best of the current market environment. I have a favorite saying….If its not in sight, it’s not insight!

Even large, cumbersome businesses are experiencing remarkable improvements from using BI solutions:

Sales Pipleline – 172% increase

Sales Growth – 70% increase

Team Productivity – 20% increase

It’s no longer a matter of not being able to afford CRM/BI tools – it’s a matter of not being able to afford to NOT have them.

So don’t let the current gloom beat your business – get data, get insight, get ahead….Take control!

Watch out for my next blog which will include a short audio on exactly how BI provides competitive advantage in EVERY part of your business.

Studies have shown that managers’ behavior dramatically affects an employees’ work. And with the Peters Principle alive, well and kicking it doesn’t take a genius to work out that perhaps delinking an individual’s personal performance from their managers perception and personality might just have a positive impact. In some interesting research by Teresa Amabile and Steven Kramer’s carried out over three years daily entries by knowledge workers over revealed how dramatic this impact can be.

People need continuous, honest feedback of their work and the opportunity to improve based on their own efforts. The single most powerful motivator for employees is their ability to make progress in their work. Often this progress is shrouded in a raft of small calamities that naturally occur throughout a workday, or the mood of a work colleague or boss. Having a personal dashboard gives an employee the truth without the attitude. It helps individuals see past the gloom and recognise small incremental gains in their performance. If the dashboard is correctly designed to link performance to corporate strategic goals, it also helps them understand how their work contributes the overall success of the business. This in itself is a powerful motivator.

The motivational strategy of many managers is somewhat misguided, especially when praise is given without real progress. Equally, good progress without recognition is more demotivating; especially for Gen Yrs who thrive on instant feedback.

As an admission, I am not an HR expert, or even a manager of a large team, but I have been a performance coach and consultant for nearly 30 years and have worked with a lot of different businesses, managers and teams. I am however an expert in the power of business intelligence – and it’s not just for measuring operational and marketing performance. Personal dashboards should be on the desktop of every employee. They provide the transparency of real performance, without the filtration by management. They relieve managers from micro-managing their teams and empower individuals to make small incremental improvements in their daily tasks.

The power of personal dashboards is not just with the task workers. Managers also benefit greatly from them. Most managers are generally overworked and overstressed and it is almost impossible to isolate these feelings from your staff. Using technology to help manage team performance makes a lot of sense, and releases managers to evolve to a more coaching and leadership role.

With a positive attitude to make a difference to the world, they don’t expect to wait until they scale the corporate ladder. They want it now – and they want the tools to do it. These are the change leaders that BI program managers should seek out.

Dubbed by Fortune Magazine as “potentially most high-performing generation in history”, this generation is used to having on-demand information to support their need for instant gratification and greater technological skill. With higher expectations of themselves, personal performance dashboards give them the instant feedback they thirst and with little previous commercial experience to resource, they are not blinded by false assumptions and filtered recall of ‘what happened last time we tried that’.

Gen-Yers are not afraid of failure – they are more afraid of not having the opportunity to try. As open communicators, Gen-Yer’s expect the same from their leaders. They are comms savvy and have a higher internal sense of when they are being are not being told the truth or information is being held back. Many more traditional managers are somewhat intimidated by this generation, but smart managers will not hold Gen-Yer’s back – rather they will provide them the the tools and opportunities they need, and support their stretch into innovation, without fear of failure.

Gen-Yer’s remind us that there are many forms of leadership – and not all of them belong or reside in the executive boardroom.