Data rich, information poor? There’s no doubt you’ve heard these four words before. Most performance managers work their you-know-what off to overcome this problem. Yet it still remains one of the most systemic problems in business- managers who are overwhelmed with data on everything from their staffing levels and productivity, to the price of rice in Southeast Asia.

Good performance managers are obsessed with fixing this problem. They try everything from reconfiguring management reports to the sexiest of graphical interfaces. They work to improve data quality, reliability, and validity. They work to deliver the most polished of presentations. But all to often, they fail to ask the most important question of all- SO WHAT?

I once worked for an executive who ran a brewery in South Africa. In one of our conversations, he relayed that every morning when he walked into the production facility, he would ask a series of questions, all targeted at providing 5 critical answers- answers that would populate his “mental dashboard” of performance, providing the indicators he needed to manage that day’s business. The questions ranged from the previous day’s production volume to that day’s temperature and weather forecast. To this day, I’m not even sure what the latter indicator was all about (probably because I’m not a beer executive). Maybe it related to how happy his employees were likely to be if they though they could play golf that weekend- who knows.

The point is that HE knew. These indicators were his most vital source of information, and for that day, his most prized possession. He made decisions based on that information. What’s really important here is that he kept it simple. Five indicators, not fifty. Indicators that could be easily captured, not ones that needed a complicated ERP extract to produce. Ones that could be easily understood and acted upon. Instead of calling them his KPI’s (an overused term that has come to refer to the most complicated of management reports), he referred to them as his DIPI’s (Damn Important Performance Indicators).

Some might see his approach and commentary as over simplified, and maybe even a little trite. But the point is he USED the information he acquired. How many managers in your organization really use the information they get from you? Ask yourself what can you do to create your little set of DIPI’s. Then start putting that data to work!

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If you read my column recently, you’ll notice that I appear to be stuck on a certain metaphor. Read what you want into it, and you’ll probably be right. While I find these images familiar and identify all too well with them, I do find solace in knowing that I’m not alone. But the reason I mention them here is not because I’m some type of masochist, but because they strike big chord for me in improving the performance management process. Stay with me, and I think you’ll see the connection.

Ok- here’s the scene- you’ve all probably seen the commercial. The guy gets on the scale, weighs himself, then runs around the gym for about 10 seconds, and weighs himself again. The commercial ends with the overweight gentleman expressing complete and utter frustration that he had not lost any weight. After all, he’s exercised for a whole 10 seconds! I’m not sure why we find these types of commercials amusing, but it’s probably because if you’ve ever battled to lose weight, you’ve probably done the same thing.

How does this apply to the workplace you ask? Take a look around you. Where have you seen that compulsive cycle of wasteful effort? (Hint: it’s not in your boss or your co-worker’s weight loss program). How about on your balanced scorecard? Or in your management incentive plan? Measures like ROE, or Share Price, or CapEx? OSHA or related macro-level Safety indicators?
While we should all be measuring these things, we must be smart in how we apply them internally.
And that’s the message for today. Look hard at what you’re reporting, to whom you are reporting it, why you are reporting it, who you’re holding accountable for changing it, and how often you could reasonably expect a significant or meaningful change in the indicator.

All to often, we report indicators to people that either have little control over them, or whose ability it affect performance has a “change cycle” well beyond your reporting period. Most people in the organization cannot change share price, ROE, or their safety record overnight, or even monthly. What they can do is manage the drivers of these indicators. Drivers that do in fact change daily, weekly, or monthly.

So before you publish another weekly or monthly performance report, ask yourself if you’re really reporting things your employees can manage on that frequency, or if you’re trying to manage a long term indicator that the organization has little immediate control over. The answer may surprise you.

-b

About the Author: Bob Champagne is Chairman and CEO of ePerformance Group International LLC, a privately held company specializing in performance management systems and solutions. Included in ePGI’s product portfolio are a wide variety of performance tracking, reporting, and benchmarking solutions delivered in an online and on-demand environment. ePGI’s services are utilized by over 50 leading edge companies across numerous industries and geographies, and are licensed by many high profile consultants committed to delivering world class PM solutions to their clients. Visit ePGI at http://www.epgintl.com or contact us directly at 973-343-2806.

I recently read an article in which the author began with saying he was “dubious about the accuracy of his bathroom scale”. He discussed the many creative ways he manipulated the reading, from adjusting that little ‘magic knob’ on the bottom of the scale, to leaning a particular way to increase the likelihood of a more favorable reading. The author was using this metaphor to drive home the importance of self honesty and commitment to a vision, rather than constantly changing the game fit our needs and wants of the moment.

While this was written in a philosophical (life principles) context, I couldn’t help thinking about it in the realm of managing performance in the workplace. How many times do our management reports behave like that “bathroom scale”? How often do we send out data and numbers, fully aware that human nature will be to play with that ‘little knob’ on the scale, or tilt their ‘management bodies’ to get the readings they want?

As difficult as it may be, it’s up to us as good performance managers to lay out and reinforce a consistent and honest performance vision for the organization. We need to lay out the data in a thoughtful and meaningful way, not simply report numbers and factoids. We need work with our management to understand the data in a holistic manner, embrace the conclusions honestly, and set a firm vision for short and long run organizational improvement. Then, it’s our job to report that data in a meaningful and insightful way that encourages an honest and consistent interpretation of that data vis a vis the organization’s vision.

And therein lies the rub. Many performance management organizations today are still in the mode of reporting data, rather than information. And its not all their fault. The practice of interpreting data to fit our (management’s) individual agendas has been around since the beginning of time. Like I said earlier, it’s human nature.

Your mission as performance managers should be to change that culture. Starting with the top brass, and working through the organization. Most of you are in a unique position of managing the information flow, and as a result, have quite a bit of influence over how data is presented, interpreted, and acted on.

The answer is not to replace that old scale, but to get management to embrace a more honest and consistent interpretation of what the data is telling them. Good performance managers will use their power productively and responsibly to create that “unwavering commitment of performance excellence”.

During the course of managing projects, consultants are often faced with the age old problem of “data denial”. You know the feeling- when you have to look in the mirror and face the fact that its your data, your conclusions, and your recommendations that could affect the lives of many. While some would say it’s a feeling of power or influence, most would argue it’s nothing more than a big headache and major source of stress.

That notwithstanding, let’s look at the source of “data denial”. Data denial stems from those people within organizations that have a lot to lose from accepting the conclusions of your “data story”. Think about it like this- if you knew the conclusion of a book before you started reading, and didn’t like it, would you even begin reading? Such is the case with data. A conclusion that is disliked will breed data denial every time, regardless of how good or bad the data story hangs together. Its a fact of life , that there will always be a large percentage of your clients who will not like what the data has to say. Accept that. Their reaction is something that you have no control over.

What you can do, however, is make damn sure the data, and the data story hang together. If it does, the naysayers will soon meet their ultimate destiny all by themselves. The will assert your conclusions are wrong based on a single piece of data, but soon find out that it’s not one piece of data, but rather a a body of evidence pointing in one direction, that’s driving your conclusion- a direction that likely runs counter to them. And then, with far less fanfare than they arrived with- poof- they’re gone!

So how do you create that defendable “data story”. First, make sure that you’ve scrubbed the information before building it into your conclusions. That should be obvious, but remember, we’re not talking only about spreadsheet errors and omissions here. We’re also talking about the reliability and validity of the data. How was it captured? Was it captured the same way from each respondent? Are the data capture systems reliable? Are clear standards in place to ensure an apple is always an apple?

Secondly, make sure your conclusions aren’t based on a single dimension of performance. For example, a conclusion about high cost will almost always be met with the “oh but we ‘re high cost because we are the high quality producer!”. Maybe true, maybe not. Your conclusion will be a lot more defendable if the service quality dimension of performance is built into the equation, rather than being absent or tangential to the argument. A data story like “your cost is x..and your service level is y. And while it appears you pay for having that high service level, companies a and b generate the same service level at 70% of your cost”. That’ll take quite a bit of wind out of your adversary’s sails, and with any luck, get his energy refocused on problem solving rather than data denial.

Finally, avoid being absolute with your data components. Nothing is perfect. No room for black or white answers. There are times where statistical accuracy and hairline confidence intervals are important (like sending the space shuttle into orbit!), but most of the time, directional accuracy is more than enough. Spend your time finding 10 metrics that point directionally to your conclusion, rather than finding one lone measure that is squeaky clean statistically. I’m not diminishing the importance of statistical accuracy, but what I am saying is that there is a time and place for it. Very often, you can prove your conclusion much faster and feel very confident in your recommendation without the comfort of statistical precision. I’ll take directional accuracy over “analysis paralysis” every time. Oh yeah, and did I mention that for every statistically precise datapoint, there is a statistically perfect rebuttal. Here, the old adage, “you can make statistics say anything” rings oh so true. Pick your battles wisely, and spend your time on obtaining a larger volume of directionally accurate supporting metrics rather than shooting for data perfection.

There are many more ways to “tighten up” your conclusions and avoid falling victim to the data naysayers. The above are just some of the more important ones- the ones that can’t be ignored.

Remember though that “data denial” comes with the territory if you’re in the business of performance management. It can’t be avoided. And even if it could be, most of us would find that to be a very boring place to work. Instead, embrace the challenge knowing that you are armed and well prepared for whatever they throw at you. If you’ve done your best at this, trust the right answer will emerge based on the data you’ve prepared. The naysayers will usually take care of themselves.

In a world driven by efficiency and productivity, many companies are turning toward outsourcing functions that are best delivered externally. That could be because the outsource provider delivers the service more efficiently or effectively. Or it could simply mean that the nature of the service being outsourced has an element to it that makes it non conducive to delivering internally.

Such is the case with many of the functions within the performance management discipline. For a variety of reasons, it makes little economic or practical sense to manage functions like benchmarking, best practice sharing, and other inter-company networking internally. For one, the mere efficiency gained by sharing administration costs of these functions across multiple organizations beats the alternative of “reinventing the wheel” hands down. If you’re not already outsourcing these functions, its something to take a serious look at. In addition to saving considerable amounts of expenditure, companies that have gone down this road have found the cost savings to pale in comparison to the additional value gained.

So let’s assume you decide to outsource some of these key performance management functions. What should you look for in a partner or contractor? There are literally hundreds of consulting firms (large and small) delivering these services, as there are online exchanges, associations, academic institutions, and one-off consortiums. Knowing how to define what you’re looking for, and how to gauge the partner’s capabilities can make the difference between the success or failure of your performance management initiative.

Here are some key attributes to look for when choosing a performance management contractor or service provider:

1. Objectivity and independence:
This is perhaps one of the most overlooked attributes in selecting a PM partner. Consultants, suppliers, and trade associations have for years offered benchmarking and other performance management products for their clients and members. The problem is that most of these organizations have other forces motivating them to deliver such services (e- using metrics that will expose an opportunity to sell a particular product or consulting gig). You’re better off using a service from an organization that specializes in performance management, rather than one that provides it as part of a broader solutions portfolio.

2. Data Integrity:
This one is a real no-brainer. So why is it so many organizations accept such a low standard of data integrity from their service providers? That’s the vexing question. When you look for a benchmarking vendor or performance diagnostic consultant, try and determine how much emphasis they place on data reliability and validity. Look hard at their data validation process, peel back the layers, and then ask yourself if you would trust the data to make critical “life or death” business decisions. My guess is that only a fraction of the data you get today would pass that kind of scrutiny.

3. Content Expertise
Does you vendor bring top industry expertise to the table? Are the people they staff your project with respected players in the areas they support? Could they sniff out performance issues and trends that might lie buried beneath the surface? Or is 70% of your project team staffed with glorified MBA’s with little or no real market experience? Nuff said on that.

4. Market Access
Some of the best insights will come from a very small slice of the market… thought leaders within leading edge companies who have a passion for innovation. The problem is that these companies are not always the big names, and not always easy to find. They are also often unwilling to share information, unless they feel there is an adequate quid pro quo. A vendor that has good market access will not only be able to identify these types of companies for you, but also bring the kinds of relationships that will get you in the door. And sometimes that’s 3/4 of the battle.

5. Action orientation
Nothing is more frustrating than a consultant who has the analytic brains of Einstein, but has never implemented anything in his life. This attribute goes hand in hand with the expertise of the vendor, but also deals with the “propensity for action” that the service provider brings with them. What you want is someone whose bias is for action is high (learn, pilot test, implement- sometimes “going ugly early”), not someone who will get you into a neverending cycle of “analysis paralysis”.

There you have it. 5 key attributes you should look for when bringing on a partner to help with your performance management efforts. A few questions around each of these factors can reveal some key strengths of the vendor, and identify critical weaknesses.

A little time up front can save you a bundle in the long run.