A Poorly Managed Company’s Tour Guide: Performance Mangement and the ‘Mesdup’ Corporation

May 18, 2010
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Publicly traded companies issue annual reports that increasingly look like magazines. Almost all organizations publish a brochure with glossy pictures that describe what their organizations do. In either case they are very traditional, and many look the same. What is needed is a new idea – a better way to communicate their branding and positioning message in a similar way that international countries’ government tourist agencies promote their nations to attract tourists.

In the article below I have written my first draft article of a “tour guide” for a poorly performing company that I will name as the Mesdup Corporation. (Get it? Like as messed up.) It may be a company you know. Mesdup is clueless as to what key performance indicators (KPI) to monitor as feedback for how it is performing. Their accountants are in the Dark Ages when it comes to accurately reporting and analyzing product, service-line, channel, and customer costs and profit margins. Their broadly-averaged cost allocations calculate flawed and misleading information. Mesdup has no idea how to transform their mountains of raw, transactional data into meaningful information for interpretation and analysis.

 

Publicly traded companies issue annual reports that increasingly look like magazines. Almost all organizations publish a brochure with glossy pictures that describe what their organizations do. In either case they are very traditional, and many look the same. What is needed is a new idea – a better way to communicate their branding and positioning message in a similar way that international countries’ government tourist agencies promote their nations to attract tourists.

In the article below I have written my first draft article of a “tour guide” for a poorly performing company that I will name as the Mesdup Corporation. (Get it? Like as messed up.) It may be a company you know. Mesdup is clueless as to what key performance indicators (KPI) to monitor as feedback for how it is performing. Their accountants are in the Dark Ages when it comes to accurately reporting and analyzing product, service-line, channel, and customer costs and profit margins. Their broadly-averaged cost allocations calculate flawed and misleading information. Mesdup has no idea how to transform their mountains of raw, transactional data into meaningful information for interpretation and analysis. And much of this input data is full of errors and located in many disparate data sources. Mesdup’s demand forecasts are totally unreliable and projected as if they are random. But, the good news for Mesdup is they have a good public relations and advertising firm that can make any bad organization look good. It is impressive what cosmetics can accomplish.

Here are some discussion notes to refer to develop the first draft of the “Tour Guide for Mesdup Corporation”:

 MESDUP CORPORATIOIN TRAVEL GUIDE

Welcome to Mesdup Corporation. Here is a tour about who we are and our culture.

Corporate Symbol

Canada’s national symbol is the maple leaf, a symbol of nature and growth. Mesdup’s symbol is the Rubik’s Cube, a symbol of complexity that few can solve its problems.

Corporate Anthem

The USA’s national anthem begins with “Oh say can you see.” Mesdup’s anthem is the Rolling Stones’ song “I Can’t Get No Satisfaction.” Medsdup’s executives and managers never meet their target performance numbers, especially its sales force. For last year’s anniversary party of Mesdup’s founding, the public relations firm proposed flying Mick Jagger to headquarters to sing his song. Unfortunately there were budget constraints, so a local wedding band from the next town over was contracted. They were not so bad except for their name and associated outfits – The Plaidettes.

Corporate Motto

Mesdup’s original motto originally was, “Happy Employees. Happy Customers.” But a few years ago there was a formal shift in Mesdup’s core values. The current motto is “Just enough is too much.” It reminds employees to skimp on the cheap, especially if it involves customers. No more customer dinners at Ruth Chris Steakhouse. The current policy is Meat n’ Griddle fast buffet – it suffices to get food in a customer’s belly.

Corporate Emblem

The USA’s national emblem is the Bald Eagle that represents freedom based on its ability to fly from a lofted perch of a tall tree. Mesdup’s corporate animal is the Praying Mantis. It has great camouflage to appear invisible and can lazily wait for a meal to pass by. For Mesdup, the praying mantis is its brand name because Mesdup cannot be detected in the marketplace. Typically when employees tell anyone they work for Mesdup, people next say, “I never heard of them. What do they do?” Many employees fumble and mumble answering that question. Improving communications with employees is a future goal of Medsup’s personnel department.

 Corporate History

Just like any nation’s immigration policy where new citizens must study for and pass an exam, new hires for Mesdup must know Mesdup’s history:

1973: Mesdup Corporation’s founder invents the company’s original product. Remembering what that product was does not in appear in the exam as a question, only the date it was invented. Rote memorization is highly valued in Mesdup, especially knowing the first names of the Mesdup’s executives’ children and spouses to earn brownie points. Having a good memory is also valuable with customers to call them by their correct name.

1981:
Mesdup lands its first million dollar customer.

1982:
Mesdup loses its first million dollar customer to a competitor. This wake-up call provided an important lesson to Mesdup – deliver what you promise. Mesdup employees continue to try to learn this lesson.

1994:
This marked the beginning of “Mesdup’s CFO Wars.” Mesdup hired its first CFO with a CPA.  Upon his arrival he immediately implemented Mesdups’ first annual financial budget to control spending for every department. The line managers created a wall of resistance to a budget as being an infringement to their decision rights that had been successfully decentralized. Picketing by managers occurred, but fortunately the hallway scuffles did not lead to any serious injuries.

2004:
This marked the end of the ten year CFO wars with the line managers. The Mesdup CFO Peace Treaty was signed. The compromise negotiated is the CFO’s rolling financial forecast would be tolerated only if it includes three components: (1) capital, strategic, and risk mitigation projects aligned with Mesdup’s mission statement; (2) volume sensitive driver derived resource capacity and operating spending expenses for each department’s cost center; and (3) it is not a fixed contract 12 month budget but is a continuously rolling financial forecast with adjustments.

2005: The announcement of Mesdup’s Vision and Mission Statement. It quickly became apparent that the new financial rolling forecast had no mission or strategy to align the managers and employee teams actions with. The new Statement was carefully crafted. It states that “Mesdup will be the best company with the highest quality and service at the lowest cost.” This was mounted on the wall of Mesdup’s lobby entrance and every employee was given a laminated card for their wallet or purse. Shallow and hollow mission statements like these are great because they do not divulge the company’s strategy. Unfortunately, the Statement was obviously too vague.

2008: Mesdup’s founder and CEO read a book titled “Performance Management.” It was revelation. He embraced the idea that Performance Management is the integration of multiple methodologies with each one embedded with business analytics of all flavors, such as segmentation analysis, and especially predictive analytics with all of them synchronized to achieve the strategy and to make better decisions.

2009: Mesdup achieved the highest sales and profits in its history.

2010: Mesdup is evaluating changing its name to Fixdup.

Corporate Logo

Mesdup’s corporate logo was a brick. It represented something solid. After 2009’s success everyone realized that a brick isn’t going anywhere. The new corporate logo is the cockpit of a jet. It demonstrates all the controlling and steering with feedback, alerts, and autopilot mechanisms to guide Mesdup into the future. 

This was just the first draft of the “Tour Guide.” In re-reading it, I can see that some parts can be deleted, other parts edited, and new parts will be added to celebrate the success rather than the rough patches of the past. With its new name of Fixdup, its symbol, anthem, motto, and emblem will be changed to reflect the high performing organization that it has become. 
  

Gary Cokins