Business Analytics: My Valentine’s Day True Love Confession

February 14, 2011
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It is Valentine’s Day today. I normally post my blog each Tuesday, but today is an exception. It is April 14. This is a painful blog for me to write because I have a true love confession to make – I have two loves. It involves my relationship with analytics-based enterprise performance management.

My Romance Dilemma
So what is my love problem?

It is Valentine’s Day today. I normally post my blog each Tuesday, but today is an exception. It is April 14. This is a painful blog for me to write because I have a true love confession to make – I have two loves. It involves my relationship with analytics-based enterprise performance management.

My Romance Dilemma
So what is my love problem?

Until about three years ago, my main interest was explaining the “how-to” of all the methodologies comprising business analytics and the enterprise performance management (PM) framework and mechanism. Examples of these methodologies are forecasting, strategy maps, scorecards, dashboards, correlation analysis, activity-based costing, driver-based budgeting, customer demand management, and so on. I have implemented these techniques. I’m a practitioner. I love explaining to people how things work and inspiring a vision on how those same things can work much better in the future.

What happened to me three years ago? I was smitten. A competing suitor of my “how-to” love appeared. It is my new “why-to” love – explaining the benefits of why to implement and integrate analytics-based performance management methodologies. They both compete for my attention. This is what occurred.

As I concluded my seminars or discussions with customers of my employer, SAS, about analytics-based enterprise performance management, I began asking this question: “Since these managerial methodologies are so logical, proven and beneficial, why is their adoption rate by organizations so gradual and slow?” Eureka! A flood of replies gushed from people, describing many diverse barriers and obstacles. I found myself personally and increasingly attracted to these “why-not and why-to” discussions in contrast to my “how-to” lectures. They filled an emerging void for me – explaining my frustration with why more organizations were not advancing to a higher level of maturity with managerial methods.

Seduced by Emotions and Passion
My love for explaining the “how-to” of performance management has not waned. In fact, I love explaining the “how-to” more than ever. There is great satisfaction when you can enlighten managers and employee teams, for example, on how to apply analytics techniques, build a strategy map, identify key performance indicators (KPIs), design a right-sized activity-based cost assignment network, or shift from traditional cost center incremented expense budgets to a future demand volume-sensitive driver-based budget and rolling financial forecasts.

Teaching “how-to” is a pleasure for me. I was trained as an industrial engineer. Engineers like to know how things work. What I have learned is that passion along with curiosity drives discovery. Passion is the mysterious force behind nearly every step-change in a process or introduction of a new idea such as customer profitability reporting and analysis. When I witness an effectively working component of a performance management system, it takes my breath away. Discussions about “why-not and why-to” are now capturing my heart.

With hindsight, we now realize that past barriers that have impeded adoption are easily removable. That is, technical barriers such as disparate data sources or “dirty” data now have software solutions like ETL. Model design deficiency barriers, such as how to properly construct a strategy map and select its appropriate KPIs, are broken down with experienced consultants and better training courses.

What type of barrier continues to primarily obstruct the adoption rate of PM methodologies? That barrier category is social, behavioral and cultural. There are many examples of this type obstacle, including people’s natural resistance to change; not wanting to be measured or held accountable; fear of knowing the truth (or of someone else knowing it); reluctance to share data or information; and “we don’t do that here.”

A Blissful Romance with Performance Management
When you mention these social, behavioral and cultural examples to project teams or internal champions tasked to explore, evaluate, implement or operate PM solutions, their heads all nod with a “Yes! Spot on!”

As I am being courted by this “why-to” love, I have realized a truth. Almost none of us have training or experience as organizational change management specialists. We are not sociologists. We are not psychologists. However, we are learning to become like them. (Read my blog “Why do you have to be a sociologist to implement performance management”.) Our adoration for the “why-to” and its motivating effects on organizations is driving us as an obsession.

My relationship with performance management methodologies and their embedded analytics continues to grow. My heart pounds faster when I hear or read about it. I once thought that just explaining how business analytics, activity-based costing, or a balanced scorecard work would be sufficiently compelling for organizations to act. Educating was gratifying for me. But now I also find satisfaction in explaining the importance of overcoming social, behavioral and cultural barriers for organizations to take next steps. My dilemma of two loves is a nice problem to have. I love what I do.