Last updated 1/10/2005 (added more customer examples)

This write-up began in fall of 2005 and we've been revising it continually ever since. Thanks to everyone who sent in their feedback on this so far, what began as a random blog posting has worked itself into somewhat of a working paper. Please keep your feedback coming: iantien at microsoft.com

Finally, we can all be corporate strategists (DRAFT)

Microsoft Office Business Scorecard Manager aligns day-to-day reality with corporate objectives

Ian Tien, Peter Bull, Corey Hulen

Hands up if you’ve ever read your corporate mission statement and entertained the sardonic thought “great vision, but what has it got to do with my everyday job?” For virtually everyone from “C” level downwards, the daily grind can seem far removed from lofty ideals about leadership, customer satisfaction and empowerment. Of course, we all need those ideals, but to be meaningful, they have to connect with our experiences, and we want to feel that if we stretch ourselves, we can not only make a difference to corporate success, we can literally see it. And if we are honest, that generally does not happen.

If strategy is to become everyone’s job, everyone must have the tools that empower them to think and act strategically, embedded in the desktop environment that they use on a day-to-day basis, and supported by the IT team who are the guardians of corporate data. Early reports from customers in a broad range of industry sectors who are testing and indeed using Microsoft Office Business Scorecard Manager indicate that this is what they most value in the product.

For example, Ron Van Zanten, Business Intelligence Officer with PREMIER Bankcard told us, “This solution minimizes the chances of errors because it presents all users with one version of the truth. And what’s even more important is that, with a single version of the truth, you’ve got everyone in the organization working towards a common goal.” Likewise Dave Evans, a senior strategic planner at Development Bank of South Africa said, “We see our automated scorecarding solution as being a critical communication tool for our strategy. Everyone gets a consistent view of the organization. And just as importantly, this consistent view will tie scorecarding results to relevant documents such as policy papers or PowerPoint presentations from a conference.”

Most vendors claim to offer ease-of-use, but it’s a pretty relative term. Ease of use is one thing to a specialist data analyst sitting in an office, but what quite another if you are working out in the field? We designed Business Scorecard Manager for the toughest operational environments you can imagine. Here is why Superintendent Gilboa of the Israeli Police chose Scorecard Manager: “We sought a powerful, yet user-friendly tool that wasn’t intimidating for our officers to use. A system that could automatically link information from a wide range of data sources across the state. A solution that offered us all the flexibility we needed to adapt to any changes we may need to consider in the future.”

Likewise in construction, where you need to turn on a dime if you want to minimize costs and downtime, Business Scorecard Manager is getting the thumbs up from enthusiastic users and CIOs. “If we can identify problem areas immediately, then we can act right away to fix the problem and avert disaster,” said Allen Emerick, Building’s Director of IT, Applications and Integration, Skanska USA.

In fact, we’re already putting our money where our mouth is and using Business Scorecard Manager to help run the show here at Microsoft. Internal customers are often the most demanding, so we were especially delighted when Daniel Rubiolo Mendoza, Operations Manager, MSIT trialed Scorecard Manager and told us, “Scorecarding offers true visibility into employee accountability and actions. Managers and our CIO can see problems and successes in real-time, just as our employees can”.

The challenge that we’ve addressed

In the contemporary work environment, a large part of people’s lives is spent chasing scraps of information from people and systems in order to perform tasks that are at best only tangentially related to the organization’s strategy. It’s frustrating and wasteful, but mostly, we just accept that’s the way things are. It’s not a matter of bad management or poor communication skills. In the modern organization people are empowered, committed and professional – they don’t want to be micro-managed, but they do want some assurance that their efforts have the right focus – and that assurance is often lacking.

Who hasn’t come up against the situation where a colleague – perhaps even in the same department – seems to be pursuing objectives totally at variance with your own? For example: you might be under the distinct impression that the company’s core objective is to go for rapid market expansion, and hang the expense in terms of new staff or resources. But your colleague and peer believes she has it on good authority that actually, the priority is to shore up the existing customer base, focus on customer support and slow down on new business development costs.

Usually the contrast isn’t that sharp, but whether you work in sales, purchasing, HR or IT, even nuanced differences in strategy can have a major impact on how you perform, or how you ought to perform.     

Typically the problem here is not lack of information. Managers in “information rich” organizations spend too much time looking at positive information and overlook areas needing attention. It’s not unusual for customers, suppliers or workers on the shop floor – people who have never read a financial report – to see that the writing is on the wall for a company long before the news moves up the management hierarchy.

Common complaints from managers include:

• I do not have the visibility into performance that I require to ensure my team are on track to achieve our goals
• Other offices or team members are driving towards different objectives from mine
• It’s clear from my annual appraisal that my manager hasn’t a clue what my job involves
• I have no way to prioritize my work
• Despite all the technology on my desktop, things really haven’t moved on from the in-tray and out-tray
• Someone is underperforming – but I can’t identify who or why. I don’t want to upset the wrong people so it is safer to keep quiet
• It takes too long to get information so I might as well make decisions based on gut instinct
• My commitment is judged on the hours I spend in the office rather than the value I deliver to the company

Dashboards: theory and practice

The advent of personal productivity tools means that we can achieve far more in a working day than was the case ten or twenty years ago. And yet when it comes to working smarter, not harder, we reach for the latest self-help bestseller, and not for the computer. All that is about to change. The advent of a performance management tool that is embedded in other desktop productivity tools could herald the biggest revolution in software since the same thing happened with the spreadsheet.

Twenty years ago there were almost as many spreadsheet packages as there were users. It did not really matter because those users tended to be the assistants of senior managers, typically in financial functions. There was little or no collaboration. All that changed radically when the “broad masses” started using spreadsheets, and wanted to share and compare. Excel, as part of the Office suite, became the standard.

Something similar is now happening with business performance “dashboards” or “scorecards”. These appeared a few years ago as niche technology vendors responded to new management theories, such as those expounded by Robert S. Kaplan and David P. Norton in The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment (2001). The basic premise behind these theories was a sound one: that companies were too fixated on financial measures of success, which are essentially historical. Instead, they should be looking at Key Performance Indicators (KPIs) – metrics that tell you what’s actually going on in the company today, such as sales cycle time, customer satisfaction and innovation. Metrics that are meaningful to people outside the finance department.

The goal was to present these metrics to executives in a highly graphical dashboard, so that they could identify problems and take corrective action before they impacted financial performance. Graphs, charts and other forms of data visualization replaced the traditional rows-and-columns of typical business intelligence reports, so executives could see at a glance if there was a problem.

Obstacles to “dashboard culture”

Dashboard culture can fail to take root for a variety of reasons, but the main one is high vendor and implementation costs and risks.  The challenges are especially familiar to Chief Information Executives and others responsible for managing corporate intelligence:

• Data systems are organized to do jobs (like processing sales) and not “telling a story”
• Most companies have a variety of data systems – getting heterogeneous data into a common pool can be a nightmare
• Large vendors typically scope out huge projects with long development cycles – and most organizations (rightly) lack the risk appetite to get involved
• On the other hand trying to create a performance management solution yourself is a huge drain on resources. And risky: if the people who build it leave, the whole house of cards is likely to tumble (especially if the documentation is lacking)
• Specialist developers of performance management solutions (“boutique vendors”) may create useful bits of technology, but it’s a devastating waste of money when they go out of business

Consequently, while a lot of companies have toyed with dashboards, the end product rarely makes it out of the boardroom. Inevitably, this means that people cannot possibly deliver on the gurus’ mantra that “Success comes from having strategy become everyone’s job” (however much they are committed to this goal). KPIs cannot be cascaded down and across the organization to become meaningful “personal stretch goals” that employees can identify with and respond to. At lower levels of the organization, each department is typically left with its own way of managing things. Finance has one tool, customer management another, and supply chain management yet another.

Why things are different with Scorecard Manager

The customer experiences outlined at the start of this article demonstrate some crucial differences between the traditional approach to dashboards, and what Microsoft now offers. First, information is delivered in a genuinely collaborative environment and on an integrated platform where people interact using familiar Microsoft tools. Second, Microsoft offers unrivalled expertise in both end-user and IT environments – which means that project leaders don’t face an uphill battle getting projects off the ground; the acceptance is there. And thirdly costs are dramatically reduced. Of course, there is still a requirement for consultants to help conceptualize the KPI hierarchies and design the systems. But our technology supports a radical new approach in which the experts work with business users to install and create the shell system and then send it to the IT folks who can set up the live data feeds. These are based on SQL Server, which is fast gaining ground in the market for business intelligence data marts, and delivers information at a much lower cost than the traditional database and data warehousing software systems.

The other good news is that this is a peaceful, almost silent revolution. Perry Stoneman, Vice President of Sales and Delivery at Capgemini Canada said that from the user point of view, they came into work one day and found the dashboard functionality was there on the desktop – rollout of the system was fully automated within Microsoft: “Generally, when we do something new I hear about it, but this time there wasn’t a single phone call of complaint,” His colleague Mike Kassabian, who managed the deployment, added, “I remember deployments in the past where we had to address a number of user concerns. But after this one, our team was applauded in the management meeting.”

People pursue personal careers with a company or organization because they want to use their talents and skills to contribute to its success – Business Scorecard Manager, integrated with collaborative productivity tools, now offers the opportunity to make us all corporate strategists who can literally see, by the day and by the hour, how they are making a difference.