Five Skills Key to Successful Business Operations Management – You Could be Great at Operations if..

Five Skills Key to Successful Business Operations Management – You Could be Great at Operations if..

by | Business, Business Operations, Career, Leadership, Management, Managing Yourself, Performance, Productivity, World of Work

You cannot be a good business leader unless you thoroughly understand the business operations in your organization and how it links to its performance. I have noticed one big reason business strategies fail – it is the unbelievable reality that senior leadership many a times doesn’t understand the basics of their business. How it runs and what makes it run. An operations mindset is extremely critical for all leaders – No matter how good you are at framing strategy; it also has to get executed successfully for an organization to succeed. This is where the business operations team can play a big role, by not only providing insights to the leadership on the ways to improve business performance through profitable growth and strategic management of costs and risks but also to reduce the gap between strategy and execution through disciplined process implementation. Quite a few big buzz words there. But it boils down to one thing – to succeed in business, you have to understand and be good at operations. I strongly believe an operational mindset is a mental “muscle” that can be developed. For all those who want to develop this muscle or are thinking of a career in business operations, this post is for them.

So without further ado, here are the five top skills/loves that I believe are must-haves for those who want to enhance the performance and productivity of organizations through understanding and improving their operations:

Must-Have #1 – You love people:

Lee Iacocca said:  “In the end, all business operations can be reduced to three words: people, product and profits. Unless you’ve got a good team, you can’t do much with the other two.” Understanding people across multiple functions and roles and leveraging their strengths is extremely important to meet objectives – in an operational role where you have to work mainly in a matrix structure where you have lots of responsibility but not always the required hierarchical authority, this becomes paramount. You must know how to connect with people and energize and enthuse them. Communication skills, beyond the verbal and the written, the ability to listen and read between the lines is an useful asset to align people to your goals. And all this is not possible unless you have a genuine interest and love for people.

Must-Have #2 – You love numbers:

Does the idea of deciphering lots and lots of rows and columns of numbers spread across sheets give you the shivers ? As they say, the devil lies in the details and to be good at operations, making sense of numbers must excite you. Plenty of common sense plus and an ability to derive meaning out of the different ways numbers can be combined or dissected to arrive at the right performance metrics for early warning signals for the business as well as measuring the results is part and parcel of the operations role. Knowing your numbers and the different levers that can be applied to them makes you the master of the game.

Must-Have #3 – You love wearing multiple hats:

In operations, you have to be put yourself in the shoes of different functions on a day-to-day basis – sales, IT, finance, business, delivery – to be able to understand the requirements from all perspectives and execute on it. A specialist in operations with a generalist bent of mind to connect all the dots in the organization for the right solutions.  You have to become the subject matter expert in many things at the same time. Quoting from an article by Vikram Mansharamani in HBR – there appears to be reasonable and robust data suggesting that generalists are better at navigating uncertainty. Professor Phillip Tetlock conducted a 20+ year study of 284 professional forecasters. He asked them to predict the probability of various occurrences both within and outside of their areas of expertise. Analysis of the 80,000+ forecasts found that experts are less accurate predictors than non-experts in their area of expertise. Tetlock’s conclusion: when seeking accuracy of predictions, it is better to turn to those like “Berlin’s prototypical fox, those who know many little things, draw from an eclectic array of traditions, and accept ambiguity and contradictions.” Ideological reliance on a single perspective appears detrimental to one’s ability to successfully navigate vague or poorly-defined situations (which are more prevalent today than ever before).

Must-Have #4 – You love solving puzzles:

Providing smart and creative recommendations for business process improvement is one of the key areas in which business operations team can be key contributors. As an operation person, you have to identify the problems, dig for knowledge in the vast amounts of available data and then analyze it to arrive at the areas of focus. As per research by Gartner, through 2012, 80% of organizations will struggle to recruit the talent required to meet their business analytics objectives. This needs an inquisitive mind, a persistent approach and deduction skills. If you are a crossword or Sudoku fanatic, you are in the right “zone” here 🙂

Must-Have #5 – You love WORK:

Back end work, strategic work, boring work, last-minute deadline work, grunt work,  thinking work, transactional work, delegated work, filling in for someone else work – your work landscape in an operations role will constantly be changing and switching. So, you must have a great love for work by itself and in itself in all its myriad shapes and forms. If you are particular about doing only one type of work and consider certain types of work below you – this is certainly not the role for you. The duties and responsibilities in this role are fluid and are different from company to company or even business head to business head. I have rarely across a defined job description that remains constant over a period of time in my career. So, your guiding principles and measuring stick for your work should be based on what you want to achieve, not what type of work is needed to get there. A passion for work coupled with an ability to set your own standards for excellence is crucial in this role.

In addition to the above, a  business operations person must be able to exude confidence, have conviction and be firm on what he/she believes is the right thing to do. It is only then that by focusing on some of the points where structure, processes, people and systems intersect, and engaging and influencing all the stakeholders involved to work on those critical junctions, the business operations team can release benefits that ripple across the organization.

What other skills do you think are necessary for successful business management and operations? What have I missed? Please share your experiences below. I would love to hear and learn from you.

Image courtesy – http://www.flickr.com/photos/michaelheiss/3090102907

Five Sales Performance Metrics Key to Successful Business Growth

Five Sales Performance Metrics Key to Successful Business Growth

by | Business, Business Operations, Leadership, Management, Performance, Productivity, World of Work

Every metric has a story to tell. Dig in over a period of time, break apart all that goes into the metric calculation, join the dots and there you have your story. But then you also have to ACT – your success depends on what you do after you figure out the story. What do you need to do more of? What do you need to eliminate? With the budget season in progress, sales performance metrics are on my mind again. In this Accenture analysis of Sales Performance Optimization Study, sponsored with CSO Insights, sales leaders say their top priorities for the past year was increasing sales effectiveness (56 percent), followed by increasing revenues (52 percent) and improving up-selling/cross-selling (39 percent). The Operations team can play a big role in increasing sales effectiveness with their clear understanding of the various moving parts and inner workings that contribute to high sales performance. These insights can help determine which levers (metrics) can actually help improve sales efforts and align the sales organization to the business strategy.

When it comes to sales metrics, one size definitely does not fit all. The key is to select a good mix of lagging and leading indicators – a set that not only helps you to measure results but more importantly, gives you the ability to predict outcomes. Going beyond the standard booking or quota achievement vs. target, here are five other metrics that I believe go a long way in ensuring sales effectiveness:

Sales Performance Metrics #1 – Funnel or Opportunity Pipeline:

In the current quarter, there is not much you can do to increase sales radically but you can still implement steps to make the sales grow for the rest of the year if you know where to focus efforts. This metric helps determine the nature of funnel and sales expected in future quarters/months. Organize and record each opportunity the sales team is prospecting and assign them a status such as “qualified” or “suspect” or “proposal” along with an estimated value associated with each of them. Assign probability percentage to each status based on your past performance at each stage. The sales people can then prioritize their time according to the probability of a win (status) and the impact of a win (estimated value). This metric is a dynamic metric and will keep changing as new opportunities come in or old opportunities move out as delayed or lost. The value of sale multiplied by the status percentage gives estimated total sales that you can expect at any period in the future provided the opportunities and stages of each opportunity are diligently tracked and recorded.

Sales Performance Metrics #2 – Sales Mix:

Based on the sales strategy of the year, one can come up with different mixes or ratios that need to be tracked as metrics for the year. This is essentially categorizing your funnel into different fields – say by nature (new, renewals or farming), by market segment (products, services, maintenance), by demographics or geography (Americas, Europe, Rest of World), by channel (direct, indirect). The ratios are arrived at by dividing the mix value by total funnel value. This gives a view on how far your strategy is being implemented at the ground level or if there is a possibility of good returns on investment made in any particular area. The sales mix ratios help zoom in on decision areas and decision types and can change from time to time based on the granularity of information available. Again, here is where the operations team can play a big role in ensuring that data strategy, quality and integrity is maintained in all systems – and garbage in-garbage out decision making is avoided.

Sales Performance Metrics #3 – Cost of Sales to Revenue Ratio:

This is a metric that used wisely and measured as a trend over time can show the overall efficiency of the sales team by segment, market or any other growth area that is in the strategy plan. The calculation should be based on the total costs for the selling efforts of each area of business. Total Sales Costs includes salaries, commissions and expenses for sales management, sales people and sales support. Divided by the revenue in the same period from the area of business, you can arrive at the ratio. I like this metric better than sales productivity (Revenue by number of sales people) as, in a global organization, salaries vary across regions, so does the revenues based on the nature of the business area. Measured over a period of time, it can give useful insights into where sales investments in terms of people is needed to get higher revenues, how long it takes for additional sales headcount to generate revenues and other such trends.

Sales Performance Metrics #4 – Conversion Rates and Ratios:

Conversion rates are very useful in identifying sales methodology or process issues, including poor proposal preparation, inaccurate forecasting or funnel categorization efforts, insufficient research into customer buying behaviors, core strength and weakness of sales persons. Conversion rates need to be measured at various steps of the sales process – the most common one is the win ratio –what percentage of qualified opportunities get closed as won. Other useful rates could be the percentage of deals that get lost after responding to proposals, percentage of qualified opportunities that show no movement over a long period of time, percentage of opportunities that are lost without any reason for loss – to pin point where the improvement is needed in the process and is useful in the qualification and prioritization of opportunities.

Sales Performance Metrics #5 – Gross Margin % by Sales Person:

This metric is a bit controversial as it is not generally used to measure performance of the sales team nor used in sales incentive plans. The general idea is that sales team is responsible for getting in the bookings and revenue and the rest of the organization has to ensure that margins are made. I am of the view that unless we track and reward sales people based on not only the volume of the bookings but also the quality of bookings, the organization cannot achieve its margin mandate. Discounting practices, pricing, “value” selling, terms and conditions on scope, timelines, milestones all affect gross margins and sales team has the highest influence with the customer to ensure favourable terms in these areas. So why not measure not only the actual gross margins of revenue by sales person but also future margins based on the funnel details? This will help the entire organization to plan and also help the sales teams to make the “right” (read profitable) sales.

“Gut feel” is all good but you also need the right data and indicators to validate your gut feel. On the other hand, no sales leader will want to go overboard on metrics and measurements that put additional load on the bandwidth of their teams taking time away from “selling” to filling in all sorts of data requirements. So, it is important to choose the right set and number of metrics to help focus strategy and efforts based on not only past performance but also through a rationalized view into the future to enable course corrections as necessary for the success of the business before it is too late.

So what is your story? What sales performance metrics do you think are must have leading indicators to improve forecasting accuracy? What are some of the more creative sales metrics that you have seen ? I would love to hear back and learn from you.

Pic courtesy: http://www.flickr.com/photos/ericparker/1537862310

Five Critical Components of Business to Ensure Operational Excellence – Business Operations Performance Management

Five Critical Components of Business to Ensure Operational Excellence – Business Operations Performance Management

by | Business, Business Operations, Career, Leadership, Management, Performance, Productivity

In the day-to-day busyness of business, it is very easy to get mired in transactional stuff and lose sight of your mission and the reason you are in business and why you do what you do. How much more effective the organization would be and how superior the results if every person working on every task in the company can link it upwards stage by stage to the overall vision for the company ? If the person went home every day with a sense of fulfillment through finding Meaning in Work and knowing that his/her work contributed to a higher purpose? A shared vision is a very powerful motivator for people and operational excellence is possible only when there is a critical mass of people for whom business is personal.

Wishful thinking? Not really, when you consider that many studies have proved beyond a doubt that meaningful work leads to personal happiness, professional success AND profitable growth for the organization that provides this (clarity of vision, mission and inter-linkage to the efforts at ground-level).

So, how do you align your day-to-day business operations to ensure that you and your people are finding meaning in work? It all comes down to how well you have thought through, communicated and implemented these components of business:

Business Component #1: Vision Statement – A vision statement has the potential to become a rallying cry, a clarion call to unite every person in the company towards a higher purpose. Too often, vision statements are not clear enough or even inspiring enough to really become the powerful tool that it can be. Consider Nelson Mandela’s statement – “one team, one country” or Microsoft’s in the 90s – “A computer on every desk and in every home; all running Microsoft software.” A bold, definitive statement that shows people the destination and the purpose of their work is the starting point for everything. Coupled with a clear guidance on values and desired behaviours, a great vision statement can truly work to drive excellence in the organization. Read how Zappos.com CEO focused his team from “needing to motivate people to get things done” to “inspiring them to want to do things beyond expectations” (and so successfully) here.

Business Component #2: Strategic Planning – This is the next step, moving from the “where” to the how. A good strategic plan provides the map to achieve the vision. Working through the strengths and weaknesses of the organization, it should outline the actions that need to be taken to meet the goals. The plan should have clarity (admittedly difficult in the flux that exists in business today) and well-defined accountability and timelines so that it becomes clear and easy for everyone in the company to enable them in the decisions they need to make today to arrive at  to where the organization needs to be tomorrow. You will know if your strategic plan is clear if people around you understand what the story is – what leadership wants to do. Also, a strategic plan is not just about the future, referred to regularly, it can also be quite useful in assessing the current issues that are causing problems. Have a long-term strategy but refresh the plans operationally in shorter term periods so that the plan remains achievable and is not completely disconnected from reality.

Business Component #3: Budgeting – I call this “putting your money where your mouth is” or walking the talk. There is no point having a strategy if you are not willing to invest in it. This is where strategic planning gets transformed to operational realities. The budgets should be completely aligned to the strategic plan and not just the target numbers – in the short term and the long term – and thus serve as the guideline for communicating and executing on the business strategy. Break down the budget into tasks with timelines, identify the stakeholders best suited for each task, align existing processes and design new processes to ensure sustainability in advance. Assign accountability within the organization not just at the senior levels but right up to the front-line staff to ensure everyone knows and is signed up for the budget.  This helps in providing a clear line of sight for achieving the budget and hence the vision while building confidence in the budget within the organization itself.

Business Component #4: Measurements or Metrics – Numbers keep you honest provided they are not manipulated. Metrics help measure the effectiveness of the plan and the execution but is important to measure what is important :). Care must be taken to set metrics that actually drive the desired behaviors and do not risk people running after the wrong goals. The choices of key metrics need to be reviewed periodically – business is dynamic, why should metrics remain static? What makes sense to measure in today’s scenario may be irrelevant tomorrow. Also, it is not enough to measure, you also need to act. No metric is useful unless there is an action plan that arrives out of it and is communicated and implemented with urgency. Otherwise, a metric becomes just another number on a report that nobody pays attention to till it is too late. Metrics also serve the purpose of “milestones” or “scoreboards” for your vision to keep a track of the successes along the journey, create competitive spirit  and very importantly, serve as reasons to celebrate wins along the way.

Business Component #5: Execution – And finally, the most difficult part of the process – execution and execution at the speed that is needed. Larry Bossidy, the former CEO at Allied Signal, Inc. and Honeywell, and the co-author of Execution: The Discipline of Getting Things Done, said it like this: “Corporate strategies are intellectually simple; their execution is not. The question is, can you execute? That’s what differentiates one company from another.”  I have written about getting things done in complex organizations earlier – the point in this context is injecting the right “dose” of urgency into the organization. Spread energy and enthusiasm into the organization through the execution phases to generate alignment, urgency, and engagement in a majority of employees in the organization – to answer the “what is in it for me” question and to make the work “personal” and hence drive operational excellence through meaning.

The common important thread through all the above is of course, the culture that is built, lived and sustained throughout the organization – without the right culture, you may set everything up perfectly but the desired outcome will be far from reality. If people do not feel they have a safe environment or that there is mutual trust and respect, the energy gets drained out battling office politics, pacifying egos management and conflict management. There is no energy left for people who wish for meaning in their work, look for it and work towards it in their everyday activities. Operational excellence becomes a mirage. As Louis Gerstner said – ‘I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game.’

What have you seen worked in finding meaning in work in your organization? What vision statements do you think are great examples? How do you give meaning to your own work? I would love to hear and learn from you.

Pic Courtesy : http://www.flickr.com/photos/dunechaser/4395780325/

Five Toxic Employee Attitudes that should be Banned from the Work-Place – People Barriers to Operational Excellence

Five Toxic Employee Attitudes that should be Banned from the Work-Place – People Barriers to Operational Excellence

by | Business, Business Operations, Career, Leadership, Management, Managing Yourself, Office Etiquette, Performance, Productivity, World of Work

Do you sometimes look around you at work and think you are in the middle of a role play game with quite a few characters that play the same roles again and again? I do and not being a very patient person, it does take a lot of effort for me to keep my mouth shut and continue to stay in MY character and play the game. For that is what the corporate world is – a game. And even if you don’t want to play the game, you need to know the game and know the characters very well to achieve what you have set out to do. In my case, it is operational excellence. Your objective could be something else but you would agree with me that it would make our workplace much more pleasant and energetic and reaching business goals that much easier if some Toxic Employee Attitudes were left out at the door. So much of organizational success depends on the culture that is prevalent in the organization. I have written about the part that leaders should play or not play in the past and today’s post is for the rest of us. To be really effective at work, we have to know and understand the people we work with. Each one of us at work has a responsibility to ourselves and to others to not indulge in toxic attitudes and behaviors at the work place. Life would become so much simpler (albeit less dramatic) then.

Here are the five most common Toxic Employee Attitudes that I have seen block personal and professional growth at the work place – let me know if I have missed any:

Attitude #1: It’s not my job or Take No Initiative –

Such people specialize in advice. They can spend hours discussing how Mr. /Ms. So-and-So (especially those in management) are not doing their jobs and if they are, how they should actually be doing this much better. They are experts in their knowledge of who could or what could be better – and the more they know and discuss, the better they feel. And no, they don’t spend time debating on how they could contribute or help. Wouldn’t it be great if they actually used this knowledge to take initiative themselves to actually go and volunteer to DO some of these things, that they know so much about, themselves ?

Attitude #2: I know who is pulling the strings and why or the Conspiracy Theory –

The intelligence agents who think that there is a sinister agenda behind every move in the organization – they thrive on drama and love sharing their inside intelligence with people on their latest theories on how management is out to get them. This one is actually fallout of less than transparent communication from the leadership teams which provides fodder to some people to create stories and scare the living daylights out of people around them. Fear and confusion are not conducive to performance and productivity. Wouldn’t it be great if these people took this particular brand of creativity outside the workplace and wrote thriller novels that I am sure we would all love to read?

Attitude #3: What is the point or We can make No Difference –

Most commonly seen in people who are unhappy with their jobs for whatever reason, this attitude is a complete dampener for people around them who love their work and are passionate about what they do. They do not believe in positive outcomes and spend time curbing the enthusiasm of those that do. If you are unhappy and still choose to stay on, it is your choice. Now that you have made that choice, do you want to spend your time in doing mediocre work for work’s sake or try to inject a dose of excellence in whatever you do and become happier by the day? And let others do their best work in peace?

Attitude #4: I cannot/will not move forward and I will do my best to pull you back too or the Frog in the Well –

I don’t understand the reasons behind this attitude myself – on why someone would want the opposite of a win-win situation. But I see this very often, common symptoms are – share no credit, slander and back-stab at the first opportunity; sabotage any work that one does not directly own, etc. Why? Why? Why? Why would you want to pull down people when you can help push them up and maybe rise yourself too? Beats me but please stop doing this – you are sabotaging yourself in the long run.

Attitude #5:  Who me? I didn’t say/do anything or the Passive Aggressive behavior –

This is a very difficult attitude to identify or nail down as such people hide behind the smoke (And I am not being dramatic). Look for these people in meetings and conferences – no response to requests for question or feedback but the moment the meeting is over, you can find them with an audience around them near water coolers, coffee tables or whatever the organization version of that is. This is wrong, that is a bad plan, I know this will not work, we are doomed – you get the drift. Such people don’t speak up when they are given the opportunity to but are very vocal behind the scenes. And even more dangerous, sometimes very quietly block, hinder or just delay their part in the work flow. If you don’t like something or you don’t support a decision – can you please speak up? Chances are that your feedback could be very critical and help influence the decisions or change things the way you want.

We could do so much more if we learnt to respect ourselves and others at work.  Not see each other as adversaries but as fellow travelers – united to work for a common goal. As Howard Schultz, Founder & CEO of Starbucks says – Victory is much more meaningful when it comes not just from one person, but from the joint achievement of man.  The euphoria is lasting when all participants lead with their hearts, winning not just for themselves but for one another.

Do you think I am being very harsh or did you find yourself nodding your head along the post identifying the characters that you encounter in your organization? What do you think each of us can do make the corporate culture less toxic and stifling? What behavior’s do you think impede you in your journey to excellence at work? I would love to hear and learn from you.

Pic Courtesy : http://www.flickr.com/photos/dailypic/3360561033/

Five Key Characteristics of Good Project Governance: Towards Better Decision Making

Five Key Characteristics of Good Project Governance: Towards Better Decision Making

by | Business, Business Operations, Leadership, Management, Performance, Productivity, World of Work

Effective project governance is in demand now more than ever before. According to studies, more than 80% of investors now are willing to pay a share price premium for well-governed organizations. Why? Because Governance addresses the needs to establish structure, hierarchy, sponsorship, ownership, accountability and communication to support enhanced consistency in execution, ownership and delivery. When governance is working correctly, decision-making is no longer the stalling point and the organization performs at an optimal level.

Decisions are the coin of the realm in business. Every success, every mishap, every opportunity seized or missed stems from a decision someone made or failed to make. Yet, in many firms, decisions routinely stall inside the organization, hurting the entire company’s performance. The culprit? Ambiguity over who’s accountable for the decisions. (Harvard Business Review by Rogers and Blenko, 2006)

There are multiple definitions available for ‘Governance’:

  • UNESCAP defines ‘Good Governance’ as the ‘Process of decision-making‘ and ‘Process by which decisions are implemented (or not implemented)’.
  • As per Turner (2006), governance of a project involves a set of relationships between the project’s management, its sponsor (or executive board), its owner, and other stakeholders. Project Governance provides the structure through which the objectives of the project are set, and the means of attaining those objectives and monitoring performance are determined.

Very generic definitions? Let us then go through some more details of Governance concept to understand it well. There are 3 levels of ‘Governance’ in any organization:

a)     Executive layer: This layer is considered as the highest level of Governance addressing the ownership, accountability and strategic alignment of initiatives with the organizational goals and identifies the corporate governance.

b)     Context/Execution layer: This layer sets up the context in which project is being executed and addresses two main components: (i) Establishing right infrastructure of program and portfolio management to link projects to corporate strategy, which ensures the right projects are executed. (ii) To make sure that organization has the capability to deliver the projects successfully so that projects are done right.

This layer mainly identifies the project governance and includes the decision and analysis boards, which take adjustment and corrections from Executive layer and understand the needs for adjustment and correction from the Delivery layer. This layer also takes into consideration partners, vendors and third-party participants in your programs and projects.

c)     Delivery/Individual project layer: This is the lowest working layer where set project objectives are actually executed and attained. Resources at this level are the daily work efforts owners. At this level, program and project management office (PMO) are responsible for the collection and accumulation of the data that support performance reporting. It is critical to keep a daily understanding of decisions, risks, issues and activities that will ultimately impact the delivery of initiative’s outcome. The main stakeholders at this level are Project managers, Technical architects/Engineers and PMO resources.

This three-layered structure, enables linking Project Governance to Corporate Governance and delivery capability. In a way Project governance is the bridging mechanism between corporate governance and project management.

So, how do you ensure that you have an appropriate project governance model and it is good enough per above definitions? Here are the key governance characteristics, identified by United Nations ESCAP, for achieving good governance:

Project Governance Characteristic #1: Sponsorship and Accountability

Recent research has shown that project failure is often not directly attributable to the performance of project managers and project teams. Sometimes, project failure is caused by contextual factors, such as the breakdown of sponsor governance and support.  Project sponsor holds a critical position of power being the Governor who owns the business case and provides a link between project and organization’s management, leading ultimately to the Executive Board.

Weak sponsorship not only in terms of resources but also in providing clear and timely direction, investing required time to the projects they sponsor and appropriate project management experience to have good understanding of their own role, are the common problems seen in sponsor governance failures. Your project/initiative should have a solid buy-in from the sponsor (can be executive management) and should be aligned to the organizational goals to make it a success.

Clear definition of roles and responsibility brings accountability. Who is accountable to who varies, depending on whether the decisions or actions are taken internal or external to function/organization.  In general each defined role is accountable to those who will be affected by its decisions or actions.

Project Governance Characteristic #2: Transparent with well-defined communication channels

Transparency means the decisions taken and the enforcement done is in an open and easily understood way. It means that information is freely available and directly accessible to those who will be affected by such decisions and their enforcement. It also means that enough information is provided and that it is provided in clear and concise forms and  through the right medium of communication.

Accountability (Characteristic #1) cannot be enforced without transparency.

Communication is the vehicle that powers the entire governance model. Establishing structured communications will maintain linkages throughout the three levels of governance and assure that the organizational strategy, mission, vision, and desired outcomes are maintained and aligned with the execution. This alignment can provide assurance to the organization, knowing that the outcomes of the performing initiatives are meeting its goals, as the predefined process provides the proper oversight to the responsible people. Well defined PMO (Project management office) reporting process to communicate on the initiative performance across three layers of governance plays a key role here.

Project Governance Characteristic #3: Responsive, Effective and Efficient

Good governance requires that institutions and processes try to serve all stakeholders within a reasonable timeframe and produce results that meet the needs of stakeholders while making best use of resources at their disposal i.e. decision making processes, to be supported by timely, reliable and relevant information. The requirement for timely information indicates that the reporting effort should be minimized. And reliability of information should be ensured by exposing correct current project status. Efficient project management and PMO processes are very significant to maintain the integrity of the information used to keep Project dashboards up-to-date for keeping stakeholders informed about the progress, metrics, performance, change requests and results of the project/initiative.

Project Governance Characteristic #4: Participatory, Equitable and Inclusive

Participation is a key to good governance and as such needs to be communicated and organized. At project level governance, main participants can be the Sponsor, Middle management, PMO, Project manager, Third party vendors, Partners and Customer. Ensure that all the participants feel that they have a stake in the decisions and do not feel excluded from decisions taken. Since there are several actors and as many view points, good Governance requires mediation of the different interests to reach a broad consensus. Communication of the consensus reached, to all stake holders, should be done in transparent and timely way. In general for project governance, your PMO is a crucial body for defining and managing project processes to deliver the business case outcome, defining how the project will be monitored and controlled and in keeping stakeholders involved as well as informed.

Project Governance Characteristics #5: Follow a rule of law.

During the decision-making process, law of land should never be ignored and to ensure that, good Governance requires fair legal frameworks that are enforced impartially. This is where a good understanding of contracts and agreements with customers becomes important. Accessibility to these and project terms and conditions need to be in place along with well-defined guidelines for dos and don’ts.  All decisions also need to be made considering the mission, vision and values of the organization so that the spirit in those words is reflected in all the action on the ground.

With knowledge of these characteristics, it is clear that governance is an ideal which is difficult to achieve in totality; however, actions must be taken to work towards this ideal with the aim of making it a reality because as Napoleon Bonaparte said – Nothing is more difficult, and therefore precious, than being able to decide.

So, review your current project management governance model, see if these characteristics are well-built in and if there is room for improvement. I hope that these characteristics can serve as guidelines for you to make your project a model for Good Governance.

What are your experiences with project management governance and what challenges have you faced in good governance model establishment? Please share with us so that we can learn more from your experiences.

References:

http://www.unescap.org

Eamonn V. Kelly(2010) , “ The principles of effective project governance” retrieved from http://www.pmi.org

Picture Courtesy: http://dilbert.com/strips/comic/2009-09-06/

Five Considerations to Transform Data into Insights through Effective Business Reporting

Five Considerations to Transform Data into Insights through Effective Business Reporting

by | Business, Business Operations, Communication, Leadership, Management, Performance, World of Work

Today in businesses, we are not short of data. There are more than enough data points available through multiple channels for us to organize, analyze and review to our heart’s content or discontent as the case may be. Knowledge, insights and getting to actionable recommendations by sifting through this voluminous data is the difficult part. This is where effective Business reporting (or management reporting or enterprise reporting) can serve as a medium to provide knowledge in a form that enables the key-stakeholders to make informed decisions at the right time for sustained organizational success.  Management Reporting is an art and there is no single common method or set of steps to get this right. What does help though is keeping in mind the real goal behind all the reams of business reports you generate – enable the leadership to understand quickly what is going on in the business and to decide what to do with it. The business operations team can act as a primary driver in this area through creating and fine-tuning the business reporting process in the organization.

We are drowning in information, while starving for wisdom. The world henceforth will be run by synthesizers, people able to put together the right information at the right time, think critically about it, and make important choices wisely ~ E. O. Wilson

I have been doing business reporting for many years now and have to keep reinventing my style to suit the organization I work with every so often. However, I have found the following common considerations useful for making this function effective:

Consideration #1: Focusing on what’s Important –

Take some time to define the goal or the purpose of the report. To do this you need to sit with the primary intended audience of the report and agree on the area of decision-making that they want the report to support – it could be financial approvals, resource allocations, operational planning, strategic directions, opportunity qualifications etc. Once you have the purpose, focus on the primary audience themselves – what is their working style preferences (highlights vs. details), understanding level (use of terminology and technical complexity), position in the organization (authority for info provided and decisions to be made) and priorities (to determine the flow of report). Agree on the format (presentation, word document, excel sheet or visual dashboard) that the audience is most comfortable with upfront – this is important as it allows decision makers to focus on the content rather than the form. With the purpose, the level and the format of the reporting well-defined and understood, it becomes easier to focus on the data needs of the report.

Consideration #2: Source of Data –

Determine the sources that can provide you with reliable, accurate and updated data to generate the report. It is highly unlikely that a single source of data can give you the information necessary to prepare a management report. Data could come directly through systems (if you are lucky) but you may still need inputs from multiple people in the organization to give colour to the data.  So once you know what information needs to be captured, processed, analyzed, and reported, spend time in organizing the information processes and related systems for effective reporting. You don’t want to spend time running around fighting through organizational silos and inadequate data collection systems to get the relevant data in the format you want from the systems or following up with stakeholders endlessly for their inputs. Work with the relevant people to align the systems to your business reporting needs and ensure that the reporting process and timelines are well-defined and communicated with all the stakeholders who need to provide inputs. The quality and integrity of the data sources will determine the quality and integrity of your report.

Consideration #3: Analyzing and Interpreting the Data –

Now that you have the goal, the format and the source of data set, it is time now to extract knowledge from the data, analyze it and interpret it to a form that will lend itself to effective decision-making. With the advent of big data and business intelligence tools, there are many off-the-shelf products that promise useful insights with a few clicks. It would be really nice if things were actually that easy – nothing so far has convinced me to stop using my brain as the best tool I have at my disposal when I do my reporting :). While data and analytic tools can bring in precision and help accelerate the whole process through saved time and efforts, once data from various sources is collated and information is extracted, the real value that an individual can bring in is yes – connecting all the dots together. We need to keep in mind a few questions while sifting through the data and deciding what to present – what do the numbers/feedback/results mean? How do they impact the problems that we have on hand or that could arise and the decisions that need to be taken? What are the options we have for the actions that need to be taken? This approach needs domain experience, understanding of the organizational dynamics and analytical skills (and hence the heavy dependency on the human brain).

Consideration #4: How Much is Too Much? –

There are two parts to this – the level of detail and frequency of reporting needed. And for what to do here, you have to go back to the purpose of the report and who the primary audience is. For the first part, the reporting team needs to determine the optimal amount of details to make decisions and discard all the other data collected for “just in case” and “good to have” scenarios. Avoid reporting just for the sake of reporting – because you have the data, because you have a lot of time in your hands or you bring in your personal need to impress the management. That way, soon the cost of knowing outweighs the value of knowing. This is why I said earlier, management reporting is an art – you have to balance the how’s with the what’s to hit the “right” spot for the organization. If the report answers these three questions in the best way possible – how have we done so far, where are we headed and what we need to do to arrive at the performance objectives – you have achieved the goal of the report no matter what it is. You also have to set the reporting cadence and communication. How often do you need to generate the reports to ensure that the insights remain meaningful and not repetitive or in the other extreme – hindsight knowledge too late to do anything about? Along with the primary audience, who else would benefit or be affected from the decisions taken by the primary audience from the reported insights? These are important aspects to consider in setting up the reporting process and mechanics.

Consideration #5: Tracking Desired outcomes and Continuous improvement –

Once you get the reporting right, it is time to make it effective in reality. Set up a mechanism to track the decisions made as an outcome of your reports to ensure that all the hard work that has gone into preparing the report is not wasted. Record the minutes and the actions and ensure that the stakeholders are aware and have the additional information they need to act upon the decisions. And finally, as business environments, leadership and performance objectives change, information requirements also change over time. Hence, we need to periodically review the reporting process and the reports themselves and put them through a continuous improvement cycle to ensure that they remain effective and useful.

Does this sound like a lot of work? It is but if you get this right, you have a unique opportunity to expand your influence while supporting the goals of the management because you are helping transform data into insights – critical to creating value and ultimately, increasing the competitive advantage for the organization.

So do you still think business reporting is a boring and non value-adding activity? What unique perspective do you put into your reports ? What do you expect from the reports that your team generates for you? I would love to hear back and learn for you?

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