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August 29, 2006
Information Democracy In Action
Last week I wrote about the Quality Cards of the Dutch School Inspection Board. In the meantime I had the most wonderful conversation with the principal of the school. The conversation quickly revealed some deep insights on transparency, control, leadership and culture.
Master Jan (Dutch children refer to male teachers as master) is the principal of a primary school with 450 pupils, between the ages of 4 and 12. The overall foundation, to which the school belongs has a budget of around 4 million Euro.
Schools operate in a constantly changing and dynamic market, and feel competitive pressures. Only 30% of parents put their children in a school based on the religious or philosophical background of the school. 70% are more pragmatic and actively compare schools to find the best one for their children. Having a bad reputation has almost immediate consequences the next school year, as the budget of the schools (in principle schools of all denomination are financed by the state) is based on the amount of pupils. Less budget will quickly have staffing consequences.
Proactive transparency
Over the years, parents have become very critical. It is not unusual to inquire about how the school spends its budget responsibly and wisely. Often, parents looking for a school visit the school with a copy of the quality card in their hands. At the same time, the School Inspection Board is becoming more critical and hands-on. In the last 6 years Master Jans school has received 4 audits.
These audits were already common in high schools, but as of 2000 also became standard in primary schools. In 1995 Master Jan realized audits would become an important factor for his school, so decided to proactively implement them beforehand. He is convinced the excellent results of the school have to do with embracing transparency through an early implementation.
Apart from the School Inspection Board quality card, the school has its own quality card, much like the balanced scorecard we know in corporate environments. It just doesnt use the financial perspective as the bottom line, but describes the results of the school in terms of pupils gaining certain credentials, just as customers may describe their results based on benefits gained.
The quality cards have had a huge impact on the four schools in the foundation. It forces the board and the principals to explicitly evaluate, on an annual basis. It has led to a strategic plan and a different level of professionalism. Teachers see the value of the quality cards and think about their personal contribution, such as putting together a personal development plan. Together with an external expert, the school principals also audit each other, to make sure they are at all times prepared for an external audit and the external quality card.
Control
The regulatory environment of schools is constantly changing. Recently the finance system changed. Instead of a budget per line item, since 2006 schools receive a lump sum for which they are responsible. The amount is based on the number of pupils.
Like the XBRL standard in the business world, the Dutch ministry has designed a standard for submitting financial results. The school is very positive about embracing this standard. Given the lump sum structure, it is interesting to compare spending with the practices of other schools, a great opportunity for benchmarking. As a consequence the school has actively adapted its own quality card to the performance indicators the ministry uses. Comparing performance indicators is better than trying to distinguish with different metrics.
Leadership
Master Jan is a typical example of Jim Collins Level 5 Leadership, combining a clear vision and a high level of ambition, with great humility. When establishing the school, his style was rather directive, but it has become collaborative over the years. He uses the term colleagues” when he speaks about his staff of 35 people. He has had some management training but also has had the good fortune of working for the same foundation for many years, during which he gained the experience he needed to become a principal.
The school also demonstrates strong ambition. The results of the school and its employees must be excellent and the school will not rest before it achieves excellence on every level. The 80/20 rule is simply not acceptable -- good is not good enough. And it pays off, given the quality card I showed in my previous post on the subject, the school is doing very well!
Culture
As a principal Master Jan is as much a product of the culture of the foundation as he is an influence on the culture of his school. The school has a strong Protestant Christian identity. The values are clear for every teacher: Strive for Excellence, Be Soulful, Behave Respectfully, Treat every person as a unique human being, Raise children to become independent and responsible.
The management culture is one of a shared common purpose, and a long history of four principals who trust each other. With the budget being granted to the foundation and then allocated to the four different schools, this level of trust is needed to avoid budget disagreements. When facing budget dilemmas, the school principals turn to their values in making a decisions about where to allocate financial reserves, or about reallocating budget altogether. Because just good is just not good enough.
What we can learn
Of course, there are differences between primary schools and business life. The competition between schools is not usually cut-throat, and there are no large variable salaries. Still, we should not dismiss the practices emerging from Master Jans school.
Schools today are modern organizations. The principal has a management contract and hard targets. There is competition, the market is quickly changing as is the regulatory environment. The lesson we can learn is that embracing transparency leads to better results rather than mere compliance. Embracing transparency creates a more professional organization, and leads to a competitive advantage where you can be proud and relaxed about sharing your results. This is clearly a lesson most commercial organizations can benefit from.
And it also teaches us something else: if you keep your eyes open, examples of greatness can be found around the corner. I thank Master Jan for taking care of my children.
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Posted by Frank Buytenkijk at 1:05 PM | Comments (0)
August 23, 2006
BI = Blissful Ignorance
Just a small post. Last weekend we went driving with my new car. Taking it for a spin, enjoy the typical smell a new car has, trying to get to know how it behaves on the road, you know -- the usual.
I had to smile about myself. As a measurement professional, I should practice what I preach. Live up to my own standards... I didnt... one of the first things I did when I learned how to control the board computer is switch off the indication on the screen that tells you the average fuel consumption and that merciless countdown how much kilometers worth of gas I still have. I dont want to know...
Maybe BI sometimes doesnt stand for Business Intelligence, but Blissful Ignorance.
Is there a difference between personal and corporate behavior? And if so, should there be?
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Posted by Frank Buytenkijk at 3:10 PM | Comments (0)
August 21, 2006
Taking Information Democracy Literally
Information Democracy is the trend for business intelligence. Information, in many industries, has become the differentiating factor in doing business. The price or quality of the product or service simply doesnt make the difference anymore.
In openly sharing information, we can learn something from the public accountability governments have in democratic societies. And government is adopting BI at great speed, raising the bar for the corporate world. Over the years I have found numerous examples, but one of the coolest I found recently.
In my country, The Netherlands, the School Inspection Board (Onderwijsinspectie) visits every school to assess the quality of the staff, the methods used, academic results, student activism and also softer factors such as atmosphere. This leads to a written report, but also to a scorecard, which the inspection board calls Quality Card (kwaliteitskaart). So, not a report card for the kids, but for the school! And this Quality Card is public information on the inspection boards website (www.onderwijsinspectie.nl). Here is the Quality Card of the school that my children attend:
The school even has a download facility for the report on its own website.
You may argue that the business world is different -- a dog eat dog world. But even in government, at least at the microlevel, there sure is competition. If the quality card of one school shows bad results, nothing stops the parents from putting their kids into another school (and in such a small country, there is always another school nearby). This will have budgetary consequences, and ultimately impacts the number of teachers a school can employ. The principal of the school knows his performance is public information and is used to it.
Phew, happy my children attend a good school, no red traffic lights in the Quality Card. Otherwise I would have had to put them in a different school. By the way, making use of this forum, I would like to warmly recommend this school. You see? It works! Information has become a differentiator.
Have you seen any good examples of information democracy? In government or in business? Let me know ...
frank
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Posted by Frank Buytenkijk at 12:45 PM | Comments (0)
August 17, 2006
Nothing New, But Still Scary
Yesterday we did a webinar with Business Finance Magazine, on the topic of Business Performance Management, with a few hundred people. As part of the program, we did a little survey. One of the questions was what technologies the people on the call were using. Youd expect a bit of a bias because the topic of the webinar speaks mostly to the imagination of the people whod know about the subject enough to care.
Yet still, 70% of people responded they are using Excel. I have seen statistics like this for a number of years now, but I keep thinking Oh boy.
There is nothing wrong with using Excel as a front-end to more formal system, but Excel as the application, there are serious issues with that.
I recall a newspaper article, here in Europe, from a few months ago. One publicly traded company published its numbers and a few hours later sent out a correction. There was no material differences and all trends were pointing in the same direction, but one employee did put a few numbers in the wrong row or wrong column of the spreadsheet that was used for that report. Immediately the stock market reacted negatively. A spokesperson of the company stated that it was an honest mistake and that the employee had not been disciplined. That was good to hear, but I cant understand how senior management could allow the use of a spreadsheet in such a crucial process.
Actually, I can understand. People like their spreadsheets. It gives the feeling or perception of flexibility. And all the manual work is hidden, these costs are much less visible as implementing and running a more formal system. But these are political reasons.
What I would like to know, dear reader, what solid business reasons are there to use spreadsheets in crucial performance management processes?
frank
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Posted by Frank Buytenkijk at 4:44 PM | Comments (0)
From the Ivory Tower
In Hyperions Office of Strategy, we contribute to Hyperions direction for the coming years. We look at the market, the trends in and outside the customer base, the Hyperion core capabilities and sketch various paths forward. Strategy is a funny thing. Everyone has a strategy, to some degree, but it seems hard to articulate at times.
The best way of looking at strategy, at least in my opinion, comes from Henry Mintzberg. In his excellent book Strategy Safari, he defines strategy not as an exercise done in the ivory tower, before tossing it over the wall to operations, but as a continuous process. We set out a high-level goal, more or less define the broad steps we would like to take, our letter of intent if you will, and fill in the details as we go. While we travel towards our goal, we will see the circumstances change and we need to take a shortcut or a detour. Organizations that take this view on strategy, are more adaptive and as a result, more agile. The fact we can adapt, instead of being hardwired towards our goal, helps us to reach our goals earlier. But equally important, this take on strategy means that we learn more. Through continuous feedback, we can reapply new insights in our next strategic increment.
Contrast this to the grand plan we all need to stick to. If the situation changes, tough luck, we cant. The program is in place. And only in the next big iteration of updating our strategy, every few years, can we apply those lessons learnt in the meantime.
In a sense, business performance management is the driver for strategy formulation. Lets explore that a little by talking about an automobile driver in a literal way. Continuous feedback through dashboards tells us about our mileage, the estimated time of arrival, our fuel efficiency, the temperature outside and the road condition. It tells us how weve been doing so far and how far we still need to go. Our annual budget has been complemented or even replaced by a rolling forecast. You can compare this to the navigation system, that doesnt only show us the newest roads and bridges, but actively tells us how to avoid the traffic jam. It helps us to adapt to changes in the traffic. Once in a while we consolidate and report. We bring the car to the shop, they hook it up to the system, check emissions, kick the tires, and we get a permit to drive another year with the car. On to the next journey.
Gone are the days of monster-size strategy sessions, run by the strategic planning departments. Welcome to the days of the information democracy, where strategy is consumerized, like so many other things. What we need is a framework, a big picture, a dream of where to go. With that, we can sit back and enjoy the landscape.
Hyperions office of strategy is no ivory tower as well. Most of our time we spend on the road. Visiting you. Discussing whats on your plate, and on ours, for that matter. Wed love to speak to you as well. Please let us know and react to this blog.
frank
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Posted by Frank Buytenkijk at 10:11 AM | Comments (0)
August 11, 2006
Information Democracy
Check out Howard Dresners new thought leader perspective on Information Democracy. He describes the goal for BPM and BI. Information democracy is about making sure all constituents inside and outside an organization have the right information at the right time and are able to align in the right direction. And, it needs to be actionable. In this piece, there is a call for action, starting a BPM Revolution. So if there is a revolution, where should we focus?
In order to be successful with the revolution and achieve information democracy, we need to be ready in our use of technology, our processes and in our culture. Lets start with the easiest one: technology. The idea of broad BI implementations, beyond the usual suspects of senior and middle management, is not new at all. Its been discussed since the mid 1990s. Unfortunately the technologies in those days were simply not scalable. They couldnt handle the amount of users and the size of data. The first attempts to reach a state of information democracy as we would define it now date back to around 1999, when the first web-interfaces entered the BI world. In most cases, sadly, it didnt work. The user interfaces may have been browser-based, but the underlying technologies did not scale and the user functionality was quite inferior compared to the Windows version. It has taken some 4 to 5 years, but the last 2 years we have come a long way. Reporting tools have merged with query tools, creating a flexible and scalable environment, and the use of dhtml and java scripting have greatly enhanced the web user interfaces. Today, technology is not the issue anymore.
Next to technology, the quality of our business processes is crucial to information democracy. In order to embrace the concept, you need to have the confidence that the insights you are sharing are first of all reliable, and second of all, you share the information with confidence and pride. If possible, youd like to show you are in control and perform with confidence. Although we may collectively not be there, the signs are hopeful. As draconian many of the compliance regulations are, and as much as the compliance projects are and have been a weight on our shoulders, it does help us to be in control. It makes information democracy easier, as it supports the old adage of be good and show it!.
But lastly, there is the topic of culture. Few would disagree that information is an asset that needs to be managed, like we manage capital, labor, raw materials, and production facilities. But lets put that belief to the test. As much as we say information is an asset, do we behave that way? Heres a set of question I often ask, when dealing with the subject: if you steal money or goods from the company, and you are caught, you will be ............ fired. Right? So if you withhold information from your colleagues so that you keep control over it yourself, benefiting from it alone, you will be ........... promoted! Information still equals power.
So, in reaching a state of information democracy, it is culture we need to focus on most. To end this post on a positive note: the technologies are there to help you, but success with information democracy is totally in your own hands!
frank
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Posted by Frank Buytenkijk at 9:44 AM | Comments (0)
