Guys who do strategy don’t drive trucks
Writing by Jorgen on Tuesday, 16 of October , 2007 at 11:24 am
Kaplan & Me [Click to open]
Yesterday was the launch of Microsoft Performance Point Server in the Netherlands. Keynote speaker was Robert Kaplan (Business Balanced Score Card, Strategy Maps). In the afternoon we did a workshop with Kaplan and some of our clients. This gave me the opportunity to ask him some BI questions.
The first question was what role BI can play for the BSC? He answered that BI is very important. Not only for the reporting framework but especially when it comes down to analytics. (See also: http://www.randomhouse.com/bantamdell/supercrunchers/ and http://www.amazon.com/Competing-Analytics-New-Science-Winning/dp/1422103323). According to Kaplan analytics are crucial during the review of the strategy. Domain experts can crunch the numbers to come up with new and perhaps more effective measures to drive performance. In his opinion all organizations should have an analytics group.
I also asked him what he thinks about two trends in BI: real time (or 2.0) and performance networks or ecosystem BI (sharing your information with your stakeholders). Kaplan mentioned that real time BI often is only considered for operational dashboards. However if these operational dashboards are alligned with the strategy they can also be your early warning system for more strategic decisions.
He also strongly believes in sharing information to improve performance, but he underlined that a feedback loop is crucial for this. This must start within your own company, allowing your own employees to react (for example by e-mail) if they find deviations. He gave an example of a large petrol company. Their strategy was to improve the convenience for the customer. The truck drivers, delivering gas to the stations, were very sceptical: “guys who do strategy don’t drive trucks”. But after a while they started calling the head office informing them about rude personel, unclean rest rooms and so on. Sharing the strategy was enough to start a change even before an improvement program was set up.
In summary:
1. Analytics are crucial for reviewing strategy (regression is cool again).
2. Real time BI can be an early warning system for strategic decision making.
3. Information sharing implies a feedback loop.
4. Communicating about strategy is almost as important as excuting the strategy.
Category: BI Thoughts, Business Intelligence consulting, Business Intelligence solution, Business Intelligence strategy, Business Intelligence system, Business Intelligence tools
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Comment by Bas van Raaij
Made Tuesday, 16 of October , 2007 at 1:31 pm
Great confirmation of our common vision, isn’t it? 
One remark on my part: Realtime BI can be an early warning system, but it is still reactive. Did Kaplan say something about the proactive part?
Comment by admin
Made Tuesday, 16 of October , 2007 at 2:17 pm
I have argued with him that the BSC is basicly a control system (reactive) instead of being proactive. He said that BI can help (with analytics and what if scenarios) to iteratively build on the strategy making it more pro-active. Another suggestion was to take your company strategy (customer intimacy, product innovation, operational excellence) and look at your current BSC and only look for those measures that are predictive for this. Than take this measures and rank them accordingly (priority). This way you can improve your scorecard and make it more proactive. Kaplan has had some criticism about the BSC being to reactive (control). Kaplan says there is a correlation between the quadrants (better people leads to a better process, which makes the clients happy and they spend more money). Other argues that there is no correlation but a coherence. If you want to know more, read the article: the balance of the balanced scorecard - a critical analysis of some of its assumption by Hanne Norreklit.
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