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The keystone of success of managing performance through information is the discipline & consistency. Discipline is required to adhere to the process day by day & month on month. Consistency is required in terms of the Measures, standards, our approach in decision making and implementing the same.
The process is actually a no-brainer. However, like many other no-brainers, it is difficult to follow religiously (All of us know that 20 minute aerobics thrice a week will keep our heart in shape, but how many of us do it, apart from few spurts driven by guilt pangs).
Lets take a look at the typical process. We are assuming an enterprise wide monthly scorecard review.
Start Bottom-up:
It is the individual units and functions, which should feed into the enterprise scorecard. In an ideal scenario, enterprise scorecards are linked & aligned with individual units. Therefore it is the individual unit's scorecards, which will be prepared first to feed the data as well as the commentary to higher level scorecards.
For example 'Bank Account Logging' unit and 'New Account Risk Processing' unit scorecard will feed into 'New Account Processing Unit' which will feed into 'Operations Unit'.
Similarly 'Credit Card Sales' unit and 'home Loan Sales' unit will feed into 'Assets Sales' unit, which will feed into ' Retail Finance Sales' unit.
At the end both 'Operations' unit and 'retail finance sales' unit feeds into 'Enterprise' scorecard.
The bottom-up approach ensures reconciliation, across the levels as well as allows the scorecard drill down from enterprise scorecard to retail scorecard.
Therefore, as soon as the month is mover, the individual units should prepare their scorecards (along with all the 'Scorecard Imperatives'). This does not take much time as there are more numbers and less analysis & commentary. As we go to higher levels the analysis & commentary take bigger proportion.
As the individual units have prepared their scorecards, the higher level scorecards can still be made in terms of data generation. Typically all scorecards at all levels are generated in parallel in terms of 'routine' data and presentation (graph, charts). It’s the commentary and 'non-routine' analysis, the future targets, risk assessments which are incorporated, post looking at the reporting units scorecards.
Spend time on Scorecard analysis
Most of the scorecards state the obvious. However, it’s the in-depth analysis, which makes a difference.
For example, a scorecard can state that 3% HNI accounts have attrited in last month. A good analyst/business manager would ask 'many times why' to come to the root-cause. This may lead to the following:
- Most of the HNI customers are attriting in 'west zone'.
- Most of the customer who have attrited in west zone completed their first anniversary.
- West Zone had run a campaign last year of first year waiver of annual fee.
- Customers are attriting because they don’t want to pay annual fee for the next year.
- Competition has launched similar campaign this year to juice on this attrition. There are many fund transfer requests.
- As more customers are expected to complete their anniversary over coming two months, the same level of attrition trend is expected.
That’s why good data analysis and mining capabilities are must for an organization, so that it is able to spend greater amount of time on analysis. The only way one can provide good scorecard at the right time, when more than 90% of the time is spent on analysis (instead of generation).
Functional Level Scorecard review Sessions
Functional Level Scorecard review session are done after the functional scorecard is mostly ready and now it is time for the functional team (head of the function and his/her direct reports) and representative of key stakeholder functions.
For example- In the operations scorecard review session, the head of operations, head of new business unit, head of servicing unit etc. along with representative from sales, finance and risk being present. Many of the root-causes as well as solutions to the problems of Operations are coming from sales (say) and finance (say). Therefore Ops scorecard is not complete in terms of analysis, commentary help items etc till inputs from other stakeholders is not available. A wider presence also ensures that everyone has same view of what is good, bad and ugly. Its not an uncommon sight in boardrooms where Ops is presenting its set of achievements, while head of sales is counting the list of grievances.
Enterprise Scorecard Review
The whole management team and key personnel will meet, and review the enterprise scorecard. If the process is followed so far, every one should come to synch pretty quickly on the status. The rest of the time is spent on
- Re-validating the root-cause analysis on the exceptions.
- Look at the new opportunities and threats.
- Re-validate the forecasts and the risks in the future.
- Discuss any change required in strategy and strategic plan.
- Discuss any new initiatives required.
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