Even in times of stability, organizations are dealing with lots of friction in managing their organizations. Compound that base friction with organizational change, competitive efforts, outside influences, innovation, and internal initiatives, it is not surprising that it becomes super-heated. It’s not hard to imagine the heat from the friction causing damage to essential efforts. The damage might be more effort than necessary, thereby costing the organization time, money, and grief. The damage could also be that fundamental change will be much harder once you add the human resistance to the party. Commonly, organizations have a hard time linking strategy to execution. Some efforts fail even to complete, while others end up less optimal. In other words, Organizational Performance Management (OPM) is hard and even harder while trying to change reactively or proactively.
Also,
it is challenging to collate feedback, comments, and actions from different
management stakeholders against the relevant elements in these reports.
Managers also need to collaborate while finding solutions and making
recommendations, and in the current remote work scenario, collaboration against
reports is challenging. Without adequate insights, decisions are not optimal,
and this lack of overview for the management to base their decisions on can
cause a delay in the time taken to make and execute decisions.
As
per a 2019 McKinsey Survey, 57% of C-level executives say the reporting process
is inefficient, and 61 percent say most of their decision-making time is used
ineffectively. Ineffective decisions have significant implications for company
productivity. The survey found that for managers at an average Fortune 500
company, this could translate into more than 530,000 days of lost working time
and roughly $250 million of wasted labor costs per year (McKinsey & Co.,
2019).
The
critical problem is that Business Managers need a way to gain insight into
issues and challenges they face quickly. These may relate to the external
landscape, such as products, competition, market changes, sources of raw
materials, storms, logistical problems, etc., or company strategy, business
processes, risks, opportunities, etc. Managers relate this insight to company
metrics and use them to deliver focused decisions saving time and money. A
Harvard Business Article as far back as 2007 declared that everyday decisions
create or destroy your company's strategy (Bower & Gilbert, 2007). Against
this backdrop, it is critical to enable management decisions through an
enhanced reporting process.
What
are Key Steps Essential to Remove or Eliminate Friction?
Scope the Management Challenge
In their endeavor to achieve the goals of frictionless management,
organizations follow an array of Management Practices.
·
Strategy Management based on the Balanced Scorecard methodology.
·
Performance Management to measure a multitude of performance
areas, including Departmental Performance.
·
Process Management to effectively execute strategy through
efficient, strategy-aligned processes.
·
Program and Project Management to successfully deploy Initiatives,
Programs, and Projects linked to Strategy.
·
Risk and Opportunity Management to be better prepared for events
that have a negative or positive effect on Strategy.
·
Quality Management to strengthen the Organization's competitive
position.
The multitude of Management Practices addressing different
organizational areas and the growing number of tools leads to the complex
scenario of departmental silos while implementing these Frameworks. Also, each
section or department may invest in multiple tools. It is vital to integrate
the efforts that organizations have implemented, are implementing, or plan to
implement.
Focus on Process and Process Automation
The
efforts to create an integrated management reporting process will pay big
dividends. Still, they must be taken into how this process is constructed to
bring together multiple data sources, normalize meanings, visualize results,
and deal with change. Many of these reporting process tasks are ripe for
automation, integration, and aggregation. Finding one tool, like a management
cockpit tool and associated methodology, is the challenge here. Since the whole
process is dependent on the weakest and slowest sub-process, it is essential to
get each step to a similar speed and accuracy level. Laying the base properly
here has a significant downstream effect on Insights, decisions, and
actions.
Empower Decision Making and Risk Management
Once
the base for "Insights First" is established, then assisting
decisions and the risks associated with them becomes possible. By leveraging
predictive algorithms to test out decisions and their possible outcomes, it
empowers management to make better decisions and kick off more focused projects
to improve the reporting cycle and the organization's underlying processes,
systems, and resources in the long run. These future improvements come in
tandem with making improvements at the operational and tactical levels
immediately by taking correct and decisive actions based on existing and
emerging conditions.
Leverage Improvements for Innovation
Once
the improvements are underway and delivering for an organization, they can be
leveraged to treat customers better, get better bottom-line results and give an
organization an advantage over its competitors. New markets, products, and new
business models can emerge by leveraging improvement results in new ways.
Optimize for Executing Process Correctly
The
organizational processes need to be continually inspected for improvement
through the reporting processes. Also, advances in data and data sources will
need constant attention. This continuous optimization mindset should also be
aimed at projects completed for improvements with proper audits and appropriate
adjustments.
Net;
Net:
While
attaining a frictionless organization is a lofty goal, many would settle to have
less friction than what we have today. The friction quotient is somewhat out of
control and is desperate for attention these days. There are significant
savings to be had by approaching this as a management cockpit. Something many
IT professionals have been talking about it since 2003, though it was a term
popularized by NASA about 50 years ago. It is time to turn the talk into
action. More to come on management cockpits here in 2021.
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