Monday, March 15, 2021

The Key Steps to Frictionless Management

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.

Where are Some Common Friction Points?

 Organizations have progressed by adding ERP, CRM, and more internal processes/applications, thus creating more moving parts to manage separately or in combination. While business intelligence (BI) has enabled better and more detailed analysis of these systems, it is costly to aggregate and collect data from these multiple sources to create a more holistic view making management reporting and corporate performance more complicated and time-consuming than necessary. The arduous task of aggregating from many Excel spreadsheets and many PowerPoint slides creates so much friction. It is a cumbersome, time-consuming, and error-prone set of steps.


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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