IS Survival Guide: IT's Balancing Act

SAN MATEO (04/10/2000) - "When you say that you agree to a thing in principle, you mean that you have not the slightest intention of carrying it out."

-- Otto von Bismarck

A RECENT DSL ad touts the wonders of 256K Internet access. Web sites "fly by" -- instead of staying on the screen, I guess. "Talk on the phone while you're online," -- Miss Manners wouldn't approve. And, it's "nine times faster than a 28.8 modem" -- as if 28.8Kbps modems still set the standard. And the name of this wondrous service? MegaBit.

Yes, MegaBit apparently means 0.256Mbps. I imagine the same committee (no one person can create stupidity of this caliber) will probably relabel T1 service as "GigaBit -- the connection that runs 30 times faster than a 56K modem!"

Innumeracy (the numerical equivalent of illiteracy as described in John Allen Paulo's eponymous book) runs rampant and, despite heavy emphasis of finance and accounting in MBA programs, bad numbers are common in the executive suite too.

Numerical problems found at the "C-level" (CEO, CFO, COO) aren't as egregious as an unbalanced checkbook. They're more like driving a car with a dashboard that has only a speedometer and an odometer.

We're continuing with last week's subject: creation of an executive dashboard.

The best-known method is the "balanced scorecard," developed by Robert S.

Kaplan and David P. Norton (The Balanced Scorecard, Harvard Business School Publishing, 1996). Their balanced scorecard methodology turns a business' strategic objectives into specific measures in four key dimensions: financial, customer, process, and "learning and growth."

The balanced scorecard methodology itself is fine. As with all methodologies, though, it tempts people to replace artistry with painting by numbers. Many CEOs, pressed for time and impatient with the difficulty of achieving executive consensus, will bypass the hard work of developing custom measures and instead adopt someone else's so as to "not reinvent the wheel."

At the risk of straining automotive metaphors to their limits, I'll respectfully point out that when you're in the wheel business, you'd better reinvent the wheel ... often. Because balanced scorecard measures are driven by (sorry) your company's strategic objectives, you have to reinvent the wheel, or the whole exercise is pointless. No, it's worse than pointless; having no measures simply means you're ignorant, but having the wrong measures means you're misinformed.

Time constraints in the executive suite are real, though, and executive consensus really is hard to achieve. And because as CIO your name is inextricably linked to the notion that huge investments in "information" will somehow lead to better decision-making, guess who's going to get blamed when the balanced scorecard doesn't deliver its promised results?

Here's how you can turn this to your advantage: Offer to facilitate the process. You're the logical candidate because, first, chances are good that IS employs the best mathematicians in the company. Poorly constructed formulas can wreck the best business metrics, and forcing executives to spend time fine-tuning equations will kill a project such as this.

Second, the only business measures that work are those collected and reported automatically. We're long past the age of manual data collection and tabulation. It will be IS that turns production databases and analytical data warehouses or marts into the dashboard measures once developed.

Third, you run the intranet anyway, and that's where the dashboard will go.

And finally, in modern companies, IS should be about the process of translating business vision to operational reality. Balanced scorecard implementations are just one more example.

You own everything except the consensus itself, and by making that happen, you'll elevate your own status in the bargain.

What's not to like?

Have a formula for this? Send an e-mail to Bob_Lewis@compuserve.com. Bob Lewis is a Minneapolis-based consultant with Perot Systems Corp.

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