Wednesday, September 24, 2014

Beating Cadence, The "Drumbeat" of Performance Management

Tempted as I am to wax nostalgically of my days in The College of Wooster’s Fighting Scot’s Marching Band (yes, fully attired in a Macleod tartan Kilt!), this essay is about the tempo or “cadence” required to make performance management come alive. Let’s start with a definition:

Cadence: Noun,

a: a rhythmic sequence or flow of sounds in language
B: the beat, time, or measure of rhythmical motion or activity

It’s this idea of “rhythmical motion or activity” that I want to focus on today. Over my career, I have had the chance to lead teams and manage businesses of various makeups and sizes. Early on I realized that my natural orientation was NOT to build processes or disciplines to aid me and my team in managing the business, but to move from issue and opportunity as they arose. Oh the naiveté of youth! This “reactive” approach was a mess, often leading from one crisis moment to another, creating a culture of “knee jerk” responsiveness versus one of “planful” discipline. I knew I needed to make a big change, quickly!

What became clear to me was the need to not only identify the key data points and sources, but how often to measure, track and report those key metrics. I won’t go deeply today into the concept of a “core score,” but it is vital in every business to identify the few truly vital pieces of data/metrics for your business, i.e. the “core score/s”, and then be maniacal in your management focus of those metrics. In a world of wildly expanding data, this process of focus and choice of a FEW metrics is difficult and key. My focus today is more on the tempo or cadence of that management “dance.”

After my early false starts in this area, I realized that I NEEDED a regular disciplined cadence to help me successfully manage increasingly complex and sizeable businesses. Over the years I have come to an approach that has allowed me to build a regular cadence across the year. In my most recent role, this cadence has come to fruition over the past 4+ years with great results. Let me work my way by time period:

Daily: It’s important to be careful in this area. Businesses move very dynamically and you could theoretically track performance on an hourly or minute by minute basis. A major retailer tracks their scanner data in 15 minute increments, and it is possible to download store by store data in those 15 minute increments. Fascinating, yes; meaningful, I am not so sure! For me, I like a daily sales report to start every day. I have had the pleasure to work for a California based company over the past few years and we worked out systems to report out daily sales trends by 6am pacific time every morning. Tracking our key eight product categories, we would see trends versus plan and versus year ago. Keeping in mind the vagaries that might arise daily, unique weather events, shifting holiday timing, strange year ago cycles, etc., this daily “wakeup call” allowed me a very close, daily feel for the business. While this daily sales report is widely distributed, I used it personally, not for a team based performance management discussion.

Weekly: I deeply believe in keeping a close eye, or finger, on a business. Things happen so quickly that if you don’t pay attention, a business trend can get away from you. A few months into my last assignment, business trends were very challenging and I instituted a weekly, every Tuesday WebEx/call for my entire organization. I wanted/needed everyone to focus on the immediate issues and opportunities at hand, and a weekly “all hands” call was my approach. I chose every Tuesday to allow the past week’s results to get tabulated, a few customer and product specific reports to be run, and to allow me to digest the landscape and work to guide action. Once I started that weekly call, I never stopped, holding over 200 “Tuesday calls” over the past four years. If I was on vacation, I had another leader fill-in. I lead them from airports, customer lobbies, train stations, parking lots, etc. It didn’t matter the circumstances, the “cadence” continued.

Monthly: As we closed every month, we reviewed a deeper set of metrics, diving into the entire p&l, decomposing our trends to identify action areas for immediate or longer term action. We convened a relatively small, senior team, for this review. Identifying a ½ day monthly to be devoted to this important work. Unlike the “Tuesday call” described above, we learned that this meeting needed to happen in person with all the senior staff in attendance live. We tried “calling in” at first but soon realized that we needed to really dive into the monthly metrics deeply, and discuss them aggressively, and at least our team quickly realized the need for us all to be in the room together. Monthly performance was key, and I would share the results on the next “Tuesday Call” to the broader team and work to focus our efforts on the challenges and opportunities at hand. Additionally we received a variety of syndicated reports on our market based performance relative to competition. These highly awaited “market share reports” were widely and broadly circulated, and then we would do a detailed review in the next weekly “Tuesday Call.”

Quarterly: While obviously a collection of the three prior months, quarterly closes were more than just a financial exercise. We used the quarterly “cadence” to update our team deeply on performance versus plan, since we have been on a quarterly bonus system for a number of years. Realizing that successful months make up successful quarters, and successful quarters make up successful years may seem beyond simple, but breaking a business down into “bite sized” chunks is a vital element of performance management. (read more about “bite sized chunks” in a previous essay, “Aunt Lorraine’s Law.”)

Annual: Now this is big, annual plans and annual performance management is central to success. Annual performance is the real report card of business! Finishing every year NOT ONLY tracking performance to pay bonus (if earned!), but to measure our progress against long term goals AND to gather key learnings/insights on consumer/shopper/category/competitive dynamics is vital. You NEVER miss the annual plan timing, NEVER! You are NEVER too busy to dive into the results to understand performance and to gain key learnings. I have usually tried to time annual or bi-annual sales/marketing meetings to correspond with the fiscal year end so the results and the learnings can be key elements of those experiences.

This little review of performance management cadence is clearly my approach, but one that has served me well across my career and especially over the past few years. Look deeply into your own business and its unique dynamics. You may have different tempos to consider, maybe thinking about unique seasons, or key release dates that may not fit neatly into my “daily/weekly/monthly/quarterly/annual” model. Find the cadence that works for you and your unique situation but stay on track. Just like my 200+ “Tuesday Calls,” don’t be inconsistent with the drumbeat of your cadence. I strongly recommend that you stay on track, stay on tempo, and “beat cadence” for your business; I am confident that once you find your “right” rhythm, you will be pleased with the results and your organization will actually “count on” the consistency of your approach.

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