If You Build It, Will They Come?
- 06 October, 2004 10:36
KPI digital dashboards might just be the next priority for CIOs. But how many CEOs really want all that real-time data anyway?
At Microsoft's CEO summit in May, the software giant's own CEO, Steve Ballmer, spoke passionately about the importance of having "digital dashboards": real-time desktop displays of key performance indicators (KPIs) that show critical business ratios such as profit per sales employee per week, customer satisfaction in dispute resolution and the status of outstanding issues with major suppliers. In other words, indicators that CEOs deem critical to running the business.
CEOs who really want to take advantage of digital technologies, Ballmer declared, should have their IT folks build them KPI dashboards, empowering them to monitor what matters. On a more personal note, Ballmer observed, KPI tracking has been essential to his transition to chief executive of the world's most profitable software company. For example, Ballmer's KPIs now focus as much on internal "talent tracking" as sales.
But Microsoft's CEO was apparently not preaching to the converted. The reception to KPI executive dashboards could best be described more as polite curiosity than genuine interest. I can't say I'm surprised. (A disclaimer: I consult for Microsoft, although not on KPI issues.)
Executives at all levels seem to have decidedly mixed feelings about the benefits of digitized KPIs. Several years ago, one of my more gifted IT geek friends went to his boss — a successful restaurateur — and offered to custom-build a digital dashboard so that he could track how his business was doing. I'm told the man thought long and hard about the offer before declining. "That's not how I want to run my business," he reportedly said. "I don't want to lose the feel of my business in all that data."
In my own advisory work, I was unsuccessful in persuading a merchandising executive to gain real-time access to the status of product coming through her store's global supply chain: "Michael, I need to sell what we have now rather than get distracted by what we're going to get in five weeks," she said.
These vignettes aren't atypical. Please note: The issue in both examples has nothing to do with technical challenges and everything to do with the client's own perceived needs. Clients determine what, if any, key performance indicators they'll use and - just as importantly - how they want those KPIs collected, integrated and displayed.
Are these clients trying to wriggle out of the accountability that these KPIs might impose? Do they fear they'll overwhelm themselves with data? Would they rather have their boss — or their boss's boss — define their KPIs for them? Who knows? To amend Freud, what do clients really want?
This represents an implementation challenge of the highest order. Ballmer's KPI dashboard challenge is an important exercise for every CIO to consider: Could you — should you — offer to custom-build a real-time KPI digital dashboard for your CEO? What would his reaction be to your offer? How many KPIs would he select? How difficult would it be for your team to give the CEO what he said he needed? Could you do it off your existing infrastructure? Or would you need new apps, new sensors and new interconnects between databases to pull it off? Could you give him 80 percent of what he wanted in under 90 days? 120 days? A year? Do you think he's the sort of CEO who would constantly be tinkering with his KPIs to chase the latest business fad? Or would his KPIs look startlingly similar to the sort of KPIs your CFO would use?
Which begs the obvious question: Could you — should you — offer to custom-build real-time KPI digital dashboards for every C-level executive in your firm? Would they be thrilled, indifferent to, or insulted by your offer? How many of them already have — or use — the equivalent of digitized KPIs?
The Accountability Trap
There are differences between data, information and key performance indicators that go far beyond semantics. I could glibly assert that CIOs should have a Chief KPI Officer to handle the challenge of servicing C-level KPIs (and just for kicks, custom-build executive compensation KPIs for the independent directors on the board), but that would be too easy. The serious point is whether the CEO even wants to have the CIO oversee construction of a KPI infrastructure that creates new genres of executive accountability. Would C-level executives embrace such an initiative or seek to subvert IT at every turn? Would their direct reports want KPI-driven apps to govern their operations? Would they think of KPIs as meaningful business goals or potentially punitive corporate constraints? After all, if profit margins are the dominant KPI, that can discourage efforts to win new business.
There's a simple reason for this welter of questions: All organizations have two cultures of implementation. The first - and most obvious - is the culture that actually does the hard technical work of gathering requirements, building prototypes, polishing production systems, and then rolling out and supporting its technology.
The other is the implementation culture that drives CIOs to the brink of insanity and despair: the implementation culture of the client. It's the gap between what clients say they want and what they actually need, between how clients say they run their business and how they actually do. It's the chasm between what clients say they want to accomplish and what they're prepared to invest to accomplish it. There's nothing novel or shocking about these gaps and chasms. However, successful CIOs know that all implementations are essentially compromises, negotiations and accommodations between these two cultures.
Savvy CIOs know they cannot afford to allow the pathologies of either culture to afflict the other. Nothing annihilates credibility faster than a technical implementation culture whose "stretch goals" lead to over promising and under delivering. Similarly, nothing promotes technical cynicism more quickly than a client implementation culture that insists on technical excellence for mediocre business processes. In other words, CIOs need to always be on the lookout for media and methodologies to better align these two cultures.
Then again, I can't help but recall the "Executive Decision Support System" movement of the late 70s and early 80s that generated great academic enthusiasm but yawns from operating executives. Perhaps this era of IT-enabled regulatory compliance, shareholder activism and intensifying demands for executive accountability will prove more inviting to KPI champions such as Ballmer.
That said, you'd think that CIOs would welcome KPI digital dashboards as a fabulous opportunity to make IT matter even more within the enterprise. Does the cool reception KPIs received in Redmond reflect a lack of confidence in CIOs? Or does it demonstrate a lack of courage and integrity by their bosses?
Making IT Work columnist Michael Schrage is co-director of the MIT Media Lab's eMarkets Initiative