The adoption rate of business analytics and progressive enterprise and corporate performance management (EPM / CPM) methods is disappointingly slow. Perhaps we can all learn from retired Italian men who meet up each day in parks and appear to be doing nothing.
If you are reading this article and are familiar with my reputation of being critical of accountants then you will expect some cynicism and sarcasm. You will be correct. Here goes.
My wife and I recently enjoyed a two week vacation in Sicily with a travel group. We had an exceptional tour guide. Almost every time that we visited a city’s or town’s public square or park, typically one with a fountain, our guide would point out the retired Italian men standing in small circles or sitting on benches or on the edge of the fountain. Our guide would joke about how these me men congregated for hours on end continuously talking but accomplishing nothing.
One of his jokes was one retired man asked the other, “What are you doing today?” The other man’s answer was “Nothing.” The first man said, “I thought you were doing nothing yesterday.” The other man replied, “I am not finished.”
These retired men were so endearing to watch. I’m sure they each have hours of stories to tell from when they were a younger age. I’m equally sure that they often discuss the ills and woes of today’s world, what’s wrong, and how to fix matters.
How are retired Italian men different than us?
As I observed these old retirees I began reflecting on what I have been doing during the last fifteen or so years of my career. It has been mainly speaking at conferences and writing blogs, articles, and books. And I have not been alone doing these activities. There are what I refer to as the “usual suspects” who also present at same conferences on analytics or enterprise and corporate performance management (EPM / CPM). They include David Axson, Brett Knowles, John Antos, James Taylor, Wayne Eckerson, Tom Davenport, Tom Pryor, Howard Rohm, Donny Shimamoto, Steve Player, John Miller, Howard Dresner, Bernard Marr, Doug Hicks, and Bob Paladino – just to name a few.
When I think of these other thought-leaders I was reminded by the retired Italian men standing around of the similarities of my conversations at conferences with these “usual suspects.” And it is not with positive thoughts. For years we have been crying out for organizations to adopt modern and progressive analytics (e.g., regression, correlation, segmentation, and clustering analysis) and EPM/CPM methods (e.g., strategy maps, the balanced scorecard, customer profitability analysis using activity-based costing principles, driver-based budgeting and rolling financial forecasts). But the adoption rate of these methods has been painfully slow for our tastes.
It is very frustrating for us. Our PowerPoint presentations are compelling. We point out the deficiencies with the current ways that organizations manage (e.g., with constantly changing organization charts, intuition, gut feel, and control budgets that are quickly obsolete after they’re published). We appeal to our audience to be more progressive by using analytics for fact-based analysis or to use EPM/CPM methods to align the executive team’s strategy with actions and resources. (The annual budget is typically disconnected from the strategy.) Although the attendees may be briefly inspired by our proselytism to convert people to our opinions on new ways to manage, my experience is when they return to their offices and organizations, our ideas are quickly forgotten. Yes, they may briefly discuss some of the concepts with their managers and colleagues, but soon the daily firefighting and drills reacting to problems subsume them.
How can we accelerate the adoption rate?
My “usual suspect” colleagues are not alone. There are dozens of consulting firms who offer improvement services – sometimes called “transformation.” These include the large firms like Deloitte, KPMG, Ernst & Young, Accenture, and Cap Gemini, as well as many next and lower tier ones. And the software vendors are also promoting change. For sure, they are seeking to sell consulting and software, but most simply desire for the managers and employees of their clients and customers to have better information and tools to improve their organization’s performance.
There is no magic wand that will nudge organizations to hasten their adoption of these methods and move off the status quo. One thing that is now obvious to me is that technology is no longer the impediment slowing the advances. The software modeling tools are proven and data quality and access to data sources is much less of an issue. The big barrier is people and organization cultures. This includes resistance to change, fear of knowing the truth, fear of being held accountable and measured, and weak leadership – just to name a few.
The solution to accelerating change involves behavioral change management. The problem is few of us were trained as psychologists or sociologists. We will need to get better at this. It would not surprise me that those retired Italian men might know some of the answers. They seem to be much more interested in the lives of people rather than looking at an organization as a big machine and just wanting to install the pulleys, levers, and dials to operate it.