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The Importance of a Common Methodology for Management and Analysis

PUBLISHED ON 6 NOVEMBER, 2012

Today it is almost impossible to find a company that does not have at least one Scorecard to monitor their strategy. However, it is equally difficult to find a company that follows an effective common methodology for the managment and analysis of said strategy.

The fact is, that companies that do not have a Scorecard that allows them to monitor the effectiveness of their strategy can have dire effects on performance. But furthermore, even in the case where this scorecard exists, the absence of an approporiate methodology, will mean that this Scorecard alone will far from guarantee effective strategy implementation.

Also, it is not uncommon that different departments within large companies function as isolated blocks, each with their own perspective of the company. Not sharing available information throughout the company impedes us from efficiently and effectively aligning the company strategy to achieve our objectives, as an incomplete vision of company performance will not allow us to create the best strategy to improve performance.

In order to ensure that each member of the organization has a complete 360 degree vision of company performance, it is necessary not only to ensure that each company member has acess to the information, but also that all relevant company data (whether that is client, market, social media, online asset, etc. Data) is integrated in order to compare this data within the same context. This allows the impact of the data  to be really understood and gives team members the insight they  need to make appropriate recommendations (which in turn lead to actions).

But not only should company data be made available to all, all organizational members should also undersand the underlying company methodology in order to ensure that they are all moving in the correct direction and carrying out company strategy effectively.  Company methodology may be comprised of:

 

• As a starting point we have KPIs (Key Performance Indicators). Their correct definition is fundamental to measuring the evolution of performance, understanding if we are aligned with our strategy and allowing us to make quick decisions.
• Once the pertinent KPIs have been defined, the tracking phase of these begins, allowing us to check if our strategy is effective in improving performance.
• Where we see that results (found through tracking KPIs) are not in line with expectations or objectives, we need to take action to correct them. For this we rely on team members to coordinate; working together to analyze where problems exist, make recommendations for actions to be taken, to actually take these actions and then to start the process again by monitoring the results of these changes. Therefore, having a well defined workflow and strong communication is fundamental.
• Furthermore, thanks to the workflow mentioned in the previous point, all team members can learn from both their own experience and that of others, making learning part of their work methodology.
• Last but not least, is communication which has underwritten all of the previous phases. Strong communication is vital to ensure that the right information is given to the right people at the right time to allow them to undertake actions to improve performance, and ensuring that none of the previously-mentioned phases have been carried out in vain.

Although all of this- the need for a strong common methodology for management and analysis- may seem obvious, the reality is that many existing companies lack a clear and consistent methodology of management and analysis. Therefore, it is necessary that said companies are conscious once and for all of the importance of having a methodology of this type and above all that all of the members of an organization know it and how to execute it.

Does your company have a methodology like this? Does it seem adequate for your business?