Profiles in Performance: Q&A with Howard DresnerProfiles in Performance: Q&A with Howard Dresner

Howard Dresner

On a four-level ladder starting at "chaos" and reaching "a performance-driven culture realized," most organizations are stuck on the second rung, says consultant and author Howard Dresner. In this extended interview, the former Gartner analyst describes the six dimensions and four levels of maturity described in his upcoming book, Profiles in Performance: Business Intelligence Journeys and the Roadmap for Change.

Profiles in Performance: Business Intelligence Journeys and the Roadmap for Change

Judging by the description, I take your new book to be a collection of interesting case studies with the unifying theme of "establishing the needed conditions for success." What are those needed conditions?

I started off writing the book thinking I was going to write a sequel to my first book about best practices of performance management. In some of the early discussions with some of the candidate companies, I began to realize that the missing element that determines success or failure really boils down to the notion of culture and whether they had a suitable culture to succeed with either business intelligence or performance management. The book is really not about technology per se -- although there are a couple of elements in there that are significant or relevant to technology, having to do with information flows. It really has to do with the culture of the organization.

Is that what's described by your "Performance Culture Maturity Model"?

That came out of some of the early conversations with these organizations. I provided the structure, which has six dimensions and four levels of achievement. But in some of the early conversations, I realized that there was something going on that was really valuable and important. I used that as the lens and the filter for selecting the case studies.

Before we get to some examples, let's talk about what's needed in the culture.

Culture is really about individuals, the groups of individuals, their belief systems and how they interact and behave -- what they really believe and why they're doing what they're doing. That really determines whether or not the technology is going to be successful.

I'll describe the six major dimensions. Two of them are strategic, two of them are operational in nature and two of them are technical. The first one is alignment with the mission as a cultural tenet. In other words, it's about people who really believe in what they're doing. The organizations I profile -- and there are only four of these case studies -- are absolutely religious about what they are doing. They are there for all the right reasons. One of them is Cleveland Clinic. You walk in that place and you're sorry you didn't go to medical school; you just want to work there and be a doctor. It's just an extraordinary place. Another one is KQED in San Francisco. These people are on a mission from God.

So the first dimension is alignment with the mission. That's clearly culture. Another one is transparency and accountability. If you're aligned with the mission and believe in what you're doing, next you have to share information, and everybody has to hold themselves and the organization accountable. The information may come from computer systems or it may not. The point is that it's open and transparent. If everyone is open it's really a good thing. The problem is that in most organizations, everybody wants everyone else to be open and they want to stay closed.

Another dimension is being able to resolve conflicts. Nobody ever talks about that in the context of things like business intelligence and performance management. How do you guys resolve conflict?

Is it more a matter of how you resolve conflicts or whether you resolve them?

In most organizations stuff gets swept under the rug. You get a lot of passive-aggressive behavior. You go into a meeting and everybody is nodding their head. You walk out and they go off and do whatever they wanted to do anyway.

A performance-directed culture is able to air these conflicts and resolve them in a positive way. You get the issues out there. The organizations I profile in the book do that. Some of their meetings get pretty hairy, but stuff gets resolved as opposed to people going off and treating things with benign neglect and doing whatever they want. "Action on insight" is another dimension, but what does that mean?

That simply means when you learn something, you're able to act upon it in a coordinated fashion. In so many environments, when something becomes known, people stick it in their hip pocket and don't do anything. Or, in less mature organizations, people use it for their parochial objectives. How many organizations do you know where they are departmentally optimized? Finance is doing their thing and they are not going to tell Sales about it. And R&D is not going to tell Marketing about it, because they really don't view them as part of their organization. They actually compete against each other. Acting upon insight is simply about taking information, changing behavior to take advantage of what you've learned and, at the highest level of achievement, doing it in a coordinated fashion.

Can you describe the technical dimensions?

It starts with trust in the data. A lot of information is going to come directly or indirectly from some sort of a system, but not always. Where did it come from? And what do I do with that information? That's really important. Am I going to be transparent? Am I going to make sure that we share this insight openly and that we act upon it as a single organization? How does an organization behave like a single organism and achieve its objectives as effectively as possible? Beyond the six criteria, there are four levels of achievement...

Wait, so it's alignment with the mission, transparency and accountability, conflict resolution, action on insight, trust in the data. What's the sixth dimension?

That's availability and currency of information. And does the currency of that information actually match the application? Those last two are technical and are very much about data, because information is the lifeblood of a performance-directed culture.

Okay, now let's describe the levels of achievement.

The four levels go from "chaos" to "departmentally optimized" to "the performance-directed culture emerging" to "the performance-directed culture realized." I go through this in great detail in the book with a matrix describing the characteristics of all of these things. Most organizations aren't in chaos, but sometimes they dip down into it. If you look across all the dimensions, certain organizations will be in a chaotic state in certain categories. And it's also very typical for them to regress as they evolve. But most organizations find themselves on the second, departmentally optimized rung.

You mentioned Cleveland Clinic and KQED, but what are the other two organizations?

One is Mueller Inc., a metal building manufacturer in Texas, and the last is Denihan Hospitality Group based in New York, formerly known as Affinia. Most of these organizations, with the exception of Cleveland Clinic, are midsize organizations. That was a deliberate choice, because I really didn't believe at the time that a large organization could actually achieve performance management.

Can you cite any examples of cultural maturity or outstanding performance from these four organizations?

Mueller is an interesting example. They are also in the Palladium Group's Balanced Scorecard Hall of Fame, and the company has an extraordinary CEO named Bryan Davenport.

What makes him stand out?

He's thoughtful, even keeled and patient. He's also empathetic, but really directed and visionary. The guy has been running the company for 25 years and he's a steady hand.

I would imagine that you would have quite an opportunity to change and mold the culture if you've been somewhere that long.

No question, but it doesn't have to come from one person. You can make progress no matter where you are, and it can come from anywhere in the organization. That's the message of hope, and it was the key thing that challenged some of my assumptions. It can come from IT. It can come from Finance. It can come from Operations. But you know, someone has to make the decision to start making stuff happen. There's a great deal of detail in the book about the companies, where they are today and how they got there. What were the wake-up calls and how did they move forward? Who were the key personnel?. What makes it happen is people, and what they think they're doing and how they navigate through the politics of an organization. It sounds like these cultural traits could help you whether you have BI and performance management or not.

Absolutely. If you want to have things like transparency and accountability, well, that's BI and performance management in terms of an implementation perspective, but not in terms of a cultural perspective. You have to have the systems and support if you want to achieve this on any kind of scale, but there's an attitude that goes with that. The book does not talk about technology or products.

Though surely they are using BI and performance management technologies, right? So even if it's not about brands, what are they focusing on to support their performance?

Well, there's no question they all use some degree of things like dashboard capabilities. In the case of Mueller, they are Balanced Scorecard users and followers of Norton and Kaplan. So they're clearly using scorecards and dashboards to do what they're doing.

How about KQED. I don't think I've ever covered a public broadcaster. What are they doing in the way of BI or performance management?

That's an interesting organization, because they are passionate about supporting their community. It's one of the most mission-directed organizations you'd ever encounter. There's nobody who's there for the wrong reason. In fact, some people actually take pay cuts to go work there, because they're very committed to public broadcasting.

KQED uses information in a variety of ways. They use it for fundraising, certainly, but they also follow the ratings very closely. Arbitron and Nielsen figures are very important to those guys. But as opposed to a commercial station that's looking to make more money per user or increase the value of a transaction, they're just trying to reach people. The fundraising is a little bit different, because it's zero-based budgeting. Whatever they bring in, they spend. There's no profit; they just have to figure out how to pay for the projects they want to do. It's a very different organization, but a lot of lessons are applicable to any organization.

What can we learn from Cleveland Clinic?

Those guys blow me away. They are one of the foremost health care providers in the world. Their mission is patient first, and everything surrounds that. When you meet Dr. Cosgrove, the CEO, he is very passionate about supporting the patients. The organization is completely doctor run. Even the CIO is a practicing M.D.

When you have a mission like that and everybody is focused on patient first, it does kind of force the pieces into place. It makes it much more difficult to resist change when everything is done in the name of patient first.

Any particular technology twists at Cleveland Clinic?

They all have pretty sophisticated information systems at this point. But, again, it's not about the technology; it's about getting people to use it and to believe in the technology. It's about making it core to what they do, using it to keep them aligned with the mission and to be accountable for what they're supposed to be doing. I think the book is useful and timely, because most organizations just aren't there yet.

In our last interview you said large organizations have difficulty with performance management. Do you still believe that?

I've been part of organizations of all sizes during my career, and the smaller ones just tend to be more fun. You can get things done much more readily. That's not to say I favor one over the other, but I think large organizations can learn a lot from small organizations. When you have so many layers in organization, you tend to get duplicative efforts and internal competition. Cleveland Clinic, a $6 billion organization, turned out to be the exception, and that's why it's so special. Their example proves that it is possible for a large organization to be performance directed. It's not easy, but it's possible.