One of the earliest references to organizational performance management occurs in Sun Tzu’s The Art of War. The author claims that to succeed in war, one should have full knowledge of one’s own strengths and weaknesses, and full knowledge of one’s enemy’s strengths and weaknesses. Lack of either might result in defeat.
Sun Tzu discusses the need for an information gathering system to prevail in battle. We can apply the following fundamental concepts to today’s management decision making needs as were defined several thousand years ago:
- Data collection — capturing the right data at the right time
- Data analysis — discerning pat-terns and meaning in the data
- Execution — responding to the resulting information
Data collection is a key element in assisting managers to achieve a fact-based and high-performing organizational culture. Many firms collect data in a variety of systems ranging from manual to automat-ed. This creates difficulty in aggregating all available data into a unified source for analysis. Sometimes a number of key data elements might not even be captured and as a result not included in the overall analysis. We need to include data not only from internal sources and processes but external ones as well. These could include information about prospects, customers, suppliers and even competitors.
The data collected is not of any value unless it is properly analyzed and acted on. Data analysis involves summarizing the information from various sources and presenting it to managers in an effort to support their decision-making needs. Data captured in manual systems or independently of computer-based data sources are not be included in the overall analysis. We hope that this data would have been captured as part of managers’ intuitive decision making processes and factored into the final analysis.
We also navigate around the trap of over-analysis. Sophisticated and time-consuming data analysis often results in the need to present numerous elements, ultimately drawing conclusions that are both difficult to understand and act on. Simplicity and proper presentation of only a few key data points in a timely manner is usually a much more effective approach.
Results are what matter most. High-performing managers need to act on critical data and reports presented to them to make effective decisions. The more clearly this information is presented, the more effective the overall decision-making processes will become.
Properly planned and implemented information systems can enable managers to leverage their organizational investments in information technologies. In turn, this allows them to harvest the vast amount of data stored in their transactional systems and support the organization in making more informed decisions in a proactive manner. Similar to Sun Tzu, today’s managers equipped with proper information will lead their teams in achieving competitive advantage while enabling their organizations to transform into a high performance work environment.