-
-
Marketplace
-
Channel Resources
Articles from this Site
-
One brand, one Web site! DM Review is now the home of all the content you're used to at BIReview.com and much more. If you are registered at BIReview.com, you're already registered at DM Review. If not, take just a moment to sign up for all the free services we have for you at the new DMReview.com.
The CPO in 2006
When my book Chief Performance Officer was published in 2003, it was a call to action to gather focus and give the discipline of performance management the attention and visibility that was needed at the time. Then, businesses were still getting used to Sarbanes-Oxley requirements, the stock market was recovering from the bubble burst and Y2K hangover and technical spending was starting to pick up. Fast-forward to the present day, and you'll see that the business environment has changed but is just as volatile. Now, businesses are faced with a new rash of mergers, skyrocketing energy costs and ever-increasing compliance and governance issues. One constant remains: managing performance needs enterprise attention and visibility across its associated disciplines.
The chief performance officer (CPO) is the heads up display for the organization, charged with all aspects of managing performance. The CPO is akin to a jet fighter pilot who works with a Chief Strategy Officer in the same way a pilot works with a navigator. The CPO has a number of tools and frameworks for managing performance.
The Three Roles of the CPO
The CPO faces a unique job description that is part business executive, part technologist and part interpreter.
BUSINESS EXECUTIVE
A thorough understanding of the strategy of the business is required. The CPO must have expertise that helps to understand not just what is happening, but why. Through this expertise, the CPO can identify and bring relevance to disjointed observations from the business data.
TECHNOLOGIST
A successful CPO has technical knowledge but is not burdened with technical implementation details. Unlike a chief technology officer (CTO) or chief information officer (CIO) who may implement programs for 'technical glory', the CPO is interested in technical pragmatism. The CPO must have awareness of the existing technology used by management in the company, such as budgeting systems, data warehouses, and intranets. The CPO must also understand emerging trends in technology. Of particular interest are areas of business intelligence - which concentrate on collecting and disseminating analytical business data; and collaborative systems - which allow automated sharing of information throughout the organization with Web-based technologies.
It is important for the CPO to understand the importance of incremental introductions of technology. The CPO must caution against technology saturation must not be lured into the trap of looking for technical glory.
INTERPRETER
The CPO must be able to communicate in business and technical terms. Concurrently, he or she must be able to speak at different levels of detail to management, executives and the board. The CPO must have the vocabulary and interpretive knowledge to bring the information to the recipient's level. It does little good to present middle management level project statistics at a board of directors meeting. Conversely, middle management may not understand or be privy to board-level aggregated performance data. As interpreter, the CPO must be able to quickly adjust the level and context of what is being presented.
The Four C's
Across his three roles, the CPO follows a lifecycle that should be familiar to experienced BI professionals.
COLLECTOR
The CPO plays the role of collector. He or she collects performance measurements and metrics from all parts of the organization. These measurements may be in automated systems on various technical platforms. It takes significant business expertise to understand what is important to collect, and what can remain within the department. As part of the collection process, certain technologies, such as databases and corporate networks, need to be understood and leveraged. In the end, all the performance data will be in one place - the CPO needs to begin with this end in mind.
CONSOLIDATOR
In the role of consolidator, the CPO must take disjointed performance data and consolidate it into one view. This usually takes the form of a single system or database. This consolidation role will also require significant business knowledge. Expertise in how the measures are used in combination is of particular importance. Business expertise and experience will help the CPO decide which data must be homogenized and which can remain distinct. Many parts of the organization will use financial performance measures, but most likely, the measures from the finance organization will serve as the data of record. The CPO must use business knowledge and experience to exclude unneeded analytic data.
CONDENSER
The CPO must also play the role of 'condenser.' Even after the performance data has been consolidated, it needs to be concentrated in a form that is usable by executives. The collection and consolidation process may limit or even filter some of the data being collected, but in the role of condenser, the CPO must present the most relevant data. Much of the data collected and consolidated will have too much detail to be usable by the CEO. As a condenser, the CPO must keep the most relevant data easily accessible without flooding the CEO with unneeded details.
COMMUNICATOR
The role of communicator is the most important for the CPO. What good is it to have collected, consolidated and condensed the data to only have it locked up in a computer system? Worse yet, what if it requires an army of dedicated programs to produce management reports? This is actually the downfall of many business intelligence and executive information systems. The CPO must be prepared to communicate the data to the recipient in the most accessible way possible. One size does not fit all. Some executives will only require a PowerPoint briefing of the most relevant facts supported by some graphs and tables. Others will want a digital dashboard view of an executive information system. Beyond the executive level, the CPO must be able to communicate to upper and middle management their specific interpretation of the performance data. This is not to say that the CPO individually briefs all middle managers. Instead, through his or her technological background, the CPO selects an appropriate delivery mechanism for upper and middle management performance data. If the CEO solicits an opinion from the CPO, an opinion should be given, but the CPO should never substitute opinion or hunches for facts.
Call to Action
Some organizations have adopted the chief performance officer as a single person, but many organizations are being just as successful in adopting a committee approach that represents technology, business and compliance working as one. Whether an organization adopts a CPO approach or not, managing performance is critical to the long-term viability of any organization and cannot be ignored.
Anthony Politano has more than 20 years of experience in IT and is the author of Chief Performance Officer. Read his blog at www.tonyfromjersey.com.
For more information on related topics, visit the following channels:
