The Client
A 3.5 million member health insurance company, with an aggressive five-year strategic
plan requiring alignment of all divisions to meet the objectives. Inconsistent operational reporting and long-standing performance
metrics were not adequate to chart progress of the strategic plan.
The Challenge
The company was drowning in its own data. Even those metrics that were widely
distributed and supposedly understood by management were being tweaked, carved-out, or otherwise transformed into a specific
need of the operational managers. The client acknowledged that they had suffered "metrics mania", and were having difficulty
extracting meaning from their own measurements rendering operational day-to-day decision making difficult, let alone tracking
strategic progress.
How We Helped
The client asked us to clarify, simplify, and streamline their measurement processes.
From identifying and assigning the right set of metrics, to aligning goals to objectives, to driving those metrics and goals
down through the management ranks, the client was having difficulty seeing the forest for the trees. We implemented
a 4 step program to revamp their performance measurement processes.
The first step of the project was to analyze the current state. What metrics were
being reported? How were they generated? Who used them and how? With a set of over 400 reported metrics, we set about mapping
these metrics to the specific objectives of the strategic plan. The results of the mapping were not surprising, but still
disheartening. Some strategic goals were adequately supported, but inconsistent definitions and sources of the data resulted
in different executives citing different results for what was thought to be the same metric. There were "orphaned" metrics
that measured performance not related to strategic goals. Finally, some strategic goals had no supporting metrics at all -
there wasn't any existing measurement of progress.
After the current state analysis, we went back to basics. What were they trying
to achieve? How would they know if they achieved it - or more so - if they were going to achieve it? We defined a few dozen
operational metrics that encapsulated the key performance indicators for the strategic plan including leading indicators and
drivers of performance, not just the results. This included a rigorous definition of each performance metric- its data sources,
calculations, and owners. Given a history of tweaking metrics to support ad hoc decisions, it was imperative to nail
down precisely what was being measured, by whom, how, and why.
As is typical with many large companies, the source systems providing the data,
and the various reporting mechanisms, were widely scattered. We developed a central repository for performance data and
a single delivery mechanism to present results (vs. the existing hodgepodge of reports, documents, and presentations). Executive
and operational management would use the same data, presented the same way, to understand how goals were being met.
The end result was a single Enterprise Dashboard that provided drill-down capabilities
to divisional level results, The whole of a metric was equal to the sum of its parts.
Success
The results of the initiative exceeded the expectations of the CEO. Not only was
the dashboard on point in measuring progress towards the strategic plan, but it also replaced a series of "SVP scorecards"
that had been used by divisional executives in presenting performance of their own organizations. Everyone is singing
from the same songbook, citing the same measures and criteria, and taking action to reach the goals of the strategic plan.
