OVER the best part of the last week and a half, my family — along with my parents-in-law — spent our summer “holiday” in France and Italy.
It was not much by way of a typical holiday, I have to say. None of those long days lazing by the swimming pool with a cold bottle of beer in hand situations at all. Yes, there were still sight-seeing visits to the attractions, but not to the usual ones like theatres and shopping centers.
Due to the special request of my wife Cynthia, we decided that this year’s vacation was going to be a different one in every sense. First off, she wanted it to be with her mom and dad, whom she loves most dearly. Second, instead of the amusement parks, she wanted to take a pilgrimage of sorts to some of our faith’s most revered sites. On the year when she turns the age that most of us consider to be a turning point in our lives, she wanted to have time for reflection, rather than just relaxation.
So off we went; first stop — Paris, the City of Lights. Although known mainly for its romantic draw, Paris — unknown to me until now – is home to a good number of religiously significant destinations, among them the Church of the Sacred Heart in Montmartre and the Church of Our Lady of the Miraculous Medal in Rue du Bac.
As a young boy growing up, the Sacred Heart School as well as the Asilo de la Medalla Milagrosa were familiar associations to me. Thus, actually visiting the places where these schools took their names from is really quite a fascinating experience.
Next, it was off to the mountains of the Pyrenees, to the small town of Lourdes where Our Lady appeared to a young French shepherd girl at the turn of the last century. I have to say that visiting the place was an experience quite like no other that I have ever had.
Nowhere have I ever been to before where I have seen so many people from so many countries, races and backgrounds than in that small town up in the French Alps.
Every country in the Christian world (and even many from those that are not) must have been represented there. There were so many people with all manners of disability, in crutches, walking canes, wheelchairs and even stretchers — all there in the fervent belief that they may yet be cured from the illnesses that afflict them.
After coming down from Lourdes, it was just a quick stop in Paris to recharge, and then we were off again, this time to the home of Catholicism — Rome.
Of course, no visit to the city would be complete without a stop at the Vatican.
The only drawback was that this time of the year, the pope was not around, preferring his summer home up in the hills of Castel Gandolfo to the simmering heat of the Italian capital. So we went up there too, to catch a glimpse of the Holy Father as he was delivering his usual Sunday message to the faithful.
The last stop in our Italian itinerary was to the little town of Lanciano, some three hours away from Rome. A small church there is home to what is acknowledged to be the first and greatest Eucharistic miracle the world has ever witnessed — that of the host and wine actually turning into flesh and blood during consecration in the Holy Mass. Documented by many scientists as actually being of human flesh and blood, the relics are still there for the faithful to behold — perfectly preserved all these years, though exposed to the elements, and free from artificial preservatives of any kind.
More next week.
Published in the Sun Star Daily, Saturday, August 18, 2007 (http://www.sunstar.com.ph/static/ceb/2007/08/18/bus/batuhan.cebu.coop.eyes.berry.market.html)
Saturday 18 August 2007
Saturday 11 August 2007
Tipping the balance...finally
WE have covered a lot of ground on the subject of Business Performance Management over the last few weeks.
Our basic premise was that in most organizations today, it is very difficult to get all the parts working together as a coordinated whole. This is true especially in large and “professionally-run” organizations. While the people who work in them know their individual roles and responsibilities, not all have the entrepreneurial vision to understand what it takes to manage a total business.
We introduced the metaphor of an orchestra, complete with skilled and talented musicians, which without the presence of an experienced and competent conductor will not be able to produce melodious music.
Applying this to business organizations, we then explored the ill effects of the over-reliance on the “one version of the truth” from our accountants, which many still use to measure and manage the performance of organizations.
But as we took pains to point out, financial numbers show us only the effects of our past actions. They tell us precious little about what we need to be doing in the present, and even much even less of where we ought to be focusing our efforts on in the future.
One of the recent and most significant advances in management that has come about to address this major shortcoming in business performance management (BPM) is the introduction by Kaplan and Norton of the Balanced Scorecard.
Although both finance professionals by background, they realized the folly of relying on financial statements alone to run a business, and wisely pointed out that to both gauge ongoing performance and guide future action, a much broader perspective is required.
Today, at least on paper, many organizations seem to be using balanced scorecards in their BPM processes. In fact, a number claim to be employing it as their main BPM tool. And yet it is apparent that this seemingly widespread acceptance is nowhere near enough to redress the imbalance.
As the story told by my friend the Finance Director illustrates, old habits die hard.
Business organizations, despite their pretensions to having embraced the merits of balanced BPM measures, are still predominantly judged by their financial results. Whether such financial success was obtained at the expense of the business’ future viability, seems to matter little in the equation.
This happens despite the fact that over the years, many companies have been found to have “massaged” their numbers in various ways, to make it appear that their organizations have performed well, when in truth they were already in dire straits. When it comes to the crunch, financial numbers still take precedence over everything else.
It is difficult to work successfully toward a goal, unless a business knew exactly which goal it was wants to achieve.
Perhaps it is with this preceding statement that we can conclude our entire series on the Balanced Scorecard.
If we are to finally tip the scales towards having a BPM system that tells us the whole story about our businesses — we need to stop relying on financial numbers alone as the main criteria for determining which ones in our organizations deserve rewards, and which ones require punishment for their actions.
Published in the Sun Star Daily, Saturday, August 11, 2007 (http://www.sunstar.com.ph/static/ceb/2007/08/11/bus/batuhan.tipping.the.balance...finally.html)
Our basic premise was that in most organizations today, it is very difficult to get all the parts working together as a coordinated whole. This is true especially in large and “professionally-run” organizations. While the people who work in them know their individual roles and responsibilities, not all have the entrepreneurial vision to understand what it takes to manage a total business.
We introduced the metaphor of an orchestra, complete with skilled and talented musicians, which without the presence of an experienced and competent conductor will not be able to produce melodious music.
Applying this to business organizations, we then explored the ill effects of the over-reliance on the “one version of the truth” from our accountants, which many still use to measure and manage the performance of organizations.
But as we took pains to point out, financial numbers show us only the effects of our past actions. They tell us precious little about what we need to be doing in the present, and even much even less of where we ought to be focusing our efforts on in the future.
One of the recent and most significant advances in management that has come about to address this major shortcoming in business performance management (BPM) is the introduction by Kaplan and Norton of the Balanced Scorecard.
Although both finance professionals by background, they realized the folly of relying on financial statements alone to run a business, and wisely pointed out that to both gauge ongoing performance and guide future action, a much broader perspective is required.
Today, at least on paper, many organizations seem to be using balanced scorecards in their BPM processes. In fact, a number claim to be employing it as their main BPM tool. And yet it is apparent that this seemingly widespread acceptance is nowhere near enough to redress the imbalance.
As the story told by my friend the Finance Director illustrates, old habits die hard.
Business organizations, despite their pretensions to having embraced the merits of balanced BPM measures, are still predominantly judged by their financial results. Whether such financial success was obtained at the expense of the business’ future viability, seems to matter little in the equation.
This happens despite the fact that over the years, many companies have been found to have “massaged” their numbers in various ways, to make it appear that their organizations have performed well, when in truth they were already in dire straits. When it comes to the crunch, financial numbers still take precedence over everything else.
It is difficult to work successfully toward a goal, unless a business knew exactly which goal it was wants to achieve.
Perhaps it is with this preceding statement that we can conclude our entire series on the Balanced Scorecard.
If we are to finally tip the scales towards having a BPM system that tells us the whole story about our businesses — we need to stop relying on financial numbers alone as the main criteria for determining which ones in our organizations deserve rewards, and which ones require punishment for their actions.
Published in the Sun Star Daily, Saturday, August 11, 2007 (http://www.sunstar.com.ph/static/ceb/2007/08/11/bus/batuhan.tipping.the.balance...finally.html)
Saturday 4 August 2007
A balance of truths
EVER heard of Rashomon?
This acclaimed piece of work, from the great Japanese filmmaker Akira Kurosawa, explores the relativity of truth, i.e. the premise that there is no single version of what is “true” — this being subject to whichever point of view one happens to take on an event or incident.
If Kaplan and Norton were fans of Japanese cinema, I would not have had any doubt that their inspiration for the balanced scorecard came from Kurosawa himself.
Accountants often speak of “the one version” of the truth, appropriating this authoritative mantle for the “one set of numbers” that they produce. Many organizations still believe this claim, and continue to base their decisions on what this “truth” is telling them. In fact — and pardon the obvious pun — nothing could be further from the truth.
For example, let us take the event of an organization meeting or exceeding its planned budget. One of my friends who happens to be a finance director for a well-known consumer goods organization, told me that they had just made budget for the year. Consequently, they are all going to get rewarded with handsome bonuses. Under his “truth,” they have done very well.
After a lengthier conversation with him, however, it became painfully apparent that despite making their bonuses, they were perhaps no different from Nero, sitting back and relaxing while their business was rapidly going down in flames.
A major component of their budget achievement came from “cost-cutting,” an exercise that by now is as ubiquitous as the computer in any organization. For example, to ensure that they pushed maximum volume out the door, they re-allocated their advertising and media spending to consumer and trade promotions, enticing short-term purchases and filling the distribution pipeline in the process. Overall, they spent less, and seemed to have been able to sell more for their money.
However, looking at the other indicators for their business, things were not looking quite as rosy. Their flagship brands were under threat by the major multinationals.
Market shares, which only a few years back were in the double digits, had dwindled to single figures. Their distribution system, which in the past used to be their differentiating competitive advantage, was becoming less potent, with lower cost third party distribution vastly improving over time.
From another vantage point, this business could not have been any sicker. And from this version of the truth, management should have been reprimanded, not rewarded. The problem is, no one is looking at things from any other perspective, but the financial one.
Balanced scorecards, whatever connotations it may have on managers of organizations, are nothing more than the Business Performance Management (BPM) equivalent of Akira Kurosawa’s Rashomon. The set of measures that it attempts to capture are so designed, that at any point in time they are able to capture the many version of truth that exist — covering the past (financial indicators), the present (operational indicators) and the future (marketing, research and development, strategic indicators, etc.).
Problem is, organizations still have to make the mental leap that is needed to make balanced scorecards work as intended — that accounting numbers are but one version — among many — of the real truth.
Invariably, even among those actively using balanced scorecards in their organizations, their performance and reward systems are still heavily focused on financial results, clearly exposing which “truth” they consider to be more truthful than the others.
Published in the Sun Star Daily, Saturday, August 04, 2007 (http://www.sunstar.com.ph/static/ceb/2007/08/04/bus/batuhan.a.balance.of.truths.html)
This acclaimed piece of work, from the great Japanese filmmaker Akira Kurosawa, explores the relativity of truth, i.e. the premise that there is no single version of what is “true” — this being subject to whichever point of view one happens to take on an event or incident.
If Kaplan and Norton were fans of Japanese cinema, I would not have had any doubt that their inspiration for the balanced scorecard came from Kurosawa himself.
Accountants often speak of “the one version” of the truth, appropriating this authoritative mantle for the “one set of numbers” that they produce. Many organizations still believe this claim, and continue to base their decisions on what this “truth” is telling them. In fact — and pardon the obvious pun — nothing could be further from the truth.
For example, let us take the event of an organization meeting or exceeding its planned budget. One of my friends who happens to be a finance director for a well-known consumer goods organization, told me that they had just made budget for the year. Consequently, they are all going to get rewarded with handsome bonuses. Under his “truth,” they have done very well.
After a lengthier conversation with him, however, it became painfully apparent that despite making their bonuses, they were perhaps no different from Nero, sitting back and relaxing while their business was rapidly going down in flames.
A major component of their budget achievement came from “cost-cutting,” an exercise that by now is as ubiquitous as the computer in any organization. For example, to ensure that they pushed maximum volume out the door, they re-allocated their advertising and media spending to consumer and trade promotions, enticing short-term purchases and filling the distribution pipeline in the process. Overall, they spent less, and seemed to have been able to sell more for their money.
However, looking at the other indicators for their business, things were not looking quite as rosy. Their flagship brands were under threat by the major multinationals.
Market shares, which only a few years back were in the double digits, had dwindled to single figures. Their distribution system, which in the past used to be their differentiating competitive advantage, was becoming less potent, with lower cost third party distribution vastly improving over time.
From another vantage point, this business could not have been any sicker. And from this version of the truth, management should have been reprimanded, not rewarded. The problem is, no one is looking at things from any other perspective, but the financial one.
Balanced scorecards, whatever connotations it may have on managers of organizations, are nothing more than the Business Performance Management (BPM) equivalent of Akira Kurosawa’s Rashomon. The set of measures that it attempts to capture are so designed, that at any point in time they are able to capture the many version of truth that exist — covering the past (financial indicators), the present (operational indicators) and the future (marketing, research and development, strategic indicators, etc.).
Problem is, organizations still have to make the mental leap that is needed to make balanced scorecards work as intended — that accounting numbers are but one version — among many — of the real truth.
Invariably, even among those actively using balanced scorecards in their organizations, their performance and reward systems are still heavily focused on financial results, clearly exposing which “truth” they consider to be more truthful than the others.
Published in the Sun Star Daily, Saturday, August 04, 2007 (http://www.sunstar.com.ph/static/ceb/2007/08/04/bus/batuhan.a.balance.of.truths.html)
Subscribe to:
Posts (Atom)