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Business Intelligence Results Yield Business Wisdom

Originally published July 21, 2009

Results. You’ve heard that word over and over again if you are part of a business intelligence (BI) initiative. It’s always been true, but especially in these economic times, business execs have little patience for spending discretionary money on anything – especially if it doesn’t have a tangible result. In tight times, priorities must be crystal clear.

In my research to continually find new ways to make BI initiatives more effective, I discovered Dr. Mary Lippitt, an award-winning author, consultant, trainer and researcher. With more than twenty-five years of experience, she is an internationally recognized authority on leading for results. Her results orientation and her focus on organizational priorities are worthwhile topics for BI leaders as they set goals and implement plans. Her research on decision making is also highly relevant to the business decisions supported by business intelligence.

Unlike most leadership work that examines personal style or skill sets, Mary targets how leaders use information and adjust to new business circumstances – clearly an approach that is relevant to business intelligence and ensuring both short- and long-term results. With a bias toward action, Mary spotlights a new aspect in leadership development – business results. Her award-winning book, The Leadership Spectrum: Six Business Priorities That Get Results , makes the case that you must focus on results to get results. She was kind enough to accept my invitation to be interviewed for this article.

Clarry: You focus on business priorities in your work. How do you define a priority, and why do you target them?

Lippitt: I define a priority as a leader’s most desired goal or outcome, given the current situation. Too often the business context is omitted from the discussion of leadership. We are in a fast-changing world and the cycles – whether economic, technological, project or product –  impact what we can achieve. There are several advantages to focusing on priorities. First, using priorities ensures that all the key information is fully vetted and weighed before decisions are made. Next, priorities provide a common language for communicating plans and expectations throughout the organization, aligning efforts and gaining support for action. Finally, no “translation” is needed. People understand these business terms right away since they are part of our business language.

The priority framework does not replace the two traditional approaches to leadership development – personal style and skill set. Instead, it adds the new dimensions of business decision making and goal-setting to ensure solid results. If leaders want results, they must focus on them.

Clarry: In BI initiatives, we see a lot of tension between short-term priorities and long-term results. What led you to this new priority perspective?

Lippitt: Companies are asking for concrete guidance on how to adapt to the changing realties within their organizations and within the larger business world. They want a framework to assess what actions will produce the best results. The costs of not adapting are painfully high. The priorities framework helps leaders recognize when change is needed, stay well positioned for change and communicate change for rapid implementation. The traditional leadership approaches are not outcome focused. Recent Wall Street failures reflect what happens when leaders don’t fully examine options and assumptions.

Style frameworks look at “who” is in front of you, while priorities look at “what” you are confronting. In the end, getting things done must be the prime leadership focus. When business situations shift, leaders must know how to read the internal and external signals and adjust accordingly. While skill development is important, it still does not address the “bottom line” of producing a desired outcome. Priorities equip leaders with the mind-set to select the right skill sets for the situation. My clients wanted business impact, not just improved satisfaction with a leader’s personal skills or competencies. Put another way, leaders want guidance on what they must do to cope with changing realities. They want the business wisdom to make the best decision possible. Leaders are acutely aware that the cost of a poor decision is not only job loss, but also organizational failure.

Clarry: The terms data warehousing and business intelligence are familiar in my industry. You talk and write a lot about business wisdom; what do you mean by “business wisdom”?

Lippitt: Let’s start with the U.S. financial crisis. It does not take a rocket scientist to know that the more mortgages you make, the more profit the organization has the potential to earn. However, how many financial institutions understood the risk of what could happen if a homeowner owes more than the house is worth? How many financial institutions saw the advantage of increasing their “leverage” by extending a loan, but did not see the potential problems with having to foreclose on homes when the homeowner could not pay the mortgage?

Wisdom means making a smart decision for the short- and long-term. A wise leader knows it is crucial to ask all relevant questions, to weigh the information appropriately and to make a choice that serves all key stakeholders. Instead, banks seem to have “cloned” each other’s business strategy and entered into either sub-prime loans or “liar loans” without really assessing the liabilities. Some leaders felt that since everyone was doing it, it must be okay. And we all know that this kind of thinking leads to problems, not excellence.

Clarry: So how can knowledge of the priority framework help leaders develop their business wisdom and take advantage of the information that BI professionals strive to provide?

Lippitt: I think it will help them surface information and formulate effective plans. There’s a saying that leaders never plan to fail, but they do fail to plan. Without a grasp of key business priorities and how to balance them, crucial issues, variables or assumptions are overlooked, resulting in distorted decisions. This happens to many leaders – those who make the headlines as well as those who do not.

Leaders tend to target one thing at a time. While I value the KISS, or “Keep It Simple, Stupid” principle, our complex world is not easily simplified. That was a luxury for another time, and such simplistic thinking must stay in the past. Priorities also serve as a checklist for key elements that must be factored into goal setting and decision making. They help to keep leaders “in tune” with the times.

We all know leaders who assume that persistence with a “vision” will eventually lead to success. While I value persistence, we live in a world of such complexity and speed that persistence is a vice as well as a virtue. I want leaders to persist wisely, having considered all of the relevant issues, factors, information, opportunities and potential consequences. Conviction without thorough analysis is dangerous. With knowledge of the full spectrum of key priorities, success is much more likely.

Clarry: Can you share an example of how priorities helped a leader demonstrate wisdom?

Yes. Let me tell you about a wise CEO. His organization was about to launch a new product line that was widely assumed to help the firm become a market leader. Enthusiasm was high, the financial projections scrutinized and positive, and everyone was on board for what seemed like a slam dunk for the firm. The CEO called a meeting prior to making the final plunge. The leader asked his team, “What are the risks if we implement today?” After a long silence, it became evident that no one could identify any risk. Everyone had become fixated on the benefits. Many leaders might have taken that as a sign to move ahead full steam. This leader recognized that trap. He said, “If we do not know the risks, we do not understand the entire picture.” He knew that only when they understood the potentially negative consequences would they have sufficient knowledge for solid decision making.

In my opinion, that is an example of business wisdom. Many leaders would authorize the new venture, happy to have “everyone on board.” Instead, he knew that no decision is entirely risk free. Their blind spot was dangerous and this executive recognized it, preventing problems in the future.

I think business wisdom is demonstrated when decisions are made by design rather than default, and when leaders ask the relevant questions instead of relying on a quick answer. BI initiatives provide information. Business wisdom happens when leaders interpret all of the facts, trends and opportunities to make an informed decision.

Clarry: So effective decision making can be threatened by omitting some priorities. Why are leaders prone to overlook key priorities?

Lippitt: I think leaders believe that they must have the answer, and they must come up with it quickly, resulting in the proverbial silver bullet approach, similar to The Lone Ranger who only needed one bullet to handle any desperado. It can also be called the “ready, fire” leadership school. An analogy would be the homeowner who believes that WD-40 is the answer to anything stuck, just as duct tape is the solution for anything broken. In our rush for action, we cling to what has worked before and skip over analysis. Critical thinking is not considered a key leadership function, when it really is the most important one. Only thinking, analysis and judgment can help leaders cope with changing organizational situations and challenging business realities.

Let me offer an example of how a failure to consider context and a broad scope of priorities can derail executives. Consider new CEOs who are hired from outside the organization. These new CEOs tend to replicate what they did before and fail to see that the context is different, so they flounder and frequently fail. This is what happened at Home Depot. Bob Nardelli was a highly successful GE executive who was considered Jack Welch’s successor. When he did not get the top job, Nardelli became CEO of Home Depot and brought his GE practices with him. The practices that worked well in an established firm like GE did not work well in a rapidly growing firm.

This tendency to use what has worked in the past has also encouraged many executives to imitate successful CEOs like Welch. When Welch introduced a new policy or practice, many CEOs assumed that if it was good for Welch, it would be good for them, too.

Celebrity CEOs do not face the same situations as every other leader, so their solutions are not guaranteed to work in every organization. Leaders need to make informed and balanced choices, and avoid believing that any “fad of the month” is the path to success.

In some organizations there is actually a parade of single solutions based on a celebrity CEO or a recent best-selling management book, each lasting about six to twelve months. After each fails, it is discarded and another adopted. Then the workforce becomes skeptical and less likely to support the next initiative. What is lost in the tendency to replicate others is a balanced, comprehensive and tailored approach to setting strategy and goals.

Clarry: In business intelligence, there are many companies that would like to replicate what has worked in other environments…technologies, approaches, methods. Would the issues around priorities be the same?

Lippitt: Yes, these issues would be similar for BI initiatives. Not every solution can be replicated in other organizations without understanding the context and developing a balanced and tailored approach.

Clarry: Those examples of the cost of focusing on one or two goals or priorities are compelling. I understand you conducted some research in this area. Was that tendency validated in your research?

Lippitt: Yes, it was. Our research indicates that 45% of the leaders we work with are using one priority, another 31% are using two and 22%  are using three priorities. When you tally those up, it means that 98% are using half of the six business priorities. Now, this does not necessarily mean that these leaders are making poor decisions. The critical question is whether the full spectrum of priorities was included in their deliberations before they selected the priorities that guided their actions. Knowing the priorities and how to weigh them for their situation helps leaders select the ones that will deliver success. Let me briefly summarize the six key priorities in the framework. They are:

  1. Developing new products or services

  2. Gaining market share and retaining customers

  3. Designing systems and policies for internal excellence

  4. Improving efficiencies and quality

  5. Developing talent and a high performing culture

  6. Examining trends, assumptions and new business models
As you can see, these are business issues, and trying to balance all of them requires judgment. Leaders are known to ask that production be done “faster, cheaper, better.” When employees ask, “Which one do you want done first?” a leader typically indicates which priority is most crucial. It would be better to make that decision before the workforce gets confused. Finding the right balance between the six priorities and then knowing when to adjust that balance as circumstances evolve is the hallmark of an outstanding leader.

Clarry: As we are developing BI solutions within our organizations, would it make sense to align information needs to these six key priorities?

Lippitt: Certainly. We have to balance our tendency to focus on what is critical with a wider view. It reminds me of the chess term “see the whole board.” If we recognize a threat that is two moves away, we will make a better decision for the next move. However, we not only need to align and broaden our information collection as a decision is being contemplated, but also we need to create measures for each priority. Balanced measures are critical to effective monitoring, early detection of variance and wise mid-course adjustments. Every leader knows that what gets measured gets done. A single measure can be achieved, but the organizational cost over time may be huge.

Clarry: I understand the attraction of the silver bullet or the single simple solution; we’ve all probably been a victim of this mentality. Applying a single solution must have a cost. What are the costs?

Lippitt: The costs, as your question suggests, are quite high for both the individual and the organization. The individual costs are evident in the extremely high turnover rate in the C suite. However, there are hidden organizational costs, too. We know from research that the success rate of new initiatives ranges between 11% and 33% and that means a huge investment loss. We also see it in failed mergers, where the goal of “economy of scale” overshadows other pressing needs. A “bet the ranch” approach is costly, yet it still has adherents. The allure of the brass ring keeps some leaders searching for the answer. It reminds me of the definition of insanity, which is doing what you have always done, but expecting different results.

Clarry: Given those long odds against success, what can leaders do to successfully implement strategic change?

Lippitt: One key method is to use the priority framework. There is a second strategy too, which is to examine your assumptions about how to move from strategic planning into project management. Too many leaders want to develop a goal and then immediately start implementation. It is our action orientation, and it rarely works.

The “ready, fire” mentality must be replaced with a “ready, aim, fire” practice. Aiming is a translation step, which I term “execution planning.” The payoff is that people understand, accept and are committed to implementation. Execution planning also fosters more cross functional approaches, creates clear progress measures for monitoring achievement, and enables mid-course corrections to keep the plan on track.

The term “execution planning” is used to indicate how important it is for executives to be involved. Too often the assumption is that senior managers only need to set the vision and hand off implementation. Instead, senior leaders need to take a more hands-on approach to translating strategy into the vital, few cross-functional initiatives that will achieve the strategic goals and closely monitor progress.

Mid-course corrections ensure that a leader achieves the intended goals. NASA reports that rockets are off target 80% of the time. However, with multiple mid-course corrections, the rockets arrive at the intended target. The same is true with organizations. Only with active monitoring and adjustment will any plan succeed.

Clarry: In BI initiatives, we refer to the distinction between “program” planning and “project” planning. Tell me more about execution planning’s role as the translation step to project planning.

Lippitt: Let me say that strategic planning is comparable to looking at the future from 50,000 feet. It is lofty and far-reaching. What happens is that the big picture view rarely offers sufficient detail to guide project planning, where the rubber meets the road.

What is needed is something more at the 1,000-foot level that translates lofty goals into specific outcomes that can drive action. In addition, many leaders want the strategic plans to do more than guide decision making – they want them to be inspiring. Clarity is rarely found in inspiring vision statements or lofty strategic plans. Execution planning is a process that bridges this gap to the development of project plans that position implementation for smooth sailing.

Clarry: What actions can leaders take to ensure successful change?

Lippitt: To me, building a culture of trust is essential, and frequently overlooked. Drucker knew the power in culture and captured it with his statement that “culture eats strategy for breakfast.” Our research and experience show that trust is critical to alignment, initiative and collaboration. Few people think about culture in those terms. Too often culture is equated with dress codes, using first names in the hallway, attendance policies and loyalty.

What I mean by culture is a composite of the organization’s systems, practices, policies and actions that foster personal behavior and practices. When there is a high level of organizational trust, it means that the workforce believes the organization is fair, that management walks its talk and that the organization is headed in the right direction. With low trust – or worse, distrust – people drag their feet, actively resist or wait to see if a new initiative has any sticking power. Too many adopt membership on the “B” team (i.e., I’ll be here when it starts and I’ll be here when it ends. I will just wait it out until it passes. No reason to really get on board.).

We need to recognize that organizational culture plays a substantial role in creating the way staff view management. Today, many see senior management as the “them” on the top floor who have low credibility at exactly the point in time when more is being asked of the workforce. Only high trust will enable an organization to move quickly, seize opportunities and enter new markets. I have seen a great deal of attention focused on individual trust, and that is valuable. The question is where you should focus first –  on the organization’s culture and top management or on frontline individuals? From my experience, it is senior management’s responsibility to create a high trust culture. The reason is that it is easier for an organization’s culture to shape the frontline worker than it is for a frontline worker to shape an organization’s culture.

Clarry: What is the one thing that you would like us to take away from our discussion?

Lippitt: I would like your readers to know how critical it is to keep their eyes on the prize –  they need to keep their eyes on the outcomes and results, but also on changes within the organization and their marketplace. They can do that with the priorities framework since it focuses on results. In times of change, relying on the silver bullet mentality just will not work. Wise decision making in the face of change is critical to leadership effectiveness. Not only will it produce results, but it also enables leaders to move from being the one “with all the answers” to asking the key priority questions. Socrates demonstrated the power of questions. Questioning spurs innovative as well as analytical thinking. It also develops personal judgment while molding future leaders. While developing others may sound like a long-term payoff, there is also an immediate one – you get the results you want.

  • Maureen ClarryMaureen Clarry

    Maureen is the Founder and President/CEO of CONNECT: The Knowledge Network (CONNECT), an Xtivia company. CONNECT specializes in data, technical, and organizational solutions for business intelligence. Maureen has been on the faculty of TDWI since 1998, served on the Board for the Colorado Chapter of TDWI, and participates on the Data Warehousing Advisory Board for the University of Denver. CONNECT has been recognized as the South Metro Denver Small Business of the Year, the Top 25 Women Owned and Top 150 Privately Owned Businesses in Colorado. Maureen can be reached at mclarry@connectknowledge.com or 303-730-7171, ext. 102.

    Editor's Note: More articles and resources are available in Maureen's BeyeNETWORK Expert Channel. Be sure to visit today!

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