It is popular in today’s business environment to separate leadership and management. In this paradigm, leaders inspire and motivate others to achieve great things and advance the organization and society at large. While managers control and constrain others to “toe the line” and maintain the status quo. Leaders are focused on the future and managers are focused on the present, or possibly even the past. Or to be a bit blunter, leaders are good people and managers are bad people.
Warren Bennis, one of the proponents of this paradigm, stated, “Managers do things right, leaders do right things.” That is a pithy statement that goes over well at the clubhouse following a round of golf. But where digital transformation is concerned, it is a false choice. If your organization is attempting to make the transformative changes needed to become a digital juggernaut in your industry, you need to be doing the right thing and doing those things well. A visionary “leader” who cannot implement plans and initiatives is ineffective. A no-nonsense “manager” who is not able to develop an initiative that brings the organization into the digital economy will manage the organization into oblivion.
An individual must be leading and managing simultaneously. These two disciplines should be viewed as a complementary system where the whole is greater than the sum of the parts. The leader/manager should integrate both behaviors in every interaction with their people, not separate them. When developing strategy and goals they are also allocating resources and planning implementation milestones and tasks. When monitoring the day-to-day activities in the organization to ensure performance, they are communicating what is important, providing feedback, and addressing issues based on strategic priorities.
An area where this integration of leadership and management is evident is the organizational metrics. An indication of an organization that is digitally transforming is the reliance on analytics. The incorporation of digital technologies creates data streams that provide real-time information about process performance and customer interactions. An aspect of the culture of digitally transformed organizations is the reliance on data in the form of business analytics for both operational and strategic decision-making.
Because of the rapid pace of change in the digital economy, decision-makers cannot rely on 20 years of experience to provide the correct insight for current decisions. That is not to discount the 20 years of experience, but rather it is to acknowledge that the experience was gained under different circumstances, so the lessons learned must be adapted to the current circumstances. That is why business analytics are so important. They describe the current circumstances. The real-time nature of the analytics is a snapshot of the business environment and the current operational capability and capacity.
Business analytics are essential elements to effective decision-making. However, many organizations have not taken the time to create an analytics strategy. This strategy would determine what information is needed by each person or role in the organization for them to make wise decisions. Based on the strategy, a dashboard of analytics with appropriate drill-down capability is created for each person or role. This dashboard provides feedback on current performance within the areas for which the person is responsible. Analytics also provide warnings of issues and opportunities so the individual can become proactive instead of reactive. Analytics assist the person to focus on what is important for them to do their job well.
The leader/manager should help to translate the analytics strategy into business analytics dashboards and ensure they are being used throughout the organization. The strategic goals and objectives for leading the organization should be reflected in what is being monitored. In addition, the effective management of processes and resources should be in the dashboard. In other words, the dashboard shows if the organization is doing the right thing and if they are doing things right.
I have observed three traps and pitfalls with organizations implementing an analytics strategy. The first is to use the same dashboard for everyone. This inevitably means that most people will not need to focus on major aspects of the dashboard. I recall one example where the most significant item of the dashboard was the current stock price. That was not a particularly useful piece of information for the shop floor workers who were using the dashboard to track production. This can lead to an attitude of treating the analytics dashboard as irrelevant and then not using the information that is relevant for a particular position.
A second trap is to not make the analytics available at the point of decision-making. In this case, access to the dashboards or information is limited to certain systems or locations and not made available at the front line of the organization. I worked with a manufacturing operation that created statistical process control (SPC) charts for all major processes. These were updated hourly. However, the charts were maintained by the Quality Control department and the charts were only available in their work cell. Operators on the floor had no access to the information.
The third trap occurs when an organization provides dashboard analytics to workers, but without guidance for targets or priorities among the competing metrics. In this case, the numbers are disconnected from strategy and the individuals select their own goals and priorities, which may not align with those of the organization. I worked with an organization whose inbound call center had a real-time analytics dashboard. This included longest hold time, average hold time, first call resolution (did the person taking the call resolve the issue or did they pass it on to others), comments recorded (associates were to update the file of the customer at the end of each call with comments from the call), dropped calls. However, there was no clear strategy for the call center, no targets for any of these metrics, and different team leaders emphasized different metrics with their teams. The result was a very inconsistent customer experience.
We have all heard the phrase, “What gets measured, gets managed.” The digital leader/manager needs to be strategic in their use of business analytics. Business strategy should be reflected in the analytics on the dashboard. The dashboard analytics should be actively managed to ensure the organization’s performance is meeting the desired standard.
Raymond Sheen, PMP® LSS BB, is president and founder of Product & Process Innovation, Inc. He is a veteran business leader with over 30 years of executive, engineering management, and project management experience deploying new technology and improving business performance. He has consulted and trained companies in various industries and business functions including marketing, engineering, manufacturing, service, IT, and Finance. Ray is author of the book, Guide to Building Your Business Case, published by Harvard Business Review Press. Ray received his B.S. in Mechanical Engineering from the United States Air Force Academy and his M.S. in Astronautical Engineering from the Massachusetts Institute of Technology and has a graduate certificate in Digital Leadership and Strategy from Boston University.