Performance Reporting: How to deal with skeptics

Financial reports at the push of a button – that’s the promise of performance reporting tools. However, employees are not necessarily enthusiastic about the transparency and the associated workload. How can you convince the skeptics?

Any analysis tool is only as good as its database. Providing the technology is therefore far from enough – a significant part of the project work consists of stakeholder management. Primarily, this involves employee groups that contribute data for the central performance reporting tool, usually middle and lower management executives and their operational teams. These groups need to be convinced of the tool benefits and prepared for the new reporting process.

Typically, the project has to overcome two hurdles:

1. The power of habit

Different teams often use different tools and usually different metrics for internal reports. They expect good arguments to abandon established processes and adapt to a harmonized system. A top-down instruction is usually not enough for employees to accept the new reporting and maintain data diligently. At first, the new system will be seen merely as an additional administrative burden.

2. Fear of sanction

It can be frightening to imagine that the board of directors can compare the key performance indicators of any department with others at any time. Especially when a team’s performance cannot be directly evaluated in monetary terms – for example, in research. Here, the project team must clarify the purpose behind the new reporting process: It does not aim at exposing

In practice, we have achieved good results with the following approaches:

Offering added value: “What’s in it for us?” is a question we are often asked. This is completely understandable. Imagine a team leader who only had to keep track of five key figures – but in the future tool, she will have to maintain 20 data points. Such additional effort is often the price of harmonization: The key figures of several departments have to be brought to a common denominator in order to be comparable. Also, it may happen that top management is interested in different metrics than the operational teams. In such cases, we invite stakeholders to extend the performance reporting to meet their own needs as well: Which insights will help them to manage their own portfolio better? In some cases, synergies arise automatically, for example, when only one tool needs to be maintained for different reporting channels.

Building trust: In big corporations, direct reporting to the board is not standard practice in every area. It is therefore important to emphasize: On the one hand, reporting is an obligation – you will have to disclose the most important financial figures. On the other hand, it also offers an opportunity to show what your department is doing for the company. For some managers, it can be quite appealing to make their achievements more visible and to promote successful projects across departments and at all levels.

These are the essential arguments. By what means do they reach the stakeholders? There is no standard repertoire of measures to achieve this. We usually start with onboarding meetings and work our way down the organizational chart from the department head level to the project manager and team level. In the first instance, we explain what the goals of performance reporting are, and what requirements it places on the stakeholders.

If information does not reach the operational level or if there is a problem somewhere else, the reporting will show. For example, if a department delivers insufficient data quality shortly before a milestone, we will address the responsible manager. Maybe the team has not yet received all the information they need. In this case, it can make sense to approach the team directly, for example in a workshop. If the situation requires it, we will also offer individual help, for instance in consultation hours which are open for spontaneous visits. We will provide this in addition to training sessions, manuals, intranet forums and other support measures, as our experience shows that not all employees actively use such offerings.

And how do we deal with a lack of trust? As a project team, you can of course pass on top management’s promise: “It’s not just the financials that count.” However, it will be more convincing if top management deliver this message themselves, for example at an internal event or with a statement on the intranet. The more trust we have to build, the more important is a direct dialog, e.g. in the form of discussion rounds for particularly skeptical stakeholders.

25.01.2021, Grosse-Hornke

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