PerformanceCartography™ / LeanBudgets™

https://hbr.org/2018/03/hospital-budget-systems-are-holding-back-innovation

I made a minor stab at this with the nursing floor labor – but it occurs to me that the best way to sell my cartography concept is to take the huge ugly binder of December / Q2 results and convert it to something that can be used by operations managers.  The comparison should be compelling.  The data aren’t set up for an easy translation, but I suppose I have nothing better to do this weekend.

Stay tuned for some before and after comparison.

I ran across some great resources on data visualization by Robert Kosara on his site eagereyes.org.  It seems to be one of the best compilations of the math, psychology, and empirical factors that I’ve seen.  He also seems to recognize some of the “art” in the intangible factors, although I’m not sure he’d put it quite that way.  He has ten years of steady content so it may take me quite a while to explore.

Economics in Wonderland,  Robert Reich

I’ve become increasing convinced that a graphic novel (aka comic book) would be one of the best ways to convey complicated concepts.  Go Robert!

Graphic Novel sample

Charles Joseph Minard created one of the best examples of effective cartography highlighting its superiority over conventional narrative or tables.

This is exactly what Performance Cartography should do for the world of variance reporting and financial spreadsheets.

For a variety of reasons my efforts on LEAN Budgets has been stalled, even though some successes were happening.  We had a good presentation at the IMA conference in Denver in June – thanks Josh!

Now a personal career change might offer a fresh case study in how LEAN Budgets can impact an organization; documented before and after.  I’m also looking for some resources to partner on a rigorous academic evaluation of the methodology.

I’m still working on the mathematical modelling of probability regarding report interpretation, but it’s pretty obtuse material.  I feel like I’ve figured it out, but communicating it is a challenge.

Many thanks to Joshua Faith for this cool art work.

Now I need to get busy and finish writing this gripping tale of budgeting and innovation.

Business Cartography:

These two words came to me out of the blue, but struck me as the perfect description of what our output should look like.  Rather than spreadsheets, business performance needs to be rendered more intuitively as a map.

The business factors of Revenue, Labor, Expenses, and Quality factors can all be sized relative to their impact, and positioning relative to performance benchmarks.

The result is better holistic understanding at a glance without complicated interpretation.

I found an article in, of all places, the Pakistan Journal of Social Sciences that confirmed a notion I hadn’t yet internalized.  Authors Michael Goode and Ali Malik looked over the notion of “Beyond Budgeting” and confirmed most of the conventional budgeting problem, but were doubtful that the solution was captured completely in the Beyond Budgeting movement.

It prompts me to look at where Lean Budgeting falls, and I think I’m working well within budgeting, not beyond.  Rather than figuratively throwing the baby out with the bathwater, I advocate simply stripping the conventional budget process back for best value.  Don’t apply ratios to forecasted volume, then normalize results based upon volume; stop at the ratios and compare actual performance based on ratios.

Faith is nice…. on Sunday….  in church…  for believers.

But we’re not doing budgets on Sunday  …in church  …as for managers as “believers”?  Yes, perhaps too often they’ve been drinking the corporate kool-aid.

I suppose I’m starting to sound pretty predictable, but all my experience leads me to one fundamental recommendation: don’t build your budget on wishful thinking.  Don’t let management team “group think” mess with your forecast, and resist the temptation to build in the “obvious” growth curve.  Even if you’re correct, growing volumes too often serve to hide growing inefficiencies.

Minimize the influence of the forecast, focus on efficiency improvements.

Budget well, and prosper….