Shhh! The Top 5 Management Tools In The World
Management tools, if they are used appropriately, can be powerful enablers of change and actions in companies. They can, for example, help define and execute the strategy, engage with customers and employees and monitor performance.
I am always interested to see which tools are most popular and how the popularity of the various management tools is shifting and changing. A great insight into this is provided by Bain's Management Tools and Trends Survey. This study conducted by Bain & Company gives us a global picture of the adoption and trends of management tools. It has been produced annually since 1993 and is now covering 12,371 respondents from North America, Europe, Middle East, Africa, Asia Pacific and Latin America.
The results of the recently revealed 2013 survey show that the world's top five management tools are:
- Strategic Planning
- Customer Relationship Management
- Employee Engagement Surveys
- Benchmarking
- Balanced Scorecard
If strategy execution is a problem then it is good to see the Balanced Scorecard in the list of top 5 tools. In fact, it ranks as the number one tool in Europe, Middle East and Africa. The Balanced Scorecard can take the output from strategic planning and turn it into something the companies can execute. The Balanced Scorecard helps companies to execute their strategy by (1) creating a simple one-page strategy map that outlines the most important strategic objectives, (2) monitoring the strategy execution with meaningful and relevant Key Performance Indicators, and (3) ensuring the correct action plans are in place to deliver the strategic priorities. You can argue that the Balanced Scorecard follows on from strategic planning to ensure the strategy is turned into practice. And again, in difficult economic climates companies need to ensure and monitor that they are doing the right things. (See my recent post: What The Hell is a... Balanced Scorecard?)
Benchmarking goes hand-in-hand with the Balanced Scorecard. Key Performance Indicators can only generate meaningful insights if they are compared with targets and benchmarks. Benchmarks can come from within the company by comparing departments and business units or can come from industry research or best practice studies. This is again a reflection of the current economic struggles many companies are facing. Companies need to make sure they stay ahead or close to the competition. Introducing some competitiveness into their systems with benchmarked performance goals and targets for everyone can boost productitivty. (See my recent post: What The Hell is a... KPI?)
Customer Relationship Management (CRM) is increasingly being used by companies as they try to drive up customer loyalty and maximise cross-selling opportunities and customer profitability. Most companies know by now that it is cheaper to keep existing customers than it is to acquire new ones. The data and insights that come out of customer relationship management systems can then be used to identify cross-selling and up-selling opportunities. Many of my clients are now using CRM systems to better understand customer life-time values and predictive customer trends. This in turn is useful information that should feed into the customer perspective of the Balanced Scorecard.
Finally, we have Employee Engagement Surveys in the list of top 5 management tools. After all, employees are still our most valuable (and often most expensive) assets. The global war for top talent is still raging and every company wants to hold on to the talent it has acquired or developed. Similarly to customers, it usually costs a lot of money to recruit and train new employees. We also know engaged employee are not only more loyal but also more productive. And every inch of productivity is vital in today's competitive global economy. Similarly to the customer information, the data from employee engagement surveys feeds into the people perspective of the Balanced Scorecard.
In my job I spend a lot of time helping companies improve their performance and for me, these five make an eminently sensible list of tools to use for any organisation today, be it a global blue chip, a small or medium sized company or a government agency. They all need solid strategic plans, a tool to execute their plan and ways to monitor and evaluate progress. At the same time they all need to ensure they manage their customers and engage their employees.
The Bain survey also finds that 4 out of the top 5 tools fall into the top quadrant for user satisfaction levels. The only one that lags a little behind is employee engagement surveys, which again is something I can verify from my own experience. In so many cases it is just a statutory process or a PR activity, rather than a true survey of staff engagement. Having said that, in practice I also see many problems with the other 4 tools, which are often implemented in a 'we should have this' and 'we have to follow this process' way. Instead, they are most effective when they are based on real buy-in and understanding and when they are customised to the specific needs of the company.
As always, please let me know what you think. Do you agree with this list and my interpretation of why they are in the top 5? Have you got any good or bad experiences with any of these? Any comments or lessons to share? Please do so...
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Bernard Marr is an enterprise performance expert who helps companies with their strategic planning, balanced scorecards, KPIs and benchmarking as well as the development of customer and staff engagement analysis. Click 'Follow' if you would like to hear more from Bernard in the future.
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