Tony Politano popularized the concept of chief performance officer in 2003 with the publication of his book "
Chief Performance Officer: Measure What Matters, Managing What Can Be Measured." He has served as chief performance officer at Niteo Partners, an NEC company, and is currently a senior director at Oracle Consulting Services. Satori asked him to explain this emerging executive function.
Q: What is a chief performance officer? Where did the idea come from?
A: I was working on my doctorate in the mid-'90s, studying how executives want to measure their business and what IT was capable of delivering. I realized that nobody was responsible for gathering up all the relevant metrics, making sure they were correct and delivering them to the CEO. That's where the chief performance officer fits. It's like a jet fighter's heads-up display: consolidating all the relevant information and putting it in front of the pilot. The actual title of chief performance officer didn't catch on - perhaps because there were so many other "chief" functions being created at the time, such as chief knowledge officer and chief compliance officer. However, the ownership and management of performance metrics at the executive level has caught on.
Q: Where does this function usually reside?
A: It usually comes from the CFO or business-savvy IT
organizations. The main reason is that these are the people who have their
fingers in everybody's pie. Finance is into every part of the organization,
and when you have a highly aligned IT organization, it is tied into the
strategic business, too.
Q: What are the CPO's main duties?
A: I call them the four Cs: collect, consolidate, condense and communicate. First, you need to collect the information, and it has to be the right information from the right places. Then you consolidate that information so it can be easily viewed. Then the biggest job is condensing it down to those dozen or so metrics that drive the business. One company I know had an executive dashboard with 140 gauges on a single screen. That's not consumable by anyone. Imagine trying to run any part of the business and having to look at 140 different things. And then the final duty is communicating, finding a way to enable people to actually consume this data, rather than having it locked up in the IT system somewhere.
Q: What are the ideal qualifications for a CPO?
A: There are three. First, they need to be a business
partner. They can't be somebody who is purely IT or who is a pure bean-counter,
but they need to have broad business knowledge. Secondly, they should
be technology aware, although they don't necessarily need to be a technologist.
I like to use the analogy of the 19th-century coal-fired factory. The
people who ran those factories had no idea about the molecular breakdown
of what was happening within the coal, but they knew how to burn it to
get every ounce of energy out of that coal. That's kind of the technology
slant that a CPO needs to have. The last qualification is to be a politician.
When you're dealing with these performance metrics, you're going to be
the tattle-tale about some problems in the business. You need to be tactful
and diplomatic when you deliver the numbers.
Q: How can a company manage its data to form the best foundation for the CPO's efforts?
A: The best data management comes from good governance and good stewardship. If you don't have the proper governance and stewardship in place, you're building these decisions on a house of cards. The two go hand-in-hand. With governance, you have a set of standards driven from the top down. Stewardship is more of a bottom up approach. This comes from the people who actually own and manipulate this data on a day-to-day basis. The success of the CPO depends on the whole organization being unified under data. Governance and stewardship, and how they come together, form the backbone process that makes this happen.
Learn more about the role of the Chief Performance Officer at
Tony Politano's blog.
