Webinar Recording
Corporate Performance Management: Scorecards & Dashboards that Drive Results
Tim Weeks, Director of Scorecards, CFOwise
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Duration: 1 Hour
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Corporate Performance Management WebinarCompanies have access to more and more data, and as such are challenged in leveraging the data to identify areas of operation that impact company performance, and creating metrics that allow them to effectively manage these areas of operation. What information and metrics do finance, accounting, treasury and related leaders really want, and actually need? How is technology being leveraged to consolidate, analyze and deliver metrics and dashboards that offer the right data to company leaders?

 

This Corporate Performance Management Webinar is from the Proformative webinar "Corporate Performance Management: Scorecards & Dashboards that Drive Results" held on November 15, 2012. The webinar features a presentation from Tim Weeks, Partner and Director of Scoreboards, CFOwise.

 

Corporate Performance Management Webinar

 

"Thank you, Ernie, and thank you to Proformative for the opportunity to be here. As Ernie mentioned, I'm a partner with CFOwise. We provide part-time outsourced CFO products and services to small and midsized businesses. The last 18 months has been a very exciting time for us, as we've been on a journey to transform the way that we provide products and the types of products that we provide to our clients. We'd like to share a few lessons that we've learned along the way today.

This is a very exciting time for companies of all sizes, as the ability to do scoreboards, scorecards, and dashboards has really provided a great opportunity for any organization. You're going to hear me today refer to everything as scoreboards. We see that as a blend of both scorecards and dashboards. For our clients, it makes a lot of inherent sense. Whether you're in a large organization or a small organization, I believe the principles that we'll talk about today will provide some great value.

We're going to jump into something kind of fun to start with. Let's talk about the lessons that we can learn from sports. This first one is kind of a fun, quick question. How many minutes are actually played in an NFL football game? You may have seen it flash up there real quickly. An NFL game will last about three hours on television. You could waste a good amount of your time on some of what they show.

The question is, how many minutes from the time that they snap the ball to the time the whistle is blown are the players actually playing? You might be surprised. The answer is 11 minutes. Now, the game actually runs for four 15-minute quarters, but only 11 minutes of that time are you actually watching the players play.

That brings up the question of what are they doing the rest of the two hours and 49 minutes? Here's an example of what they're doing during those three hours. The first thing that jumps to mind is that hour of commercials that makes you kind of grateful for the DVR today. When I saw the 11 minutes, my first vision I had was a picture of a lineman running down and then afterwards, be on the bench with his oxygen. Really, only 11 minutes.

Now, there's not a whole lot of application to that. Let's talk about if you were an NFL owner or NFL coach, what is the greatest predictor of determining whether or not you won the game? Now, for those of you who immediately go to, "Of course, it's whoever has the most points at the end of the game," let me frame it a little differently. How do you determine which team is going to have the most points at the end of the game?

The number one predictor of that is fewer turnovers. You'll notice here that 78% of the time, the team with the fewest turnovers will win the game. That even increases if it's the home team, 83%. Ironically, the second best  predictor of the winner is in more rushing yards, which is interesting because for most fans, we want to see passing. For an NFL owner or team, they understand the importance of those metrics.

Now, I took a quick look to see - I'm going to ask throughout this presentation, the question, therefore, what does it matter? To an NFL coach, this greatly matters. I noticed that - I took a look at the top eight highest paid coaches in the NFL - the difference between the highest paid and the eighth highest paid was about $2 million per year. Yet, their winning percentage, the highest paid coach won 0.6 more games per year than the eighth highest paid coach. Every win in an NFL game is incredibly valuable.

All right. Let's take a look at the NBA. Just an interesting fact, how many calories does an NBA player burn during a game? The answer to that is 860 calories. He runs approximately three miles on average on NBA floor wood, compared to a couple miles in college. Now, if you're trying to predict the outcome of an NBA game, what's the most important factor? Would you focus on offense, on defense, on free throws?

The answer to that . . . Now, we're talking about the NBA here, so don't get confused by field goal conversion. We're talking about the percentage of baskets made compared to shots. The percentage of shots made by the team is the greatest predictor. It is three times more important as the second predictor, which is the average three-point conversion of the opposing team.

The last line is the one I think is very significant. For every 1% increase in the percentage of baskets made, the chance of winning increases 8%, so just an interesting, again, predictor. We're trying to figure out how do we predict whether or not we're going to win a game? We're going to talk later
about predicting whether or not our companies are winning.

Editor's Note: The Proformative library of recorded webinars contains a vast quantity of videos on many different topics, including Emerging Market Strategies Webinar, Business Analytics Webinar, Business Intelligence Webinar, Corporate Financial Reporting Webinar and Renminbi Rebalancing Webinar. Proformative also offers an ongoing series of live webinars.

Finally, what is the average life of baseball in major league? How would you measure that? Would you measure that in terms of innings or hits? The answer is pitches. The average baseball lasts six pitches. The home team has to provide quite a large number, and compare that to 12 hockey pucks that are used during an NHL game.

Now, if you're trying to predict, again, the winner of a major league baseball game, pitching is the most important. Again, fans are there to usually see the home run hitter and like batting, but it's actually the pitching that really matters. The pitcher's earned run average, or ERA, is the best predictor. The second is a very similar measurement.

Just one interesting note, I'm actually a big fan of soccer. That's a sport I've grown up playing my whole life. I tried to look for the best predictor in a soccer game, and there really isn't one. It turns out that things like weather, and injuries, and disciplinary actions make it too difficult to predict. That's probably one of the reasons why it's not such a fan favorite here in the U.S.

My wife and I, last year, were out of town. We were out having dinner, and there was a TV at the restaurant. At the time, I was knee-deep in building scoreboards for our clients, and so I started noticing scoreboards wherever I was. I noticed on the TV that this game was going on. It was the St. Louis Cardinals playing the Philadelphia Phillies. They were in the beginning stages of the play-offs. This wasn't this exact moment. This is the best screenshot. I apologize it's a little blurry, but this is the best I could find.

One of the interesting things is on that screen. That takes up a very small percentage of the screen, and yet, it provides a lot of data. Just take a minute and look at what you know about what's happening at this game. There's quite a few measurements you're given. There are actually nine different items that we learn from teams who score, who the home team is, who's up to bat.

Now, if you understand baseball - which I'm not a huge baseball guy, but I understand a little bit - if you're looking at this game at this moment, you're probably interested in sitting down and watching the game at this moment. Now, those data points are great, but now really comes the question of, therefore, what? What does it matter? What would we do at this point?

I showed this in a training session a little while back. We had in the room a former college baseball player. It was really fun to hear his analysis of what's happening behind the scenes, what the manager is considering at this time. He brought up that the tying run is on second base. The batter is actually the go-ahead run. It's the top of the fourth, and so it might be too early to be making changes to the batter, to the pitcher.

All of that is happening and going on in relation to this game at this point. Really, those who understand what's happening control. Those of us in our companies have the opportunity to look at that data and really determine what decisions, what strategy are we going to implement at this point?

As a side note, St. Louis was actually a couple runs behind at this moment, but they came back to win this game. They went all the way to the World Series. In game six, they actually were two runs down in the bottom of the ninth, came back to tie it up. The rangers at that point were one pitch away from winning the World Series. I think it was won that game six, actually went into the tenth inning, down two runs again, and came back to win the game. Then, won the game in game seven to win the World Series. These things matter.

As we look at how we compare or what lessons we can learn, here are a few thoughts. First of all, scoreboards become more valuable to us, to our teams, to our leaders in our organizations over time. As a principle, when we meet with our clients for the very first time to show them their scoreboards, we prep them right off the bat.

The first time we look at these scoreboards, there's going to be far too much information to really understand and to really get the strategy from. We start that first one with getting the most important pieces. Then, over time, our clients have the ability to understand each of their scoreboards and what the measurements tell them, and what decisions they need to make.

Scoreboards can bring a lot of clarity, a lot of peace of mind to leaders throughout the team. Again, as we apply that sports measurement to it, it gives us the opportunity over time to really better understand it.

Now, what should we measure? We're going to talk more about this as we go throughout today. There is one key piece to that. That is you. Each of us in our organizations or with our clients are the greatest tool or asset that the organization has to really determine what should be measured. We're going to talk a little bit about how we go about doing that and some thoughts from some of the studies that we've been provided.

Next is defining the opponent. It's pretty obvious in sports. We look at the other side. We see the team that's in the other colored shirts. When it comes to our companies or organizations, it's not enough for us just to look at historical data. We need to look at historical data and current real-time data, in terms of targets, goals, forecasts, and budgets to make sure that we are on track to meet the goals of the organization in the long run.

Next is predictors of success. We looked at that for the sports teams. We have been historically very good at providing financial statements. the P&L, the balance sheet statements, cash flows, even budgets and forecasts. It's based on history, but those can take some time. Even with some of the really impressive close rates that we're seeing in certain organizations, we still need to be able to . . ."

End partial: Corporate Performance Management Webinar

Companies have access to more and more data, and as such are challenged in leveraging the data to identify areas of operation that impact company performance, and creating metrics that allow them to effectively manage these areas of operation. What information and metrics do finance, accounting, treasury and related leaders really want, and actually need? How is technology being leveraged to consolidate, analyze and deliver metrics and dashboards that offer the right data to company leaders? Learn this and much more by registering for this live and interactive webinar.
Recorded Nov 15, 2012

Learning Objectives

After attending this webinar you will be able to:
Define the current landscape of technology being leveraged to create dashboards and scorecards
Discover best practices in developing scorecards for your company
Leverage practical advice in harnessing and unlocking the value in your company data

Speakers

John KoganCEO, Proformative
John Kogan
CEO, Proformative
John has been CFO at four technology companies, a finance executive at Cardinal Health, and in multiple roles at AlliedSignal and Cisco Systems. John has raised over $100M in equity capital and debt and has played central roles in numerous buy and sell-side transactions for both public and private companies. As COO at two companies, John also ran Engineering, Manufacturing and Customer Service operations. He has also founded, invested in and been a board member or advisor of a number of companies. John has a B.A. in Economics from Connecticut College and an MBA from the Fuqua School of Business at Duke University.
Tim WeeksDirector of Scorecards, CFOwise
Tim Weeks
Director of Scorecards, CFOwise
Tim brings a unique entrepreneurial perspective to everything he does. He has owned and served as President/CEO of two organizations and served as a CFO and executive in several others. Known for his abilities to communicate with, empower, and direct employees and stakeholders at all levels inside and outside of a company, Tim has brought progress and continual improvement at every opportunity throughout his career. With deep experience in accounting, finance, marketing, online retail, and everything else that is required to start, build, and grow a successful business, Tim knows how to add value and make a difference. In addition to designing and implementing accounting, finance, shipping, and inventory systems, Tim has also helped raise debt and equity capital, developed pricing strategies to maximize margins and cash, maintained information and other technology systems, and assisted with SEC filings. Tim is a trusted business advisor to his clients, and he enjoys helping entrepreneurs develop the right strategies and then execute those strategies through his own battle-tested set of experiences. Tim earned a Bachelor’s degree in Accounting from Brigham Young University and is a licensed CPA in the state of Colorado.

Sponsors

Event Sponsor Prophix
Prophix - Prophix is a leading developer of innovative performance management solutions designed to automate financial and operational processes, making companies more profitable and reducing their risks. Thousands of finance leaders in nearly one hundred countries use Prophix to empower their organizations and gain valuable insight into business performance. Prophix and its partners deliver superior value by combining high-end functionality with low cost-of-ownership and fast implementations. With powerful and adaptable solutions built entirely on the Microsoft SQL Server stack, Prophix streamlines budgeting, planning, reporting, consolidation, and more.
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