CERN The Angels Demons of KPIs James Purvis

CERN: The Angels & Demons of KPIs James Purvis, CERN Jean-Francois Robertz, Cockpit Group

Food for thought “Prediction is very difficult… especially, if it’s about the future” Nils Bohr, Nobel laureate in Physics

About CERN • • World’s largest particle physics centre World’s largest scientific instrument 1954 - Europe’s first joint ventures 2009 - includes today 20 member states. • • • 1 bn. CHF budget 2400 staff 8000 visiting scientists (half of world’s particle physicists) "Bigger is better if you're searching for smaller"

CERN : Facts & Fiction • The World Wide Web was invented at CERN in 1989 by the British scientist Tim Berners-Lee. • Some of the spin-offs: Improving cancer therapy technology, medical and industrial imaging, radiation processing, electronics, measuring instruments, new manufacturing processes and materials, . . • CERN does unfortunately not own an X-33 aircraft as it was suggested in Dan Brown’s book “Angels and Demons”.

The Physics Challenge • The universe is a tough nut to crack. • By smashing pieces of matter together, creating energies and temperatures not seen since the universe's earliest moments, the LHC could reveal the particles and forces that wrote the rules for everything that followed. It could help answer one of the most basic questions for any sentient being in our universe: What is this place?

The particle physicist’s toolbox collisions events Particle accelerator Data Experiments Analysis The purpose of the LHC is simple but ambitious: To crack the code of the physical world; to figure out what the universe is made of; in other words, to get to the very bottom of things.

COCKPIT GROUP • • • Business Intelligence company Founded in 1989 by Neurosurgeon P. Georges 25 staff members delivering business & IT consulting services 200 Cockpit implementation Client base spread in Switzerland, France, Benelux and UK

The Cockpit focuses on 4 key dimensions of dashboards Content You cannot improve what you cannot measure Ergonomics Utilization Too much information kills information Analyze, make a decision, act & control Focus on your core business Data collection

Some of those who manage with Management Cockpit BIG COMPANIES SME NON-MERCHANT

Demons 1990 s – era of Data mining “Trop d’information tue l’information” There are no secrets – only information you don’t have We’re drowning in information, yet starving for knowledge

HR & FI Cockpit Project goals (2007/2008) You can't manage what you don't measure 1. Develop a mean to pilot CERN’s FI and HR departments • Support decision-making • Allow priority management • Support resources allocation Culture Change 2. Leverage available information to define a set of indicators • • • Focus on essentials Align with the strategy Improve structure and ergonomics Facilitate internal and external communication (project status, sponsors) Balance financial and operational indicators to increase pro-activity 3. Coordinate and monitor processes to optimize their value for the organization

“Less than 10% of well defined strategies are effectively executed” Fortune

Execute means taking action, right ?

Let us have a closer look at the process… So, why is it so difficult to achieve ?

Performance management implementation: a 5 DEMONS list Demon #1 We over complicate the process § We measure too much § We measure the wrong things § We over-analyze Less is more when it comes to performance Management ! Start small… then grow !

Keep it simple ! But do it rigourously Management Cockpit portal Objectives External factors Resources Projects

Keep it simple ! But do it rigurously Management Cockpit portal Objectives Are we globally in good shape? Are we reducing our costs? Are we increasing our productivity? Are our key projects in good shape? Are our customers satisfied? Are our employees satisfied? Are our shareholders satisfied? Are we socially responsible? How are our key financial figures? How is this critical unit doing? Are we in danger? How are our market shares? Are we increasing our profitability?

Performance management implementation: a 5 DEMONS list Demon #2 We perpetuate ‘siloed thinking’ We prevent ourselves from ‘seeing’ performance synergies across the organization

Cockpit structure privileges a holistic appraoch PROJECTS INTERNAL FACTORS EXTERNAL FACTORS OBJECTIVES Improve economic value Capital employed (financial ratio) Strategy (6 CEO KPI) Increase Customer Revenues Sales From New Shareholders Expectation Manage Risk Increase Productivity Risk Management Increase current business Rightsize Cost Structure Improve Customer Satisfaction Outperform Competitors Operation Quality – Price – Delay – Functionality Brand Services - Partnership Customer Management Processes Leverage Human Resources Increase Asset use Monitor Macro-economical Factors Innovation Regulatory and social Processes Adapt Systems & Tools Manage project portfolio Optimize Social climate Management Cockpit. Complete or partial reproduction forbidden without author’s prior authorization. Monitor Major Projects Follow Action Plans

BLACK WALL: Objectives Shareholders’ expectations Managing Director KPIs Improve Productivity Increase Revenues Sales volume Financial results analysis Sales value Cost rightsizing Debt BLUE WALL: Ressources RED WALL: External factors Core processes External drivers Marketing Macro-economic factors Sales Toy market evolution In-store & events UK Toy market Operations My market segment HR mangement Other european markets WHITE WALL: Projects Weekly action Plans Meetings & review planning Must Win battles

Performance management implementation: a 5 DEMONS list Demon #3 We don’t engage the workforce 50/50 exchange 50 percent executive ‘push’ AND 50 percent workforce ‘pull’

Isn’t it a matter of asking their opinion ? May Week 20 Week 21 June Week 22 Week 23 Week 24 Week 25 Week 26 Scope definition Formalize Cockpit Book Kick-off Interviews III Tech feasibility IT meeeting Global IT (31/07) Steerco II Final meeting

Isn’t it a matter of asking their opinion ? A pragmatic how-to Question: Are our shareholders satisfied?

Isn’t it a matter of asking their opinion ? A pragmatic how-to Question: Are our shareholders satisfied? Consumer sales value Turnover value GC 5 value P&L current & forecast GC 3 vs Turnover Market share

Performance management implementation: a 5 DEMONS list Demon #4 We fail to institutionalize the performance measurement across the organization § We fear failure § We don’t close the loop of a performance measurement initiative

How to institutionalize performance measurement ? Target – Measure = gap Initiatives & Action plans Develop a strategy & related strategic objectives KPIs Strategic initiatives Develop corporate objectives KPIs, FPIs, PPIs Action plans Develop department objectives KPIs, FPIs, PPIs Action plans Develop process objectives KPIs, PPIs Action plans Objectives Cascade objectives (once a year) Build and link indicators to objectives (need based frequency) Iterative review process (frequency depends on level: strategic, corporate, department or process)

How to institutionalize performance measurement ? Solutions Ergonomic visuals Management Cockpit Indicators Dashboard Scorecard Figures tables Reporting Needs

Performance management implementation: a 5 DEMONS list Number 5: We declare victory at the wrong time

Step by step implementation planning: start small, then grow ! 2009 Activity May Jun PHASE 1 DEFINITION Dashboard structure Dashboard content PHASE 2: IMPLEMENTATION Technology proof of concept Pilot batch implementation Tool selection Batch 1 implementation Batch 2 implementation Batch 3 implementation Batch 4 implementation 05 -Jun-2009 Jul Aug Sep Oct Nov Dec

Measurement • When the 27 -km long circular tunnel was excavated, between Lake Geneva and the Jura mountain range, the two ends met up to within 1 cm.

Methodology A Phase 1 Phase 2 Management Cockpit conception Management Cockpit implementation Translate strategy into operational terms D Detail indicators • Define the indicators parameters • Understand the business context • Fine-tune the indicators • Identify the key challenges of each entity • Design the visuals • Identify the 6 strategic objectives B C Define the Scorecard E Implement the Cockpit solution • Define the questions / domains • Install and parameterize the software • Select the indicators • Create & automate the visuals • Get Management Commitment • Validate visually the indicators Perform technical feasibility • Analyze the current reporting applications F Enable Management Cockpit autonomy • Identify the data sources • Train the Cockpit Officer • Propose the best reporting solution • Get Management Commitment • Facilitate the first Cockpit Briefing Cockpit Experts Cockpit Engineers

Approach Management Cockpit® Objectives Resources External Factors Projects 4 walls 6 questions for each wall

Angels Management Cockpit® Objectives Resources External Factors Projects 4 walls 6 questions for each wall

Architecture 2008 Indicators Strategic AIS systems Dashboard Data Warehouse Reports Operational Measure Analyse Act

Sample Red. Wall visual

Sample Black Wall visual

Side Effects • Increased Monitoring in HR – Pro-active not re-active – Active not passive • Across multiple HR processes Recruitment Programmes RPM Monitoring – Recruitment – Retention – Career Development – Training “You can’t manage what you don’t measure. . . ”

Sample Operational Reporting (using MDL data)

Sample Operational Alerting (using MDL data)

2009 Plans “What if I should fall right through the center of the earth. . . oh, and come out the other side, where people walk upside down. ” - Alice in Wonderland What if? Analysis

Sample What-if

Conclusion Without numbers. . Its just another opinion Pitfalls • • • People adjust their behaviours to match the metrics Measuring Effort Rather than Value Too Many Benchmarking Failing to examine Trends In an organisation whose scientific core activities are oriented around accuracy, measurement & analysis, the Management Cockpit approach received immediate support & welcome from CERN’s CFO.