Beethoven’s ‘Eroica Effect’ and Analytics  

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I was educated as an industrial engineer. Engineers are typically not perceived as very worldly or sophisticated. They are often pictured with a shirt-pocket protector stuffed with pens. But some engineers, like me, do have appreciation for the performing arts. For example, I appreciate classical music. In particular, I admire and am in awe of the great classical music composers. How did Tchaikovsky and Mendelssohn transcribe with a pen such beautiful music as notes from their brain on to a page of musical score for so many instruments? (Hint: I don’t think they had a smartphone or email to distract them.)

I believe that in the next few years the adoption rate for enterprise performance management (EPM) methods imbedded with business analytics will accelerate. Examples of analytics are regression, correlation, clustering, and segmentation analysis. Core EPM methods include strategy management (strategy maps, balanced scorecard, dashboards); profitability analysis (by products, channels, and customers); driver-based budgets and rolling financial forecasts), enterprise risk management (ERM); and continuous improvement (lean and six sigma quality management). They should ideally be seamlessly integrated.

This acceleration will have an effect similar to the one Ludwig van Beethoven’s masterpiece – his third symphony, Eroica – had on the future of classical music. Beethoven followed Eroica with his universally memorable fourth to ninth symphonies, and other great composers emulated him. What connection am I making between classical music and EPM?

Breaking free from tradition

Ever hear much about Beethoven’s first or second symphony? Few people have. That is because it was with Eroica, his third symphony, where Beethoven himself is quoted as saying, “I will now take a new path.” It was a radical change in music composition.

Eroica, inspired by Beethoven’s admiration for Napoleon as a world leader, had true melody. Prior to Eroica, Beethoven’s compositions followed a tradition where melody was rare. Before composing Eroica he complied with the conventional rules of what tasteful music for the elite should sound like. His prior music was influenced by masters who dared not change from tradition, such as Bach and Haydn. But Beethoven had a strong urge to break free from tradition. With Eroica, classical music was changed forever.

The evidence of the “Eroica effect” is this: How many billions of people, including you and me, will die with little trace of remembrance generations from now other than a cemetery tombstone or urn with your ashes? But the music works of Beethoven, Mozart, Rossini, Sibelius, Grieg and others in their league will be listened to for a long time to come – possibly for centuries.

Are we now at a point where the application of business analytics and the implementation of EPM’s suite of integrated methodologies, similar to Eroica, will also “take a new path?” Yes – because tradition increasingly gives way to change, and organizations are slowly and gradually learning to not just manage change but to drive change.

The future of business analytics and enterprise performance management

People are what it’s all about, so I honor and respect the importance of applying the principles of behavioral change management. However, my love for quantitative analysis influences me to conclude with a short narration by the great Princeton University mathematician and Nobel Prize winner John Nash. Nash introduced a theory describing how rational human beings should behave when there is a conflict of interest. In the Academy Award-winning movie about Nash’s life, A Beautiful Mind, he said:

“I like numbers because with numbers truth and beauty are the same thing. You know you are getting somewhere when the equations start looking beautiful. And you know that the numbers are taking you closer to the secret of how things are.”

The executive management teams with the courage, will, caring attitude, and leadership traits to take calculated risks and be decisive will likely be the initial adopters of a fully integrated EPM system imbedded with business analytics. They will achieve the full vision of applying business analytics and EPM methods. Other executive management teams will follow them.

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Gary Cokins
Gary Cokins is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina at www.garycokins.com . Gary received a BS degree with honors in Industrial Engineering/Operations Research from Cornell University in 1971. He received his MBA from Northwestern University’s Kellogg School of Management in 1974. Gary began his career as a strategic planner with FMC’s Link-Belt Division and then served as Financial Controller and Operations Manager. In 1981 Gary began his management consulting career first with Deloitte consulting, and then in 1988 with KPMG consulting. 1992 Gary headed the National Cost Management Consulting Services for Electronic Data Systems (EDS) now part of HP. From 1997 until recently Gary was in business development with SAS, a leading provider of enterprise and corporate performance management (EPM/CPM) and business analytics and intelligence software.

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