How 'Balanced' is Your Balanced Scorecard? Five
questions to help you regain your balance.
Author: Brian Ward
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Many organizations today have embraced the concept of the Balanced
Scorecard. While many are finding it beneficial, many others are
seeing it as a paper chase. It all depends on your organization's
STRATEGY...keep in mind that a Balanced Scorecard tells the story of
your organization's STRATEGY.
*DO YOU HAVE A STRATEGY?*
If your organizations is using a balanced scorecard, I presume that
your organization has developed a Strategy Map, which shows the VITAL
FEW strategic initiatives and their intended customer and financial
outcomes? If not, then your Balanced Scorecard will likely have too
many measures, be mostly operational in nature, and the Internal
Perspective (where all the action is) will try to measure everything
of supposed importance to the organization.
*NOT A 'SEE ALL, MEASURE ALL' PERFORMANCE MANAGEMENT TOOL*
It should not be intended as a 'see all, measure all' tool for
managing overall organizational performance. Many organizations that
produce a Balanced Scorecard also produce 'off scorecard' measures
that are of importance to them. Many do not, and fall into the trap
of trying to fit everything on to the 'Balanced' Scorecard, which
quickly becomes very unbalanced, unwieldy and unusable.
*FIVE QUESTIONS TO RESTORE YOUR BALANCE*
With that said, here are a set of five questions you can ask to get
at the 'vital few' measures:
1. What financial outcomes are we pursuing over the term (years) of
our strategy?
2. What customer outcomes (satisfaction - delight - loyalty + market
share, etc.) will deliver these financial outcomes?
3. What customer facing strategic initiatives
(products/services/programs etc.) will deliver those customer and
financial outcomes?
4. What changes will we need to make to ensure these initiatives
succeed? (systems/processes/technology/skills etc.)
5. What measures will we need in place in order to track the four
areas above, and how will they link together to 'tell the story' of
our strategy?
*KEEP IT SIMPLE*
Less really IS More! You should be able to describe your strategy to
a raw recruit, within a few minutes, so that they 'get it'. If you
have a new hire orientation program running, that would be a good
place to test the clarity of your scorecard as a communications
vehicle.
*MAKE IT AN ADVENTURE*
Keep in mind that people will make your strategy happen, not
measures. Nowadays, people demand much more from work than a paycheck
and a pat on the back. They are demanding more fulfillment, more
excitement, more involvement. They are demanding an adventure and a
challenge.
In our work with groups, we use an organizational simulation called
Klondike! The Workshop. In it, groups of people form natural
alliances and plans to achieve a specific goal (get to the Klondike
and mine as much gold as possible, within a specific timeframe, and
use as little resources as possible). People in this simulation love
to be challenged, and always rise to the challenge. We use the
concepts of the balanced scorecard, without telling people about it,
and they always 'get it' without being lectured on it, or without it
appearing as an 'edict' - it appears as an adventure and a challenge.
Ther's something about it that makes it simply irresistible.
Make your strategy and scorcard an adventure and a challenge, and see
how people will naturally and positively respond to it.
(c) Copyright 2003 Affinity Consulting
About the author
Brian Ward is a much sought after speaker, coach and trainer who
helps organizations make sense of their Leadership, Strategy, and
Teamwork challenges. His organization, Affinity Consulting, -
http://www.affinitymc.com - specialises in experiential events that
help leaders and their teams turn organizational challenges into an
adventure.
Visit the above website for more articles on Leadership, Strategy and
Teamwork
