Summary

The UK-based Remote Bank is an example of an organization that deployed the Balanced Scorecard as it central management tool right from the time it was a small startup.

Launched in the late 1990s with staff strength of just 50, Remote Bank offered telephone based banking services. In the run up to the company’s launch, the then CEO had decided on the use of the Balanced Scorecard as the core tool to steer the startup.

Summary

The interview focuses on budgeting. Issues covered include the definition of an adaptive organization; strengths and weaknesses of the conventional budgeting process; an examination of budgeting as an annual performance contract; the opinions of finance managers and line managers regarding budgeting; effectiveness of budgeting in goal setting, performance evaluation and reward; reasons why leaders don’t move to new models, even when aware of the shortcomings of the traditional budget; whether organizations are really changing their approach to budgeting; alternative frameworks. It also critically examines the relevance of annual targets for communicating financial projections and ongoing projections to the investment community.

Summary 

In this article, author, management consultant and Balanced Scorecard expert Paul Niven sounds a strong note of caution against overloading Balanced Scorecards with Key Performance Indicators (KPIs) and Strategic Objectives.

Once early adopters of the Balanced Scorecard started seeing results, organizations were convinced that more objectives and measures would make performance management even more effective. This led to overcrowded Strategy Maps and Balanced Scorecard Maps that failed to offer a coherent picture of strategy and strategy execution.

Why keep it a secret?   -  On my way to India I watched a movie called "The social network". It was a movie on how Facebook was invented. I was inspired by one of the founders - Mark Zuckerburg and his dedication to develop the technical and content side of Facebook.

Summary

Scandinavian Bottlers was set up in the late 1990s as a regional bottler for a major soft drinks corporation. From the very start, the management decided to use the Balanced Scorecard as its core strategic management tool because they perceived it as a powerful mechanism to align the company’s vision, goals and strategic initiatives. In fact, the Strategy Map and Scorecard were created before the launch of the organization. Key inputs to the scorecard came from the Annual Business Plans formulated by functional heads.

Summary

This interview is part of a series in which experts respond to questions about some of the persistent issues facing leaders, as they seek to create an adaptive enterprise and achieve new levels of performance. This round features Jeremy Hope, Research Director, Beyond Budgeting Round Table.

The interview focuses on budgeting. Issues covered include the definition of an adaptive organization; strengths and weaknesses of the conventional budgeting process; an examination of budgeting as an annual performance contract; the opinions of finance managers and line managers regarding budgeting; effectiveness of budgeting in goal setting, performance evaluation and reward; and reasons why leaders don’t move to new models, even when aware of the shortcomings of the traditional budget. It also identifies major cultural barriers for transforming the conventional budgeting process and critically examines the relevance of annual targets for communicating financial projections and ongoing projections to the investment community. The interview concludes with Jeremy Hope’s take on the shape the adaptive organization will take in the next few years.

Summary 

In this article, the author examines the need for finding common ground between strategy management and operations management. While strategy management seeks to make strategy relevant to employee’s day-to-day responsibilities, operations management seeks strategic context for implementation and improvement projects. The author presents a performance management framework that describes the common ground.

The author points out that the lack of connect between strategic performance and operational performance leads to issues such as lack of alignment, misallocation of resources, short-term focus, and a failure to perceive risk, among other things.

Target Dictatorship  -  I have seen many different ways in which organizations go about Target setting. One company I visited had a target of implementing the Balanced Scorecard within two weeks of the announcement. They got just two weeks of notice - and the CEO expected this to happen? I advised them to go back to the CEO and tell him that this is not doable, but they refused. "A target which is dictated has to be delivered".