Summary

Architecting a Balanced Scorecard requires organizations to master four techniques – effective strategic mapping, selection of the right strategic measures, selection of the appropriate strategic targets and choosing the right strategic initiatives.

This article focuses on the second aspect, namely, choosing strategic measures.

In the scorecard hierarchy, metrics follow strategic objectives and initiatives. Metrics play the crucial role in the Balanced Scorecard system – they serve to monitor progress toward strategic objectives, and in doing so test the efficacy of the strategy.

Summary

Architecting a Balanced Scorecard requires organizations to master four techniques – effective strategic mapping, selection of the right strategic measures, selection of the appropriate strategic targets and choosing the right strategic initiatives.

This article focuses on the third aspect, namely, choosing strategic targets. The way in which organizations choose strategic targets has a great bearing on their performance management results.

All enterprises set targets. While most are financial, the Balanced Scorecard reminds them to pay equal attention to both financial and non-financial targets and to synchronize goals to a longer term, strategic horizon.

Summary

Architecting a Balanced Scorecard requires organizations to master four techniques – effective strategic mapping, selection of the right strategic measures, selection of the appropriate strategic targets and choosing the right strategic initiatives.

This article focuses on the last, namely, choosing strategic initiatives.

Next to the identification of the strategic objectives, selection of strategic initiatives is the most important component of the Balanced Scorecard framework. They are more important than metrics. While the Strategy Map describes the logic of the strategy and the Balanced Scorecard identifies measures and targets for each strategic objective, managers can achieve objectives and targets only by identify the right strategic initiatives required to deliver performance outcomes. In fact, the work of performance management and strategy implementation takes place through strategic initiatives.

Summary

This article looks at the rationale for designing and implementing pilot projects for introducing the Balanced Scorecard concept in organizations.

It begins by showing that the ideal text-book scorecard implementation process, which begins with the global organization’s executive committee creating the first Strategy Map and Balanced Scorecard and cascading it down successively to the divisional heads, business unit heads and functional heads to create fully aligned scorecards is an exception rather than the rule. Perhaps less than one in 10 ten scorecard implementations start at the executive table. Rather, typically, the scorecard is piloted at a lower level in the organization before wider adoption.