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.

Summary

This article discusses the engagement of external consultants for change programs or performance management initiatives like the Balanced Scorecard and offers guidelines on what organizations should do and what they should not do.

The Balanced Scorecard has grown hugely in popularity and so has the community of consultants offering expertise in the design, development and implementation of Balanced Scorecard solutions. Organizations need to be aware that there is a marked differential the quality or value of services offered by scorecard consultants. The picture is cluttered with examples of consultants who have made a difference to the success and those who have failed to deliver.

Summary

The article begins with what is the ultimate objective of a strategic performance management initiative like the Balanced Scorecard – ‘to make strategy everyone’s job.’ To do so, organizations need to align individual performance with the strategic objectives. In this endeavor,
personal Scorecards assume significance as a central tool.    

In an ideal scorecard cascade, personal scorecards serve as the final step in the process, starting from corporate, divisional, business unit, functional, and team to individual levels. The underlying belief is that cascading the scorecard to the deepest level of the organization fully aligns the individual’s objectives to the organization’s objectives.

Personal scorecards also introduce a high degree of transparency into organizational performance and also serve as the only appraisal system within the organization.

Summary

The introduction of a Balanced Scorecard program is a major enterprise performance management initiative or change program, involving considerable time and money for the full design and rollout. Hence, it is important to develop a clear idea of the business benefits.

This calls for building a compelling business case. When business faces a question of survival, as one example in the article shows, this is probably made easier. Such cases are an exception and most scorecard initiatives are proposed in organizations that face a ‘business as usual’ situation. In such scenarios, the proponents need to develop a clear plan for championing the Balanced Scorecard program.