Should I Use Balanced Scorecard
The purpose of the Balanced Scorecard is to improve the Company’s performance through a strategic and comprehensive approach to measuring performance. Traditional performance measurement, focusing on external accounting data, is obsolete - and something more is needed to provide the information age enterprises with efficient planning tools. The concept supports strategic planning of actions for all parts of the organization centered around Company goals.
The primary transition is from a Financial-oriented, Operational approach, to a Strategy, Perspective and Theme-oriented long-term approach to managing and guiding the business. Objectives, measures, targets, feedback loops, and ultimate ownership must be created and embraced. The process of ownership is central to success. The balanced scorecard, when developed as a true performance planning and management system--not just a measurement or project execution system—uses strategic coordination and collaboration to align all employees to department and organization goals.
The Balanced Scorecard and use of a Strategy Map starts with the Company's Mission and Vision and charts a strategy with the Company's Core Values and extends to include Organizational Capabilities, Internal Processes, Customers and Financial Perspectives. All of which get evaluated for key objectives and cause and effect analysis to maximize impact on the overall strategy of the Company.
A key factor—perhaps the key factor in success—is the ownership and appropriate behaviors of the whole management team, so that people have the proper leadership, and that accountabilities will be accepted. Working in a balanced scorecard environment is not merely accepted, but is embraced as a high-productivity way of life.
This project requires a lead consultant to direct all necessary steps for successful implementation of the Balanced Scorecard. The results must include the ability to measure, monitor and improve company-wide performance from a high strategic level down to execution levels (such as departments).
Successful organizations assign a designated process owner or team to lead the BSC process. In this role, the process owner must have a direct line to, and trusting working relationship with the chief executive. This allows the strategy BSC owner and the chief executive to form a powerful team that is able to move the agenda forward quickly and effectively.
Strategy and the Company Culture
Generally, people do not like and do not want to be measured using numbers...this push back is rooted in the fact that it is not understood how the metrics are being used. For an organization to successfully and effectively deploy KPI(s) the company's culture has to feel safe to the people...otherwise the initiative will fail.
There should be a heartfelt communication about the business and the impacts of not measuring success. Additionally, there is no way to implement a successful KPI initiative without "including" the people (employees, vendors, customers, community) that interact with your business. At all times, we need feedback to be a circular loop. Communication and realizing people are important is the only way to achieve Results.
Nine Steps to Success in Building and Implementing Balanced Scorecard
1. Assessment - Internal and External Strategic Assessment
2. Strategy - Customer Value, Strategic Themes & Results
a) Buy-in from staff – building a performance oriented culture
3. Objectives - Strategy Action Components
4. Strategy Map - Cause-Effect Links
5. Performance - Measures & Targets
6. Initiatives - Strategic Projects
7. Key Performance Indicator (KPI) Analysis– KPI Selection, Software, Performance Reporting & Analysis
8. Alignment - Cascading to Department and Individual Scorecards
9. Evaluation - Strategy Results and Revised Strategies
a) Decision-making based on KPI results.
b) Celebrate success to facilitate staff engagement and building a performance-based culture.
c) Root cause analysis - insight generation.
Role of the Project Lead
The Project Lead assistance in achieving the objectives would include, but not be limited to, the following activities:
- Kick off meetings and training sessions with key company personnel
- Working Sessions to Develop Scorecard Components (Maps, Measurements, Targets, Initiatives)
- Assistance with written communications and meetings, to maximize ownership and accountabilities and minimize resistance
- Recommendations for procedures, cultural norms (i.e., meeting types and durations) which will remove obstacles and strengthen the balanced scorecard
- Development of Strategy Maps at different Organizational Levels
- Development of front-end reporting processes for the Balanced Scorecard
- Assistance in creating ownership that encompasses standards, measures of success, monitoring means and feedback to those accountable
- Observation and recommendations for interactions with Theme Sponsors, Leaders and Team members whose adherence to the new system is key to overall success
- Attendance at large (off-site) and small (on-site) meetings to provide feedback on acceptance and recommendations on follow-up actions
- Ensure meetings and discussions clearly reveal that others were included—and valued—in the decision making process, and that such inclusion was mandatory for success
- Provide a professional, external sounding board for the Company
- Provide a professional, expert view of the talent at the top of the organization
- Increase the cooperation and collaboration among the top leaders to ensure attainment of the goals
The Project Lead would jointly make determinations during the initial 90 days as to whether some of the objectives and interventions required more emphasis than others, and/or whether new needs arose that were unanticipated. In that case, they would redirect their efforts accordingly.
FTF Consulting - Experience and Skills
- 15 year Franchisee
- Former CPA with Deloitte & Touche
- Vast knowledge of finance, operations, customer experience and employee engagement
- Group Facilitation, Brainstorming, and Meeting Leading
- Net Promoter Score surveys, analysis and process improvement
- Microsoft Excel Dashboards
- Key Performance Indicators (KPI's) and Metrics
- Project Management
- Time and Email Efficiency Expert
As a former CPA, franchisee, business leader, consultant and time efficiency expert, I have a unique blend of in depth financial, operational, business process and customer experience knowledge. I would welcome the opportunity to discuss heading up a Balanced Scorecard project with your Company.
Success Systems for People and Business