Balanced Scorecard

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What all the fuss is about
Since the publication in 1993 of Kaplan and Norton's seminal journal article on Balanced Scorecards in the Harvard Business Review, numerous case studies have made impressive claims for breakthrough performance in organisations that have implemented the methodology. This poses two questions:

• What is the need that BSC is fulfilling?
• What have we learnt from failure to implement a Balanced Scorecard initiative that reassures us that it is a mature technology?

What is the need?
Strategy is great in theory, important but not urgent (after all, we can always talk about it tomorrow). In competing with day-to-day operations, which are often important and urgent, some stark facts emerge:

• 90% of organisations fail to implement their top team's strategy.
• 70% of these failures come not from poor strategy but poor execution.
• 85% of executive teams have less than 1 hour per month to discuss strategy.
• 95% of the workforce does not understand their organisation's strategy and their part in it.
• 60% of organisations do not link budgets to strategy.

The Balanced Scorecard is a performance management system focused on strategic measures. In addressing all of the issues above, it:

• Encapsulates strategy on a concise one-page document
• Balances financial and non-financial goals
• Can be quickly updated in response to fast-changing market conditions
• Is easy to grasp and communicate throughout the organisation.

Have we learned anything about implementation?
There is now a mature body of work that has critiqued (and developed) the theory base and started to draw powerful conclusions on how to secure a successful BSC implementation.

If you go down the balanced scorecard route, you can expect the implementation effort to be substantial, even though the method itself is pretty straightforward. This, after all is a major change project: when we read the case studies, the potential rewards lure us with their glitter and shine. The costs of failure of a major change project are therefore the obverse side of the coin. Based on original research by OPDC as well as by others, we will show you:

• How you can diagnose your own organisation's fitness and readiness for Balanced Scorecard, so that you don't go to the unnecessary expense of initiating a non-starter.
• How you can design-in the critical factors for a successful implementation and dial out the avoidable pitfalls.

Applications
Balanced Scorecard can be used across your whole organisation, just within its key functions or simply to manage your critical projects. It provides an excellent working tool for all members of staff, ensuring that they are guided at all levels by the same strategic aim. Staff can also use it to monitor whether your strategy is working in practice, and give actionable feedback.

Our programmes give an overview of the Balanced Scorecard and enable you to work through a case study, before focusing on your own organisation. The initial learning objectives are to enable you to:

• Understand the Balanced Scorecard as a concept
• Formulate strategic objectives and Critical Success Factors, using the Balanced Scorecard framework
• Identify strategic Measures and Targets
• Use an effective technique to communicate and get agreement on the Balanced Scorecard within your own organisation
• Identify possible pitfalls for Balanced Scorecard implementation
• Assess the suitability of the Balanced Scorecard for your own organisation

If you then wish to go on to develop the Balanced Scorecard for your own organisation, we help you design and implement the Balanced Scorecard as a project.

If your organisation needs to do further work on the vision or strategy, we can help to accelerate this process through additional support before starting on the Balanced Scorecard.

Just as we can provide support for accelerating the development of your vision or strategy in advance of starting the Balanced Scorecard, we can provide additional support afterwards by helping to fine-tune your final Balanced Scorecard, or by helping with implementation in the rest of the organisation.

Our full range of Balanced Scorecard services include:

• Audit of your current or proposed Balanced Scorecard, or its implementation
• Balanced Scorecard familiarisation workshop and exploration of BSC suitability for the client organisation
• Formulating your Strategy as a Balanced Scorecard document
• Rolling out your Balanced Scorecard implementation
• Coaching the Balanced Scorecard implementation team, including the Balanced Scorecard architect, to run the implementation project

A brief example of our work.

One of our clients is a holding company providing niche solutions in the aerospace sector. We have worked with their niche businesses in North America and the UK to hone their strategic offerings and value propositions, and to express these as brief balanced scorecards. We helped to involve their own reports in critiquing and extending the scorecards, which were then finalised by the Board. The scorecards have been used to communicate and manage strategy, to give focus to business units and provide the basis for objective setting and performance management throughout the businesses.