The Balanced Scorecard (BSC) is an integrated management system for linking company wide activities with strategy and stakeholder management. Given top management support, it is a powerful tool to manage strategic shifts, implement new business models or restructure operations, and can be very useful to help manage transitions towards services or other change programs.
Nevertheless, the BSC is no magic bullet or panacea and, as often, the key lies in execution and process. BSC initial implementation can be complex, heavily time and resource consuming and risky. Getting bogged down in endless initiatives without result is a key danger, as is the large time commitment required by key leaders. Some organizations complain about never ending meetings and an excessive inwards focus. BSC implementation can spawn project bureaucracies that stifle initiative and innovation and alienate middle management and employees -the very people that must be brought on board. Failure in defining right objectives and metrics, in understanding causal links to value drivers in the cascade or appreciating time lags until operational performance is translated into business and financial results is a further cause of frustration.
Our approach to BSC recognizes both its strengths and its practical shortcomings. We know that BSC, properly implemented, can provide a robust platform to improve the way a company is managed or transitioned to a new strategic direction; But that the way it is developed and deployed determine its staying power and ultimate value.
We are well positioned to work with clients to drive successful and sustainable BSC processes to manage services transitions and operational improvement programs. We help
- explain to leaders how BSC changes the fundamentals of the management process, the benefits that can be gained, the obstacles that need to be overcome and the risks that are involved.
- make sure strategies are meaningful, actionable and adaptable through feedback and learning, to define strategic themes, design strategic maps and choose BSC frameworks that are consistent with a particular company’s conditions and environment.
- choose objectives, define metrics and to determine and validate causal links in the cascade -while ensuring that complexity is avoided and that selections of objectives are based on sound understanding of the processes that make them possible.
- implement systems to manage initiatives, projects and processes, making sure that the requirements of the BSC implementation process drives system choice and implementation and not the other way round.
- compare, evaluate and cull projects with limited or no contribution to strategic outcomes to reduce complexity and limit draining of resources and organizational capacity.
- ensure that employees and stakeholders make meaningful and significant contributions to outcomes through sound understanding of strategy and implementation process, their role and potential impact and, importantly, their feedback.
- design a permanent structure and process organizational setup to sustain continuous improvement of the BSC management system across the organization.