The journey of the Balanced Scorecard: from plan to implementation
The Balanced Scorecard provides any organization with a homogeneous view on the execution of strategy. It may take several months to several years for the Balanced Scorecard to reach its full implementation within the organization, but the end of the journey can be marked by impressive results.
The more familiar way to look upon the implementation of a Balanced Scorecard in our organization is by associating it with the way we act when we plan a vacation. During holidays, we usually like to travel, so that we can fully benefit of our free time.
In order to reach our destination, there are a few steps that have to be carefully planned in advance. These steps are very similar to the steps we take after having decided to implement the Balanced Scorecard within our organization.
A. Choose the destination: When planning a vacation trip, we first decide upon the place we want to reach. When implementing a Balanced Scorecard system in our organization, it is essential that we do the same.
The destination statement is the assertion of where an organization wants to get after having implemented its Balanced Scorecard approach.
B. Decide on the way to travel: After having decided on our destination, respective of our budget and preferences, we either choose to go by car, by train, by airplane, or even by cruise ship. Likewise, the Strategic Themes an organization agrees upon, help it define the means through which it has decided to achieve its ultimate goals.
It is recommended that the Balanced Scorecard centers itself on three or four main strategic themes. An organization may choose customer excellence, sustainability or outstanding operational quality as its strategic theme. However, choosing strategic themes that enable an organization achieve its vision is just as important as making sure that the means by which we choose to reach our destination are reliable.
C. Course consent: In the event that we are not traveling alone, we have to make sure that everyone has agreed upon the destination, the means by which to travel, and the route to take in order to reach the holiday’s destination.
Within an organization, this can be translated through alignment. Both managers, and employees have to agree upon the Balanced Scorecard design and implementation, as well as make sure that they have the same understanding of its fundamental components.
Furthermore, it is absolutely imperative that everyone in the organization is going in the same direction and the corporate scorecard is translated at departmental and individual levels as well.
D. Map the trip: When planning a vacation, we most certainly check the map out to track our course and possible stops along the route, such as places worth visiting. This makes a great association with the Strategy Map we configure in our organization to complement the Balanced Scorecard.
The Strategy Map aids an organization pinpoint the objectives by which desired strategic results are achieved. It is designed around the four perspectives of the Balanced Scorecard – financial, customer, internal processes, learning and growth – and it helps an organization make sure that it has mapped the way to achieving desired outcomes.
E. Establish travel agenda: After having decided on the destination, the way to travel, the route to take and mapped the trip, most of us like to plan the way we want to spend our vacation. When linking this to the Balanced Scorecard within an organization, it is rather obvious that we are referring to the BSC implementation plan. This entails the selection and validation of performance indicators, target setting, as well as determining the adequate initiatives for improvement.
F. Travel: After having established all the details of our vacation, there is nothing to do but travel. After having implemented the Balanced Scorecard, an organization has to act upon its execution.
G. Stick to the travel agenda: In order to make sure that we do not get lost, we have to remain faithful to our vacation travel agenda. Following the same example, an organization must regularly monitor its Balanced Scorecard in order to ensure that it is on the right track.
There are various ways to look upon the implementation of a Balanced Scorecard performance measurement system. By associating the BSC implementation with aspects more familiar to us, like, for example, traveling, we facilitate a better understanding of its demand. It is true. The Balanced Scorecard does not guarantee business success.
Sometimes, even vacations end up badly, irrespective of prior plans. But just like vacation planning helps us visualize our trip, the Balanced Scorecard helps us gain a better understanding of our goals, clarify objectives, devise a strategy to attain those objectives, implement an action plan, and monitor its execution.