Balanced Scorecards and Learning

To understand how learning fits in the balanced scorecard you have to have some history. Back when Norton formed Renaissance Worldwide with Kaplan as non-exec he had two other key directors (1994 I think). Harry Lasker and Dave Lubin. The motto was implementing strategy, rapidly, knowledgeably, quickly (as will become apparent).

Lubin provided the internet technology piece (and is not so relevant to this story). Harry Lasker came from Seseme street originally (so the story goes) and was into cognitive learning and latterly organisational learning. You can read more about him in this excellent interview Learning organisations & balanced scorecard: Harry Lasker
http://www.leadcoach.com/archives/e-journal/2006/2006_08_lasker.html

Renaissance was very strong on the management of knowledge as an enabler of performance. That is why we insisted on calling the lower perspective learning and growth rather than people. People is static. It does not imply knowledge and cultural change as strongly as “learning and growth” suggests improvement. Extremely important.

There was little about this in the first book. However in the “Strategy focused organisation” (book 2) where the real scorecard stuff got discussed, there is a chapter that introduced strategy as a continual process (pg 274) and includes a really important strategic learning diagram based on the work of Chris Argyris. You can find if expanded in a later form on my website http://www.beyondplanning.co.uk/ . Some other articles in my blog also cover aspects of this.

When I start the balanced scorecard story I start here, because it is about strategy in the context of learning and recognising that operational performance is primarily single loop learning whilst challenging the strategy is the second order loop. (Challenging the assumptions about operational performance are also second order).

So you have to understand
a) Double loop learning
b) Learning and growth as a driver of performance
c) Cause and effect between the perspectives (and learning about how that is working)

I hope this helps. You have struck a vein that is fundamental to how the strategy focused organisation works and strategy focused balanced scorecards. Take these pieces away and it becomes operational, measurement focused and deterministic (command and control ) rather than learning.

Phil Jones
Excitant Ltd
Strategic Performance Management
Doing Balanced Scorecards Properly