Principles of Effective balanced scorecards part 8

"Who cares? It better include the Chief Executive"

Now you can certainly do scorecard projects without the strategy: Without a strategic intent. What happens is that the "Do a scorecard" message comes down from the top, but there may be little guidance as to what is wanted. Involvement may be vocal rather than real. This is not an unusual pattern. In his excellent book, "The Rise and Fall of Strategic Planning", Henry Mintzberg describes how planning fails when it is delegated to planning departments. The same is true of performance management.

On the other hand when you can sit across the table from the Chief executive and ask, "What is the real problem here?". Then different things happen. In a recent engagement I was exploring how to design the strategy map with the Chief Executive. She was concerned that her team work closer together and think and act in a "joined up" manner. I offered her two choices.

• Silo based objectives. The objectives broadly corresponded with the existing organisational structure
• Objectives that they had to jointly own.
  

She said, "Well I suppose that we could start with the silo based ones and move to the joined up approach."

Now there is only one response at this point. It required looking her in the eyes and saying, "Well we both know that will never happen, will it?"

"You are right", she replied and from there we had backing from the top to change the thinking, practices and patterns of behaviour of that management team. The strategy was joined up services and the strategy map and performance management system reflected that.

So principle 11 of 10 (Yes I know, but we couldn't leave it out and you will remember it better for being 11. It worked for Spinal Tap so it works for me)

11 Get the Chief Executive on-board

You can do it without him or her, but it will be an operational scorecard.

So, look critically at your performance management project and your performance management reports. Ask yourself, and answer honestly:

• What does your Chief Executive really want? Are you solving a real problem for them?
  Are you making a difference to the strategy?
• Are you enabling it to happen or just measuring whether it does or doesn't?
• Will you make a difference to their performance and the way the team and organisation works?
• Or are you just measuring performance to see what is happening?

In contrast, I met someone recently who was in a performance manager's role. His responsibility was developing the measures and reporting pack.

However he was really frustrated. He knew that he wanted to make a big difference to the organisation: To drive into the information and provide stuff that would inform managers and help change and improve the organisation. Yet he was getting no support. Despite trying he was not getting managers' time and attention. He could look forward and think to himself, "This project will be a failure. At best it will be useful reporting. At worst it will create no change." He didn't want that on his CV.

He was stuck though. If he carried on with the level of support he was getting he would have a non-descript project on his CV. One where, despite his passion and effort, he wasn't going to get a result and be able to say, "I made a difference". If he left now, after 3-4 months of frustration, he would have a half finished project on his CV. He would have to explain why he left, and what he had not achieved.

I hope that is not you, is it?

If it is, then perhaps you are already thinking how external help would help you as well as the organisation. It's no coincidence that several of our Associates and many of the people in our network are clients and ex-clients. Moreover, they are people who we worked with as a part of the joint project team, developing their skills and getting them the exposure they sometimes lacked. Afterwards they were better positioned to work with their Directors and management team. Their credibility had been enhanced.

Why do we do that? Because it is a win/win. We get happier clients, you and your team develop and progress more, the work is more likely to persist and will make a lasting difference. That means happier clients all around and that means more referrals for us. Obvious really.

You know that you know how to do much of it. Sometimes it jus takes an external voice to get through the door.

In the meantime look critically at your own performance management approach, where it is used, how it is used and what it is used for. Is it giving them useful information? If you aren't getting the right sort of vibes, then you know what kind of experience you need to help you, don't you?

More soon

Phil Joneswww.excitant.co.uk

Principles of Effective Balanced Scorecard Part 7

"The ability to learn faster than your competitors may be the only sustainable competitive advantage." Arie de Geus

Whilst chatting with a manager of a largish organisation I suggested it was useful to think about organisations and how they learn, in the same way we think about people and how they learn. She said she would think about that and went off to her next meeting. Two weeks later we bumped into each other again and she said, "I thought about your idea. I came to the conclusion it was silly, as this organisation does not learn." So I asked, in that case if you met a person with such an inability to learn, how would you classify their learning disability? At that point she replied, "Oh err - highly autistic". The penny had dropped.

I use this analogy a lot, though most organisations would not have such a high degree of learning disability. Some organisations, plough on regardless of what the outside world is telling them. Some organisations do not listen to the inner voices of their people. Some appear to have split personalities depending upon which department or manager you are talking with. Some have invested so much time in their strategy that they believe it must be right.

Yet their strategy is "Just an hypothesis". It is not provable. It's an idea. It's a set of beliefs about what the environment is like, what the customers want, what the organisation is capable of delivering and how it can change. You can't guarantee it will work like a law of nature. It may be based upon research and experience, but its still a belief, and hopefully more than hope and magic.

So, like every hypothesis, making it happen is a test. A test of whether it really is true that implementing that system, changing that product, serving those customers, cutting those costs, will succeed.

So the quicker you get feedback on your hypothesis the better. This is because the sooner you get feedback, listen to it, evaluate it, make mode decisions, the sooner you will be able to refined, develop and update the strategy. You would not set sail across the Atlantic on the basis on the weather forecast at the time you left. You know the weather will change in that time and you may even come across a few storms. If you assume the wind is always in the same direction you are likely to end up way of course (if not sunk) by the end.

Likewise, strategy is a hypothesis. The sooner you test it and refine it the better.

You have probably already started to think about your strategy, scorecards, measures and targets. As you have realised they are just the same. They too start off with an initial design (and usually a lot of effort, energy and time goes into that stage). Yet with time those measures and targets, those strategy map objectives, will become wrong. Yet so many performance management systems start off with an initial scorecard and leave it in place. You find the same set of measures 1-2 years later. Ironically what often happens is that the use of the scorecard drops away as the managers realise it no longer serves their purpose. In reality the strategy has evolved and the scorecard has not evolved with it.

That is why it is really important to build into the management team meetings and performance management processes, the mechanisms to refine and update the strategy maps and scorecards as the strategy is executed. So out 10th principle is:

10 Strategy evolves, you learn from its execution: Management is about testing and learning from its execution. Performance management needs to reflect this.

But bear in mind who's job, who's responsibility it is to maintain this. It is not the role of planners and performance managers. It's the role of the management team. So the degree of ownership, understanding and usefulness they have is directly related to their ability to use it and maintain it. Which in turn is related to the life expectancy of the performance management approach.

You have probably realised that introducing performance management is a change management project. You have to be clear who needs to change, how that change is to be brought about and explicitly what you need to be doing to make that change happen. As you would expect, the skills of managing change have a massive effect.

In our next series of newsletters, we will explore how to make strategy happen, quicker. We'll also explore how the other practices, processes and systems in an organisation can undermine your performance management ambitions and what you can do about them.

In the meantime look critically at your own performance management approach, where it is used, how it is used and what it is used for. Ask around your management team to see if they believe in the strategy map and scorecard. Ask them are they using it, do they talk about it, do they expect their teams to use it and manage with it? Is it giving them useful information? If you aren't getting the right sort of vibes, then you know what kind of experience you need to help you, don't you?

More soon

Phil Joneshttp://www.excitant.co.uk/

Principles of Effective Balanced Scorecards Part 6

"Of course we have a scorecard. I designed it at home the other evening"

Very early on in my Balanced Scorecard career I heard a lovely story. Some of my colleagues had been to see a potential client about some scorecard work. It turned out he had one right there. He opened his draw and pulled a balanced scorecard out. Then he proudly announced, "I don't need any help. We have a Balanced Scorecard. I put this together one night after reading the book".

Now out of politeness my colleagues did not roll about on the floor laughing (or so they tell me). But the irony of the statement meant they could not resist asking the natural follow up question. Which was: "So, if you don't mind me asking, how many of your colleagues, fellow members of your management team, to whom this scorecard applies, were also involved in the choice and design of this scorecard".

I suspect you know the answer.

He certainly had a balanced scorecard: But no one else did. Now it might be that what he had produced was exactly what his colleagues would have produced. You know when that happens. When you bring a proposal to a meeting and everyone immediately says' "Yes, that is exactly what I was thinking. You are completely right; we need no discussion, debate or changes. It is perfect. Now lets go and implement it in our departments just as you proposed it."

Well maybe it happens often to you, but usually only if you are presenting a new idea to a room of people who do not care about it, as it will not affect them. Someone might even suggest that they are merely clones, dummies or puppies that like to have their tummies tickled. I couldn't say, but I don't see it happen very often in any management team I have dealt with or being on.
Things happen when people own the idea and feel they have either being at least a partial creator of the idea, involved or have tested it sufficiently that they think it is robust. Likewise, the Strategy map and Scorecard you produce needs to be owned by the rest of the management team who will use it. If they don't, then guess what, it won't get used.

The best of the Norton & Kaplan scorecard books is "The Strategy focused organisation". Whilst they are useful reference documents, you can read all of chapters and not find a section that describes how you get a management team to agree on the scorecard or strategy map (something we of course did with every engagement but never got written up in the case studies books). The trials and tribulations of getting them to agree which few objectives should be the ones to focus on. Chapter 3 is all about building strategy maps. It should be called "the technical design of strategy maps" for that is what it explains. Nowhere does it explain how you get those technical designs into people's heads so they want them, agree with them and believe in them.

The third book is similar. It contains four hundred pages of how to design a strategy map. Yet, no matter how hard you look there is almost nothing on how to get the management team walking out of a room all agreeing that the design of the strategy map is the one they all believe in. I'm sure somewhere I have seen the line, "Now get your management team to agree the startegy map" which sums up the approach in the books, but I can't lay my finger on it. This leads to principle number 9

9 It's a collective endeavour - its about collective understanding.

We all know stories of planning and strategy being delegated to a planner or strategist. We all know what the likely outcome is. Whereas when people do planning, the value lies in their understanding of the planning assumptions, drivers, background and reasons for the decisions. It is about people: Having a collective understanding, of what, of why, of how. People think in many different ways: So variety, diversity & versatility are needed to create understanding and collective ownership.

The act of discussing and designing and agreeing a strategy map and scorecard as a team has the effect of teasing out differences in understanding, assumptions and direction, creates consensus and means that the team all leave the room with the same story. You can do it as an individual. However all you have done is create another (individual) version of the story.

When clients are engaged in our strategic planning and strategy mapping workshops we are not only developing a view of the strategy with them but getting it into the collective heads of the management team. You'll recall our earlier principle, which was about being able to tell the strategy from the strategy map and scorecard. If you can't do this, there is something wrong. More importantly, if any member of the management team feels that it does not represent the strategy then you have either a division over the understanding of the strategy or a strategy map and scorecard that do not represent it. Either way you need some strong facilitation, change management and communication skills to help them bridge that gap.

Before the next newsletter, in which we will explore maintaining and evolving your strategy maps, be brave. Ask around your management team to see if they believe in the strategy map and scorecard. Ask them are they using it, do they talk about it, do they expect their teams to use it and manage with it? Is it giving them useful information? If you aren't getting the right sort of vibes, then you know who to talk to, don't you?

More soon

Phil Jones
http://www.excitant.co.uk/

Welcome to the Excitant Blog

Here I get to write about things to do with strategy , management, business models, performance, management thinking, strategy planning processes, strategic thinking and other stuff that comes to mind.

Phil